With so many different versions of tax software pitched at us, do you wonder if you are getting the right tax preparation software to best fit your needs? Will you miss out on some important tax deductions? Will you miss out on some of tax refund that you would have received? Here is to simplifying the mystery to lay it out clearly.
In this first of the 2 part series, I will cover the type of tax software to get. In the second part, I will cover how to make a decision on whether to do your taxes online or download the tax software and do it on your computer.
Personal tax software: You need this category if you do not own a business.
- TurboTax Basic I recommend this product if:
- You have taxable income in 2012, such as W-2, 1099, social security, or alimony.
- You don’t pay state taxes.
- You rent your home or apartment (don’t own a home).
- You have education expenses.
- You don’t make many charitable contributions or have many deductions to claim (if any).
- You didn’t sell investments, such as stocks, bonds, or mutual funds.
- TurboTax Deluxe Deduction Maximizer I recommend this product if:
- You file one or more state returns
- You own a home or sold your home in 2012
- You made charitable donations in 2012
- You had a lot of medical expenses in 2012
- You didn’t sell investments, such as stocks, bonds, or mutual funds
- You don’t own rental property
- You don’t have your own business (or file a Schedule C).
- TurboTax Premier Investments I recommend this product if:
- You need to file one or more state tax returns
- You owned rental property in 2012
- You sold investments, such as stocks, bonds, or mutual funds
- You sold options from an employee stock plan, such as Non-qualified Stock Options (NQSOs), Incentive Stock Options (ISOs), or Employee Stock Purchase Plans (ESPPs)
- You’re a partner in a partnership business where you received a Schedule K-1
- You’re the beneficiary of an estate or trust where you received a Schedule K-1
- You don’t have your own business. (or file a Schedule C)
- You don’t receive self-employment income from contract, consulting, or freelance work.
Business tax software: You need this category if you own a business.
- TurboTax Home & Business I recommend this product if:
- You receive income from a business you run from your home or from a separate office (that isn’t incorporated or an LLC)
- You receive income from a side job, such as home-party sales like Avon or your eBay business
- You receive self-employment income from contract work, freelancing, or consulting services
- You have multiple sole proprietor businesses
- You need to prepare W-2 or 1099-MISC forms for employees and contractors (not available in TurboTax Online)
- You don’t file separate returns for your business and personal income taxes
- Your business is not an S corporation (Form 1120S), a partnership or limited liability company (LLC) (Form 1065), a C corporation (Form 1120), or an estate or trust (Form 1041)
- TurboTax Business I recommend this product if:
- You are incorporated or a partnership/LLC, you’ll need to use TurboTax Business to do your business return
- When you use TurboTax Business, you must also file a personal tax return separately using one of the products from the personal list above.
Now in part 2 of this series, I will cover the questions you need to ask to find out whether you need to download turbotax or you should use turbotax online to do your taxes.