In March 2003, my wife and I jointly filed our taxes with wages coming from W-2s, work as independent contractors, and two different states. It took me a month's worth of evenings to figure out and complete by hand the Form 1040, Schedule C, state forms, and other forms. Many line items on the Form 1040 reference other documents, forms, and worksheets so going line by line as non-tax professional was slow and stressful. We have been using TurboTax's online tax filing service since and have enjoyed its low-stress, easy-to-use wizard system.
Colorado Part Year Not Working
We spent half of 2009 in Colorado and half in Virginia. As of Saturday February 13th, the online service of TurboTax Home & Business was unable to correctly manage our Colorado Part Year Resident tax filing status. Instead, it treated us as a full year residents of Colorado and was including our Virginia wages in our Colorado taxable income. The solution to our problem was to download the PC/Mac edition of TurboTax Home & Business. A TurboTax customer service representative provided us with a free download after he spent two hours on the phone trying to figure out why the Colorado Part Year was not working online.
The good news was that the download edition worked but the bad news was that I had to reenter all of our information. Reentering our information was especially painful because state taxes is the last thing that gets entered so I had to reenter our personal profile, home business, personal W-2s, personal deductions, Virginia states taxes, and Colorado state taxes.
Choose Download over Online Service
I highly recommend the download edition of TurboTax over the online service for the following reasons:
- View forms - The download edition allows you to view the tax forms that ultimately get submitted so you can find out the deeper context of the questions TurboTax asks. In addition, it allows you to bypass the TurboTax questions and make changes directly on the forms.
- Increased speed - The download edition runs faster than the online service (depending on the speed of your Internet connection). Further, the download software does not log you out after 20 minutes of inactivity so you can take breaks without having to spend a couple of minutes signing in online.
- Includes all of the online features (expect requires payment at download) - The downloaded software asks questions, files taxes electronically, and pays taxes in the same way as the online service. The only difference is that you have to prepay for the PC/Mac download (or CD) whereas the online service is free until you file; which leads me to my next reason...
- Downloaded software cannot import online data - The downloaded software is more sophisticated than the online service but it does not allow you to import your online data and, thus, you want to start with the download software. For example, I spent a week using the online service only to find out that I needed to use the downloaded software; which resulted in me having to manually reenter all of our information.