Here’s how the giveaway works: just comment ON THIS POST by 5:00 p.m. Central Time on Friday, March 2 to enter. Make sure the entry includes an email address (required for comment form) so I can get in touch with you if needed. A winner will be chosen at random from the submissions and notified on Saturday, March 3.  I’ll also post the name of the winner in the comment thread here.

SPAM FILTER WARNING: This site uses a Word Press spam filter. If you do not see your comment listed, you can use the contact page (at the bottom of the blog) to find my e-mail address and let me know you’re caught in the filter. I WILL be checking the spam filter all week to make sure nobody is stuck there.

For those of you not familiar with TurboTax, why would you want to use it? What are the pros and cons? Here’s my review based on four continuous years of use.  

• It’s user-friendly. I tried to do my taxes with the paper forms once. It was totally intimidating, even for the simple “1040-A” form, and I ended up going to my aunt for my tax preparation and filing. TurboTax online is not anything like the paper forms. It asks you a series of questions in a easy to navigate way, like, “Have you moved this year?” and “Have you paid interest on your student loans this year?” You click buttons for yes or no, and based on your answer, TurboTax will tell you what forms you need and where to find the info on the forms. Easy-peasy.
• It’s relatively quick. Yes, there are a lot of screens to click through. And yes, the first time I used it there was a lot of information to enter. But when I used TurboTax the second year and for every year since, my data was stored in the system so I didn’t have to re-enter my address, employer ID number, etc. Additionally, my data from the previous year was instantly imported so I didn’t need to scout around to locate my past adjusted gross income, I just had to confirm that it was right.
• I can file at home, with support. This is a nice benefit for me because half-way into my taxes I usually realize I forgot a form somewhere. This year, for instance, I had to run out to my car in my pajamas to find my vehicle registration fee. And while working from home may seem like a negative because I don’t have a dedicated tax professional, the reality is my questions aren’t that complicated and the web site itself provides plenty of support via live chats and searchable chat forums and Q&As. I’ve never felt unsupported working on my taxes from home.
• Doing your own taxes gives you a good sense of where your money goes. I did not realize how much less my money market account was making in interest vs. a few years ago until comparing all my previous 1099-INT forms. I had noticed that the monthly interest payments were smaller, but until I compared all of my year-end statements I didn’t notice by how much (nearly half what I made in interest in 2008, when I had less saved). It’s a good reminder for me to shop around for a higher interest money market account. I’m not sure I would have caught that if someone else did my taxes.
• Even though it’s an online product, I trust the company. I have been to Intuit headquarters in California and met employees of the company. (My old firm used to do a lot of business with them; I never worked on an Intuit account.) The people I met were true professionals and the campus was awesome. Intuit isn’t some shadowy new company that just wants your data; they were founded in 1983 and have a long history of innovative and trustworthy products used by millions of American consumers. I have used TurboTax, Quicken, and Mint, and find their products to be useful and their customer service to be stellar.

Those are all pros; the only real con to TurboTax is the price, in my mind. The past two years, I’ve paid between $70 and $79 to file my state and local taxes with TurboTax. This year, without a free code, I would have paid $56 for the Deluxe edition (see disclosure statement below). That said, I did notice that this year — before I got the free blogger review code from the TurboTax team— when I logged in there was a pretty steep discount listed, down from $49.95 for the Deluxe edition to $29.95. That does not include the cost to file your state taxes (important!). Additionally, TurboTax does offer a free federal edition and a Basic edition for $19.99; both require a 1040EZ form.

In general, I would recommend TurboTax to anybody who is considering doing their own taxes (more of us probably should) and taking the standard deduction. It’s a tool that makes a daunting and difficult task surprisingly easy and kind of fun.

Per the above point about taking the standard deduction, I can’t speak to anybody doing an itemized return — I’ve never had cause to go beyond the standard deduction — but there are a lot of bloggers and professional writers reviewing the product who can offer additional perspective. I’ve listed a few here:

MoneyCrashers 2011 Turbo Tax Review

CoupleMoney Turbo Tax Review and Giveaway

Macworld: TurboTax Review

That concludes the review. My disclosure statement and further giveaway details follow.

REVIEW DISCLOSURE: I received a free copy of TurboTax 2011 to review the product for The Budgeting Babe readers. I was in no way required to post a favorable commentary. In past years I have paid full price for use of TurboTax. Given that I was already an enthusiastic TurboTax user, I was happy to review the product.

GIVEAWAY DETAILS: 

How to use code:

1) Prepare your tax return online at TurboTax.com using TurboTax Deluxe 2011 2) In the Print and File section, when you get to the screen that says “You’re Almost Ready to File” click on the link at the bottom of the page that says “Have a pre-paid code? Enter it here.” 3) Enter the Pre-Paid Code above.

Terms and Conditions:

This code is redeemable at TurboTax.com and good for one free federal + state preparation and e-file with TurboTax Deluxe Online 2011.  This code can only be redeemed once and is only valid through the 2011 tax season.  Codes may not be redeemed for cash and are not for resale.  Lost or stolen codes/cards will not be replaced.

The post TurboTax Giveaway! appeared first on The Budgeting Babe.

1. Importantly, I learned the definition of effective tax rate. Your effective tax rate is the average of all the percentages that your income is taxed.  My highest tax rate, which is called my marginal tax rate, is 28 percent. But, not all of my income gets taxed at that rate (phew!). Various levels of income are taxed at different rates, for instance, your first $17,000 may be taxed at 10%, then up to $69,000 may be taxed at 15%, and so on. (It varies based on whether you file jointly, single, etc.) The average of all your taxed rates is your effective tax rate. (I hope I got that right.)
2.  I pay a higher tax rate than some super rich people! My effective tax rate was 17.63 percent in my last filing. That’s higher than Mitt Romney, who makes about $20 million a year, and even higher than Warren Buffett – ok, only by about two tenths of a percentage point. But it’s lower than most of the other candidates – including Newt Gingrich and Barack Obama. (I’m not sure about Ron Paul or Rick Santorum. But The Atlantic has a handy chart with some other comparisons to past presidents and candidates.)
3. More than 80 percent of Americans pay less than a 15 percent effective tax rate. That was kind of surprising to me!  That means I pay in the 20th percentile of highest tax rates. Kind of a head scratcher. Too bad I’m not in the top 20 percent of earners.
4. Married people have different marginal tax rates than single people. I’m not married or engaged, so I never have looked into this. But it doesn’t seem right. Why should anybody be taxed differently from other people based on the status of their relationship? Especially when there are certain groups that aren’t allowed to marry?  I read there are actually disincentives to filing jointly, because the benefit really kicks in when one person earns a lot and the other earns a little, but that’s a pretty outdated rule because so many people have to have dual incomes these days. Sigh.
5. I’m OK with my tax rate. Here’s the thing about me. I have benefited from government programs throughout most of my life. My father is a retired police officer, which means the taxes I pay in Chicago go to support his pension and the salaries of our family friends, who are putting their lives on the line every day. His salary supported all my education, and my entire childhood. I went to college on government loans, which I’ve since paid off. I had academic scholarships too, and I worked throughout school, but there’s no way I could have gone without loans.  And I paid them off before my 10 year due date – yahoo!  In my professional career, I’ve worked in private industry – but I steered towards government clients like the US Army and the US Postal service because they were stable pieces of business. Now I work for a medical research university, which is supported by a LOT of federal research dollars. And I love my job — it’s interesting, challenging, and supports critical research that saves lives. Without federal funding at our university, who knows where I’d be working (or if I’d even have a job!).

I guess in retrospect, it’s not all bad that the media are focusing so heavily on Mitt’s tax returns. It provided me with a great opportunity today to learn something about myself and my money. Did you learn anything new about your taxes today? Are you ready to file your 2011 return?

The post Five Things I Learned About Taxes Today appeared first on The Budgeting Babe.

The good news is that I’m getting enough of a tax refund to pay for our plane tickets to attend a wedding in California in June. Napa and Carmel, here we come!

And, now that I know the tax refund will cover the plane ticket, I have FINALLY selected an itinerary for the trip and will be booking tonight. (I was also procrastinating that process in hopes prices would drop. They won’t.)

Finally, I imported a triathlon training plan into my workout calendar and committed to a date for my first Olympic Distance Triathlon. Something else I’ve been putting off. This is good as the discipline and sheer exhaustion of tri training usually helps keep my spending in check during the summer.

I’m not sure what the cause was for all the sudden motivation, but I’m glad to be done with all these decisions. I’m considering this weekend conquered.

The post Considering this weekend (and my taxes) conquered appeared first on The Budgeting Babe.

Flurb.

In fact, the only thing I do know about my taxes is that I’m using TurboTax again. At least everything I did last year is saved, and I don’t need to go digging around my closets trying to locate last year’s documentation.

Let’s just say I’m keeping it real, peeps. Getting back to my pre-organized financial roots feels oh so anxiety-ridden, and not at all comforting. I’m reminded why I started getting my financial house in order in the first place.

The post Tax Time! appeared first on The Budgeting Babe.