Granted, I've been blessed with a simple 1040EZ situation: a single filer with no taxable investments other than a savings account, no mortgage or other real estate assets, and a single W-2 from my employer, Dow Jones & Co.
But this year my taxes are getting a major makeover. I bought an apartment in April, got married in May, and in August, my husband and I left our rental apartment in New Jersey for our new place in Manhattan. To boot, I brought in a little extra income from freelance reporting and my husband's job as a consultant means he either travels on business, or works from his home office.
Do I dare do our taxes now?
Honestly, I'd rather be getting a root canal. But it's not like I'm facing an exclusively complex situation. More than 2.2 million couples got married in 2005, according to the National Center for Health Statistics, the latest calendar year for which numbers are available. That same year, 7.4 million people moved to a different state. And last year, 7.5 million bought a home, according to the National Association of Realtors.
So my editors at SmartMoney.com and I decided this was the perfect time to test the two leading tax software programs — Intuit's TurboTax and H&R Block's TaxCut — back to back. With the competition getting fierce as more people than ever e-file, we wondered: Will one program be easier to use than another? Will I get the same tax bill or refund with both?
Using my real federal tax return — see the sidebar for details — I ran into some interesting discrepancies, especially when it comes to relatively new tax laws, such as the option to deduct state sales tax instead of state income tax.
And yes, I got different refunds. Here's the TaxCut-TurboTax face-off.
Tax Snapshot |
Filing Status: Married, filing jointly.
Dependents: None. Joint income: More than $100,000, which puts us at greater risk for an IRS audit. Retirement savings: My 401(k) and Roth IRA, my husband's traditional IRA (his employer doesn't offer a 401(k) plan, so he qualifies). Taxable investments: A high-yield savings account with roughly 10-months' worth of living expenses. 2006 events: Bought a home, moved to a different state, got married. Complicating circumstances: Because we bought new construction, we paid city and state tax on the purchase, which would normally be a seller's expense. Itemized deductions: Mortgage interest; charitable contributions; home office deductions. State returns: New Jersey, New York |