Turbotax boasts a huge knowledge base and a large, active user community. There are a lot of things to know about taxes and Turbotax helps you do some of that.
Now, most people don’t do their taxes like they used to do before. Many who are very busy and cannot squeeze in enough time to do their taxes have to resort to some other means that can help.
If you are very busy, it can either be you doing your taxes or sleeping. This is not insinuating anything, it is making a case for the need for services like this.
There are pros and cons and that is why there is the need to understand how services like Turbotax work.
This article discusses Turbotax, Turbotax review and how Turbotax works.
There are a number of things that everyone needs to know about taxes. Chief of which is that penalties apply for failure to file a return and failure to pay your tax.
If you don’t file and pay by your due dates, you can get socked with penalties and interest, which can add up quickly. The need to pay and file tax keeps many people on their toes.
Investopedia, a website that discusses finance among other things has this to say about taxes in America “According to U.S. Internal Revenue Service data, over 14 million Americans owed over $131 billion in back taxes, penalties, and interest in 2018.1
Despite the threat of owing thousands of dollars to the U.S. government, millions of Americans continue to fall behind on their taxes.”
“One of the most common mistakes a taxpayer can make is failing to file a tax return.
But if you live and earn income in the United States above a minimum threshold amount during a particular year, you are required to pay taxes and report that income by filing a federal tax return.
What to know
To see if you have to file a return, the IRS uses three criteria: your age, your filing status and your income.
Generally, once you reach a certain income level, the law requires you to file. The amounts are adjusted annually for inflation.”
“Another common form of falling behind on taxes is linked to business owners and entrepreneurs.
People who are self-employed are responsible for paying their own taxes on a monthly or quarterly basis, depending on their income and estimated tax payments.
Since they are self-employed, they do not have an employer to withhold taxes from their paycheck—that’s usually an effective backstop for people who might otherwise forget to file their taxes.
But if you’re self-employed, and you fail to make your estimated tax payments throughout the year, you’ll likely incur a large tax liability at the end of the year.”
Triggers that make people need tax services
It’s not just self-employed Americans who are pressed for time—everyone is busy these days. Consequently, some other reasons people may owe the IRS are directly linked to what’s going on in their personal lives.
For example, a taxpayer may have a family crisis or an emergency that occurs around tax season that prevents him or her from filing a tax return on time or from paying his or her tax bill in full.
In that situation, the IRS will issue the taxpayer a bill for the amount still owed. Other taxpayers may simply misunderstand the tax laws and take exemptions, deductions and credits that they are not qualified to claim.
In this situation, the IRS will usually contact the taxpayer and inform him or her of the reporting error. The taxpayer is then required to validate the exemption, deduction, or credit taken.
Without proof, the IRS will correct the taxpayer’s tax return and the taxpayer may incur a hefty tax liability, penalty, and/or interest.”
Most people who do not need all the stress just go for services that offer them the best return for their money.
What does Turbotax do?
Turbotax makes it easy for you to prepare your taxes as you have the software ask all questions for deductions.
The software takes you through the entire return and helps you get through to the correct figures.
How Turbotax works
A look through the Turbotax website tells customers to “You answer simple questions. We do all the math.
Simply tell us about your year, including what you do for income, if you have kids, if you own or rent, and if you made any charitable donations. We’ll guide you through every step.”
“Capture your W-2 in a snap – Get a jumpstart on your taxes by snapping a photo of your W-2 with your phone or tablet, verify your data, and watch as your information is securely put into all the right forms for you.”
“File with confidence. We guarantee our calculations are 100% accurate. We run thousands of error checks as you go and double-check your tax return before you file.”
A user named George has this to say about Turbotax “I’ve seen enough people come in that had previously done their return in Turbo Tax (and other online tax products) where the software had calculated the tax/refund incorrectly.
Some of it was due to the client not knowing the correct tax law, but most were the software just plain entering random information that the person hadn’t put in.
This has resulted in letters from the IRS about the incorrect information and demanding additional taxes, penalties and interest owed.”
Another user says “in my experience I prefer to prepare my own taxes and Turbo Tax makes it easy as you can have the software ask all questions for deductions or you can enter your own deductions.
It takes you through the entire return and it’s very easy. Just ensure you purchase the correct edition, such as if you are in a self-employed business, purchase the home and business.
If you’re a wage earner (work for a company) then the individual is fine.
Is Turbotax legit or a scam?
Turbotax is a legitimate company with a legitimate software that does real tax work for its subscribers.
The software may have issues with calculations and its total outcome, but it does help many people prepare and file their taxes.
Turbotax helps with many things. From tax deductions to investments to rental property taxes etc. The goal is to know what works for you and keep things classy.
This turbotax review presents the reality of Turbotax situations to you and how customers feel about the product.
In the words of Stephen Richards “you are essentially who you create yourself to be and all that occurs in your life is the result of your own making.” Your taxes are what you make them out to be.