High Deductible Health Insurance Plans Not for Everyone

High deductible health insurance plans have lower premiums, much higher deductibles, and are often tied into a Health Savings Account where you can accumulate money pre-tax year after year; as long as you don’t spend it all on health care costs.

Of course if you have very high medical costs and/or don’t put much money into a Health Savings Account then a high deductible health plan may not work in your favor.  A recent letter from our doctor’s office is a good example of this, stating that 25% of their patients using high deductible health insurance plans can’t/don’t pay their medical bills.

Dear Patient:

Over the last five years, many of our patients have changed their health insurance coverage to a high deductible health plan.  It may be a Preferred Provider Organization or a Health Savings Account.  Many of these plans no longer have a copay with an office visit. They either have a co-insurance of 20% of the cost or 100% of the cost of the office visit goes to the deductible until it is met.

Twenty-five per cent of our patients who have these plans are not able to pay for their services after the insurance processes the claim.  Because of this, our medical group has changed the financial policy regarding the care of patients with high deductible health plans.

At the time of service, if you have a high deductible health plan, you will be asked to pre-authorize payment on a credit card for the services you receive that day.  It will be a one-time charge to your credit card for those services only.   After the claim is processed by the insurance company and you are notified of the amount of payment, you will be given ten days notice to make other arrangements to pay your balance.  If we do not hear from you after 10 days, we will charge your credit card for the service.  We will destroy credit card information after the payment transaction is complete.

High deductible insurance plans may sound good during Open Enrollment when you’re eyeing the reductions in monthly premiums compared to regular insurance plans but they can be rather unpleasant when you have a several thousand dollar medical bill you have to pay because you haven’t met your high deductible yet.

If you save hundreds a month on insurance premiums with a high deductible insurance plan but end up having to pay interest on hundreds or thousands of dollars of medical costs you charge on credit cards then this type of plan doesn’t really make sense for you.

We’ve never been on a high deductible health plan, partly because my new employer doesn’t offer one and also because our kids delivery & care costs over the last 4 years would have eaten through any savings in premiums we would have realized.  Because I’ve never used one I don’t know how much education is offered to people signing up for a high deductible health plan but I hope that people are being informed of and considering the potential financial liabilities that come along with the plan.

Written by Ben · Filed Under Health, Insurance >Comments (3) 

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New Roth IRA Rules

The Roth IRA was introduced as a retirement investment option back in 2007. The New Year, 2010, has brought changes to the Roth IRA rules that are making this retirement investment vehicle better for some investors than ever before. In order to fully understand how a Roth IRA can be more beneficial than a traditional IRA you first have to understand the logistics of each retirement account option.

Traditional IRAs

Traditional IRAs allow account holders to deposit up to $6,000 per year if you’re over 50 years old and up to $5,000 per year for those younger than 50. Whether or not the contributions you make to a traditional IRA are tax deductible depends on the amount of your income and if you have another retirement account such as a 401(k) through an employer.

If you withdraw money from a traditional IRA account before you turn 59½ you are typically charged a 10% early withdrawal fee. Otherwise, you can begin taking distributions from the account when you turn 70½ and pay income tax on the amount of the withdrawal at your current tax rate.

The good news for retirement account holders that are 70 or older is the federal government is offering a temporary reprieve. Minimum distributions from tax-deferred retirement accounts (IRAs, employer sponsored retirement plans, inherited IRAs and inherited Roth IRAs) are not required this year, which helps to offset some of the major losses these accounts saw because of the floundering economy.

Roth IRAs

A Roth IRA works a little differently than a traditional IRA. The first difference is that you pay income taxes at your current income tax rate when you make your contributions to the account. The other difference is that you are not taxed again when you make your withdrawals. You are also not required to start making your withdrawals at the age of 70½ as you are with a traditional IRA. If you make early withdrawals, as long as you are at least 59½, you do not pay a tax penalty for early withdrawals.

The downside of a Roth IRA was that if you have a 401(k) or IRA Rollover and your annual income exceeds $100,000 per year, then you are not eligible for a Roth IRA.

As of January 1st 2010 this changes. Households converting an existing traditional IRA to a Roth IRA account can do so because there is no longer an income restriction. The minor setback of the conversion is that you pay income taxes on the amount of money you convert at your current income tax rate.

Roth IRA conversions that take place in 2010 allows you to deduct half of the income when you file your 2011 tax returns and the other half of the income when you file your 2012 tax returns.


Questions to Answer to See if a Roth IRA is Right for You

• Will my tax rate change in the future? If you expect your tax rate to decrease then paying to convert to a Roth IRA may not make sense when you can pay less money on your income later in life. This is especially true as you near retirement and withdrawal age.

On the other hand, if you have significant assets, it may be worth paying for the conversion because financial experts predict tax rates will increase in the future.

• Do I have the money to pay for the tax conversion? If you do not have the cash to pay for the Roth conversion, then it doesn’t make sense to do so. If you have to use the money in your retirement account to pay for the conversion, you will be penalized the 10% early withdrawal fee and lose the tax-free growth status on the money in the account.

You can convert a portion of the money into a Roth IRA, which should be the portion you can afford to pay the taxes on, and convert the rest into a Roth IRA in the future when you can afford to pay the taxes on this amount.

According to the results of a recent survey conducted by USAA, only nine percent of those surveyed with household incomes of more than $100,000 and 27 percent of all those surveyed (who own an IRA) plan on turning their tax-deferred savings into tax-free retirement income. This means for the most part that the new Roth conversion rules may go to waste for investors that would benefit most.

Written by Kristie · Filed Under Investing, Retirement >Comments (4) 

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9 Mistakes People Make with their IRA

People make a lot of mistakes when it comes to IRA and 401(k)-related decisions. And I can’t blame them. The tax code is obscenely complex. That said, there’s no need for you to make these mistakes.

1. Converting to a Roth when it makes no sense Just because you can convert your traditional IRA to a Roth IRA doesn’t necessarily mean you should do it. Generally speaking, if you expect your tax bracket in retirement to be lower than your current tax bracket, converting isn’t a good idea.

2. Thinking tax rates won’t change between now and 2040 Of course, if you won’t be retiring any time in the next few decades, it’s nothing short of impossible to say what your retirement tax bracket will be. Tax brackets change as a function of both economic and political circumstances. Since we cannot easily predict what tax rates will look like 20 or 30 years in the future, it may be a good idea to tax diversify. That is, put some of your retirement savings in tax-free accounts (like a Roth IRA) and some in tax-deferred accounts (like a 401(k) or traditional IRA).

3. Not understanding how a Roth IRA works Sometimes, people neglect to make an IRA contribution because they don’t want to tie up the money until they’re 59½. What many investors don’t know is that contributions to a Roth IRA can be withdrawn at any time–free from tax and free from penalty. It’s only for distributions of earnings (and amounts converted from a tax-deferred account) that the various Roth IRA withdrawal rules have to be met.

4. Missing out on the Retirement Savings Contribution Credit It doesn’t get much press, but the Retirement Savings Contribution Credit can be a real boon for middle-class investors. In short, if your Adjusted Gross Income is below a certain level ($55,500 for married couples in 2009), you may qualify for a tax credit equal to a percentage of contributions you made to a retirement account. Tip: Investors who are just barely ineligible for the credit may be able to contribute to a traditional IRA, thereby reducing their income to the point where they’d qualify.

5. Funding your IRA just before the deadline every year You have until April 15, 2011 to make your 2010 IRA contribution. Of course, if you make your contribution as early as possible rather than as late as possible, you give your money more time to grow. Giving each of your contributions an extra 15.5 months of growth can make a startlingly large difference in your account balance when you finally retire.

6. Missing out on your catch-up contribution Once you reach age 50, you’re allowed to make an additional “catch-up contribution” to your IRA. It’s all too easy to forget about this for the first year or two that you’re eligible–especially if you make your IRA contributions via automatic monthly deposits.

7. Thinking you can’t contribute because only your spouse is employed Many one-income families think that they can only contribute to an IRA for the working spouse. That’s not true. In most cases, as long as one spouse is working and earns more than double the current IRA contribution limit, each spouse can contribute to an IRA. (Note: Reductions in contribution limits for high-income taxpayers still apply.)

8. Forgetting to take advantage of your self-employment income Between the popularity of blogging and other online businesses, it seems like everybody has a “side hustle” these days. What many people overlook is that their self-employment income qualifies them for additional types of retirement accounts. By opening a SEP IRA, SIMPLE IRA, or solo 401(k), you may be able to significantly increase the maximum amount you can contribute to retirement accounts this year.

9. Having your previous significant other listed as your IRA beneficiary No explanation needed–though you’d be surprised how often this happens.

What mistakes have you made (or avoided)? It’s always good to learn from mistakes. Especially when they’re somebody else’s. Have you made any IRA or 401(k) mistakes that you’d be kind enough to warn the rest of us about?

About the Author: Mike Piper is the author of Investing Made Simple. He also blogs at The Oblivious Investor.

Written by Ben · Filed Under Investing, Retirement >Comments (12) 

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The Cost of Sick Kids

Our family has spent most of the last two weeks with some form of head cold or stomach bug.  It all seems to start at daycare when our son gets sneezed on by another kid or our baby girl chews on a toy after a sick baby.

One of them brings home the germs and before you know it we have two sick kids.  We’ve been through winters with a sick kid before but in the past it was just our son.  Now that we have two kids, the sickness usually hits both of them.  This of course means the germs stick around our house even longer, making it more likely that my wife or I get sick as well.

The Costs of Sick Kids

Sick Day / Vacation Day

My wife doesn’t work every day of the week but it seems like every time our kids get sick its on some of the days that she works.  Of course this means that I usually have to use a sick day or vacation day so I can stay home since they can’t go to daycare with a cold, fever, or upset stomach.

What this means is that if you have or will be having little kids, you want to save up your vacation and sick days because it’s easy to burn through them during flu season.

Lost Daycare Money

Not every daycare works the same but many will charge you for a certain number of days a week even if your kid is sick some of those days and doesn’t come in.  I understand the reason our baby sitter does this, she depends on the income to pay her bills so she writes this rule into her contract to make sure she know how much money she’ll make each year. 

If you’re paid hourly, like my wife, when you stay home with sick kids you’re not only missing out on income but you’re also paying daycare costs that you’re not covering with earnings.  Typically the cost of daycare is offset by the money we earn at work

Doctors Bills

I’ve probably been in the doctors office with my kids more in the last year than I was the previous 20 years of my life.  Of course they weren’t sick all of those times but the bottom line is that little kids = many doctors visits.

Each time we go to the doctor there’s a co-pay and until we’ve met our deductible for each kid there’s also coinsurance to pay as well.

Medicine Costs

Our latest prescription from the doctor only cost around $10 for some amoxicillin for our son’s double ear infection but sometimes it can be much more expensive.  I don’t what the medicine is called but when my kids catch a certain kind of contagious eye infection the tiny little bottle of drops runs $50 a pop.

The doctors visits and medicine costs makes me glad we fund our flexible spending account so at least all the money we spend is pre-tax.

Sick Parents

As I mentioned above, it seems that if one kid gets sick then the other one will as well.  This means the germs are hanging out in your house even longer which makes it more likely that one or both of the parents will get sick as well.  Of course this means more sick days, more medicine, and maybe even more doctors visits.

So what can we do?  We did get flu shots for both kids. We try and keep their fingers out of their mouths and keep their hands washed when we’re around them. However, there’s not much we can do to prevent them catching something at daycare.  There’s no doubt about it, kids are expensive!  Maybe we can get the government to consider increasing the child tax credit

Written by Ben · Filed Under Personal Finance >Comments (5) 

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Mike Piper at ObliviousInvestor.com

Mike is a twenty-something guy who writes about investing over at Oblivious Investor.  Oblivious Investor is the term he uses to describe people who block out all the noise surrounding investing and focus on the things which are important. It’s Mike’s belief that most of what the media tells people about investing is irrelevant. I think he has some valid points, it’s easy to get caught up in the latest news and make emotional investing decisions rather than ones based on logic and fundamental analysis.

The thing I like about the Oblivious Investor site is that it’s like an all you can eat investing site.  Since the end of 2008 he’s focused pretty much solely on investing topics and offers regular analysis and perspective in areas such as 401ks, mutual funds, IRAs, index funds, and ETFs.  You can follow him on Twitter and subscribe to his site here for his investing updates.

About Mike Piper

Mike worked for a year as a financial advisor right out of college and now focuses on providing investing information through the Oblivious Investor. Mike has also published two books on investing, Investing Made Simple: Investing in Index Funds Explained in 100 Pages or Less and  Oblivious Investing: Building Wealth by Ignoring the Noise.

Some of Mike’s recent posts:

• Lending Club Risks and Costs
• How to Choose ETFs for Your Portfolio
• Investing in a Taxable Account

Other posts from around the personal finance web:

Credit Cards

• Credit Cards and the Minimum Payment Don’t Fall Into the Minimum Payment Trap @ Generation X Finance
• Claiming Extended Warranty with Your Credit Card @ Million Dollar Journey
• Credit card companies can profit from Haiti donations all they want @ Mighty Bargain Hunter
• How To Request A Credit Freeze From The Credit Reporting Agencies. @ My Two Dollars

Budgeting & Frugality

• Seven Things You Must Do to Prepare for An Emergency @ Lazy Man & Money
• Dangers of Frugality @ Suns Financial Diary
• Your Take: What Do You Look For in a Bank or Credit Union? @ Bargaineering
• Planning a (Debt-Free) Dream Vacation @ Get Rich Slowly
• Finding the Budget Busters from Last Year @ My Dollar Plan
• Five Steps to Freedom: How to Outsource Your Repetitive Tasks @ Erica Biz
• FDIC Coverage Limit Expiration Extended Through 2013 @ Good Financial Cents
• Pay off Student Loans, or Save for House? @ Budgets Are Sexy
• Effect of Paying Off Your Mortgage on Your FICO Credit Score @ Five Cent Nickel
• the two-income myth @ Brip Blap
• Hello More Income, Bye Bye Debt @ Frugal Dad
• Do You Make Kids Pay for Birthday Presents? @ Free Money Finance
• Avoid These Five Investment Mistakes @ Money Ning

Taxes

• In Detail: How to Claim the New Home Buyer Tax Credit on 2009 Tax Returns @ Consumerism Commentary
• TurboTax 2009 Discounts For Early Birds @ My Money Blog
• How to Organize Your Tax Documents @ Cash Money Life
• How to Avoid a Tax Audit @ Moolanomy

Insurance

• How To Buy A Life Insurance Policy For Low Cost @ The Digerati Life
• Trimming the Average Budget: Life Insurance @ The Simple Dollar

Reviews

• You Need A Budget – Success Story From NCN Reader James @ No Credit Needed
• YNAB 3 Personal Budget Planning Software Review @ Being Frugal

Written by Ben · Filed Under Personal Finance >Comments (1) 

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Free Turbo Tax Software!

Free TurboTax Premier Giveaway

Thanks to the team at Intuit, I’m giving away free access to TurboTax Premier to three of you!  Using TurboTax to file your income tax return has been the topic here for a few days so I figured it would make sense to give you a chance to try for some free tax software.

TurboTax Versions

As you may remember from my conversations with Bob about TurboTax vs manually filing a tax return, about 15% of people that use TurboTax use the Free 1040 EZ edition. If you qualify for free filing, you’re welcome to try and win the Premier edition but it’s definitely more than you need.  I also learned that around 60% of their customers use TurboTax Deluxe; which doesn’t have some of the investment and rental property features in TurboTax Premier.  Here are the differences between Deluxe and Premier as listed on the TurboTax website:

Investment Guidance

• Provides extra guidance for investments sales such as stocks, bonds, mutual funds, and employee stock options plans
• Finds deductions for your IRA contributions
• 401(k) Maximizer shows you how to increase your contributions without decreasing your take-home pay
• Cost Basis Lookup tracks and accurately calculates your purchase price for stock sales in three easy steps

Rental Property Deductions

• Finds over 20 deductions for landlords, from travel to advertising to repairs to insurance
• Shows which depreciation method will get you the biggest deduction
• Guides you through deducting points, appraisal fees, and recording costs to maximize refinancing deductions

Of course, if you only need the Deluxe version, the Premier edition will work for you so feel free to enter to win.

Win TurboTax Premier

So how can you get your hands on TurboTax Premier?  Well you don’t actually have to worry about messing around with the mail because the versions up for grabs can be accessed via TurboTax online.  The winners will receive a Turbo Tax coupon code that gives them one free federal, free state, and free e-file with the Premier edition.

How to Enter
Here are the rules. The contest is open to anyone in the United States, I will randomly select three winners on February 8th. In order to claim your prize I’ll need your email address so I can send you the coupon code . There are three ways to participate in the contest (listed below) and you can perform each action once. The first two below will earn you 1 entry and the 3rd will earn you 5 entries into the contest. Good luck!

1) Follow me on Twitter (Worth 1 entry)

Stay tuned to the latest tax posts from around the blogosphere.  Follow me here on Twitter and tweet the following:

Free Turbo Tax Premier, follow @moneysmart to win your copy http://bit.ly/77SL14 #moneysmart

2) Leave a Comment (Worth 1 entry)

List your biggest frustration about preparing your taxes in the comments below.

3) Get Free Money Tips (Worth 5 Entries)

Enter your information below to get personal finance tips delivered to you via email.

Name:
Email:

Written by Ben · Filed Under Taxes, TurboTax >Comments (32) 

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TurboTax Online Edition

Did you know TurboTax online editions offer the same functionality that the desktop versions of the tax software provide?  I wasn’t aware of this until my recent chat with Bob Meighan, chief customer advocate for Turbo Tax. 

Last time I covered our conversation on the benefits of tax preparation software, who TurboTax is for and who it isn’t, and when people file their taxes.  This final section looks at what Bob and I discussed regarding new developments in TurboTax this year and information about TurboTax online.

What’s new in TurboTax this year?

A major focus of the team at TurboTax is making the software and the process of preparing your taxes as easy as possible.  The easier the software is to use, the more likely you and I will be to go through all the steps and enter in all our information without error.

TurboTax made several additions this year to make it simpler to use. The first example Bob gave was adding progress icons throughout the program to let people know where they are in the process and help them navigate around.  They also added the ability to bookmark a certain question so that you can come back to it later.

One other thing TurboTax is doing this year is giving people the ability to buy US savings bonds with their refund.  Intuit doesn’t make any commissions on the savings bonds; it’s just an effort to help people save more money.  With an average refund of $2,750 last year some people could benefit from saving a portion of that refund.

How do updates work during tax season?

If you’re using a desktop based version of TurboTax and you do your taxes at the end of January, what happens when tax rules change before April 16^th?  As I mentioned in the first round of questions for Bob, the TurboTax team is constantly updating the software throughout tax season.

Every time you open up the desktop version TurboTax prompts you to check for updates.  In addition right before you file, the program checks for updates to make sure you have the most recent rules before printing out your return or e-filing.  Of course, if you use the online version you don’t have to worry about updating your desktop software.

How can you get a TurboTax online free trial?

When I was preparing for my Q&A with Bob I was looking over the TurboTax main page and noticed that each version of the software said that you could start your return for free and not pay until you were satisfied.

I asked Bob what this was all about and he explained that you can start filing your taxes online for free with any of the versions of TurboTax.   You can actually do your whole return for no charge without even creating an account.  You don’t have to pay until you go to e-file or print out your return; so if you don’t like the way your return came out you can decide not to use TurboTax without being out a single cent.

What’s different between TurboTax online and the desktop software?

The online desktop versions of TurboTax are pretty much the same; the one difference is that online version doesn’t allow you to view/edit the actual tax forms.  If you’ve never used TurboTax before, it basically does an “interview” where it asks you questions and then uses your answers to populate all the data on your tax forms.  In the desktop version you can open up the underlying tax forms, like your 1040, and edit them outside the interview process.

About 90% of people follow the interview format when using TurboTax.  The other 10% might not want to use the online versions because right now they don’t allow you to open and edit the underlying tax forms.

Bob explained that this is because the tax forms can be big files and customers with slow internet connection speeds wouldn’t have the best experience trying open these file.  He did think that as connections continue to get faster that they might add the underlying tax forms to the online edition in the future.

TurboTax Online Questions

Here are a few short answer questions I had for Bob about the online versions:

– If you’re in the middle of doing taxes and need a higher version, can you upgrade to the next one online?  Yes

– How many people use the online edition of TurboTax? Around 60% (About 12 million people)

– Can you upload your file from desktop version into the online version? Yes

– Can you download your file from the online version for local backup? Yes. Note that Intuit saves it as well.

– Can you print your return from the online edition for your own copy? Yes

– How many people that use TurboTax online will e-file? About 95%

I hope this interview with Bob gave you some insight into the world of tax preparation software and answered any questions you have about the TurboTax product.

Written by Ben · Filed Under Taxes >Comments (4) 

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TurboTax Software vs Manual Income Tax Returns

TurboTax vice president, Bob Meighan is back again today to talk about the benefits of tax preparation, who TurboTax is and isn’t for, and when people tend to do their income tax return.  In the first segment we covered Bob’s role as consumer advocate for TurboTax and what types of tax questions are troubling customers this year.  As I mentioned before, I’ll be paraphrasing Bob’s answers since we covered a lot and I couldn’t scribble it all down verbatim.

Is tax preparation software for everyone? My sister doesn’t have a complicated financial situation and does her taxes by hand. Is there any reason she should use software?

Bob’s initial response to my question was to share an IRS statistic; tax forms that are prepared with software and filed electronically are 20 times more accurate then manually prepared tax returns.

One benefit of using a program, whether it’s online tax software or desktop software, is that your information is saved from year to year.  Since you don’t have to manually enter your data it cuts down on the chances of errors, plus it saves time as well.

Of course one obvious downside to using tax prep software is that you have to pay for it. However Bob raised the point that people with a simple federal income tax scenario can actually complete and file their taxes for free online, with tools like the TurboTax Free Edition Online.

The last benefit he mentioned is for people who are getting a tax refund.  If you’re getting money back and you file electronically and use direct deposit you can get your refund within 10 days, compared to 4-6 weeks when manually filing.  I asked Bob if more people use direct deposit or opt for a paper check and he said that more customers go with direct deposit not only so they can get their money back faster, but also because it’s more convenient.

Do customers outgrow TurboTax?

Bob didn’t say that customers outgrow it but he did say that people with extremely complex financial situations who hire CPAs to prepare their taxes aren’t the people that Intuit aims to help with TurboTax.

He did say that they have customers who are currently paying someone to do their taxes who decide to try out TurboTax to see if it meets their federal income tax filing needs.  Some of these first time customers are currently using an accountant and others use services like H&R Block or Jackson Hewitt.

Often time they’ll take the completed TurboTax tax return to their accountant to double check and make sure nothing was overlooked. Then after that first year they remain customers and continue to use tax prep software in the future.

When do most people file their taxes?

Bob has seen some people file at the very beginning of January.  Typically these early birds are getting a refund and are anxious to get their hands on the money.

The first big wave of people filing their taxes is at the end of January and beginning of February when W-2’s arrive in the mailbox.  Then things slow down a little until the middle of April.  From April 13 – 15 everyone that’s been putting off their taxes realizes the deadline is near and rushes out to file their taxes.

For the last section of the Q&A series with Bob we’ll talk about what’s new in TurboTax and take a look at the TurboTax online edition.

Written by Ben · Filed Under Taxes >Comments (8) 

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TurboTax Software Inside Edition

TurboTax vice president, Bob Meighan, gave me a few minutes of his time recently to talk about the Turbo Tax product and what goes on behind the scenes to make the tax preparation software as smart as it is.

Bob’s the vice president of consumer advocacy for TurboTax and has worked at Intuit since 1991 so there have been many tax returns prepared and filed by the software during his long tenure there.

I’m afraid I chatted his ear off about the tax software so I’m not going to publish all the questions and answers at once. I’ll roll them out over a few days to keep the topics short and digestable.  My first set of questions for Bob had to do with his role in the product and how it impacts people that buy and use Turbo Tax.  I’ll be be paraphrasing his answers rather than quoting him verbatim since I was scribbling notes as he answered my questions and didn’t capture it word for word.

1) What does the Vice President for Consumer Advocacy do at TurboTax?

Bob’s major role is keeping in touch with what the customer needs and what questions they have about TurboTax.  He spends a lot of his time involved with customer service and handling any customer issues that come up.

Once Bob investigates customer questions or concerns he works with the TurboTax development team to pass along the details of the issue so it can be addressed.  As a result of this process Intuit is consistently updating the product throughout tax season based on tax laws and customer feedback.

Bob also helps handle media relations for TurboTax since he has such an extensive knowledge of the product and also has a background as a CPA.  It seems Bob is a good fit for this role, he knew the answer to every TurboTax question I asked him, right off the top of his head.

2) What tax questions are TurboTax users struggling with this year?

Bob gets a lot of feedback from the TurboTax Live Community, an online resource center where customers can ask questions, answer other’s questions, and offer product feedback.  He really thinks Live Community adds a lot to the value of the software since it lets him and his team capture customer questions and then track additional feedback and the resolution of the inquiries.

One of the most common questions that comes up every year has to do with the ability to claim someone as a dependent.  This year the New Homebuyer’s tax credit has been creating a lot of questions and confusion and to some extent the Energy tax credits as well.

Obviously, the benefit to end users is that once the development team updates Turbo Tax to address the questions from Live Community, the rest of the customer base benefits as well.  Users like you and I don’t have to understand all the intricacies of the tax credits, the software gathers the information it needs during the interview process and determines the tax credit eligibility for you.

3) Can customers interact with TurboTax using Twitter?

Although Bob just created a Twitter account at the end of last year Ashley Kirkendall and Chelsea Marti have been active on the site, representing TurboTax, for a while.

Bob’s seen Twitter be a good early indicator of problems and questions from customers.  It also gives people a chance to talk with someone if they feel like they want more personal attention with a question.

After talking with Bob I made a list of the various people from Intuit that work on the TurboTax product:

• Lucy Beard
• David Kanter
• Julie Miller
• Colleen Gatlin
• Christine Morrison
• Scott Gulbransen

For the next segment of the interview I’ll cover some more of the things we talked about, such as:

• Benefits of tax prep software over manually preparing your taxes
• People’s first experience using TurboTax
• How people like to get their tax refunds
• When other people get around to filing their taxes

Written by Ben · Filed Under Taxes >Comments (0) 

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Tax Return Deadlines

Tax return deadlines aren’t flexible so here’s a list of dates to keep in mind as you gather receipts and determine deductions for 2009 and 2010.

December 31, 2009

This is the deadline for making expenditures which can be deducted from your 2009 tax return, payments such as mortgage interest and charitable donations.

January 2010

Businesses are preparing tax documents to be sent to their employees. Banks, churches, and other organizations are also preparing tax-related documents to be mailed.

1/15/2010 - is the first day the Internal Revenue Service begins accepting tax returns that are filed electronically. This is also the deadline for fourth quarter estimated tax payments. If you pay your tax return in full by February 1, 2010 you can avoid this last payment without risk of penalty fees.

February 2010

2/01/2010 – Last day for 1098, 1099, and W-2 tax forms to be provided and mailed out. (Normally, 1/31 but this falls on a Sunday in 2010.)

2/16/2010 – Last day for filing W-4 forms for those who were exempt from income tax withholding in 2009, and wish to continue this exemption status. (Normally, 2/15 but this falls on President’s Day in 2010.)

March 2010

3/01/2010 – Last day for Fishermen and Farmers to file and pay in full their tax returns if they skipped paying their fourth quarter estimated tax payment, in order to avoid any late payment penalties.

3/16/2010:

– Corporations must file Forms 1120 or 1120-A for a 2009 calendar-year income tax return. If an extension is requested, the corporation will be required to make the fourth quarter estimated tax payment. Use a 7004 form to file for a six-month extension.

– S Corporations must file a Form 1120S for their 2009 calendar-year tax returns and make any due tax payments. A copy of Schedule K-1 or a substitute Schedule K-1 must be sent out to each shareholder. S Corporations must also use a Form 7004 to file for an extension, but must pay due taxes.

April 15^th 2010

– Tax returns are due to be filed and paid unless an extension has been applied for and granted.

– Use a Form 4868 to apply for a six-month extension, but be sure to pay any due taxes by April 15, 2010. The extension gives you until October 15th to file.

– This is the deadline to make contributions to IRA’s or Roth IRA’s for the 2009 tax year.

– The first-quarter estimated tax payment for the 2010 tax year are due.

– For most states, 2009 State Tax returns are due on April 15 also. If you’ve filed for a Federal extension, you may have automatically been granted a state extension but be sure to check on both the file due date and extensions.

– Household employers must file a Schedule H (1040) Form if they’ve paid $1,700 or more of wages in cash to household employees, along with their regular tax returns, reporting any employment taxes for 2009 as well.

June 15, 2010

Filing deadline – if you’re a U.S. citizen, a U.S. Military member, or a residential alien who is working or living outside the U.S. or Puerto Rico, then file Form 1040, also paying any due interest, penalties, and taxes. An extension until 10/15/10 can be filed.

Second-quarter estimated tax payment for 2010 are due; use Form 1040-ES.

September 15, 2010

Third-quarter estimated tax payment for 2010 are due.

October 15, 2010

If you filed for a six-month extension using a 4868 form, your 2009 tax returns are now due.

December 31, 2010

Keogh plan – Deadline to open a Keogh plan in order to deduct any plan contributions on your 2010 tax return.

If you happen to miss a payment deadline still go ahead and make your payment as soon as possible because interest can accrue on unpaid balances.  If you miss a tax deadline such as contributing to an IRA before April 15, there’s not much you can do.  The tax documents you recieve won’t reflect the late contribution until your 2010 taxes.  Hopefully this list of tax return deadlines will help you get all your tax matters complete on time! For a complete list of all tax deadlines your can visit the IRS website.

Written by Debbie · Filed Under Taxes >Comments (5) 

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