Being in a new town this year, we didn't know of anyone and went with what we thought would be a good option: Jackson Hewitt Tax.
Big Flipping Mistake.
While they have same-day processing and took about 30 minutes, it cost us $400 <wince>
I know, we were aghast too. That's a ridiculous amount when you can buy a tax program for 40 bux.
- RESEARCH! Do not just pick a place haphazardly. Look for reviews online or get recommendations from friends.
- Ask for prices before committing: Had we done this, we could have easily avoided this whole situation.
- Watch for upcharges: Part of the reason our bill was so expensive is they charge per form. We had 5 W-2s, which means they were around $90 a pop to file.
- Local accountants are less expensive than big boxes: When we've used local accountants, we've only paid between $100-200 for filing. They were really good about explaining items, asking follow-up questions, and ensuring we got the maximum return amount.
- Software is even cheaper: I've done the Turbo Tax thing before. It was fine. I guess I like knowing a real person has looked over my forms. That being said, it's not worth $400 to file your taxes. If you have basic forms and don't need to itemize, then do it online or with software.
If our bill wasn't steep enough, turns out we OWE the government $600. The craptasticness of 2010 is serving up a final punch in the gut. I have never had to pay for taxes, much less over $1,000 between processing and owing.
The fault, in part, lies with me. As an adjunct, my income was "chunked," so to speak. For the first half of the year, I pulled together income from two different colleges. Unfortunately, the pay was low enough that they didn't take out federal taxes. Apparently I don't understand the concept of allowances and didn't have enough selected. This also happened to a part-time job that Mike had.
Over $20,000 of our $44,780 didn't have federal taxes taken out, hence the need to pony up to Uncle Sam.
So while unintentional, I learned I'd much rather have the maximum amount taken out of my paycheck than not enough. I will be reviewing my Stamats allowance shortly and will make sure when I'm teaching again that my income is taxed.
Should you need clarification on allowances, HR Block has a helpful overview (which is not an endorsement): http://www.hrblock.com/free-tax-tips-calculators/tax-planning/filling-out-w4.html
Overall, I'm super glad we waited until after we had Mike's GI Bill file. Otherwise, we literally could not have paid that processing fee and had to call up the IRS for a payment plan. Now with one check, we'll be square with Lady Liberty.
Hope you all pay way less than we did for your taxes!
Question of the Day: What tax advice do you have to share?