Just finished my taxes using taxcut. I am very pleased with it because it exceeded my expectations (It even imported my 2005 income tax return. ) The only thing it did not do for me is to get my 2005 CA refund into the place where you need to enter it.

One useful link if you are itemizing in California is to calculate the VLF fee (The portion of vehicle registration fee which you can deduction. Here is the link for calculating your VLF Fee on the official DMV site.

Time to do taxes for the new year.

I just looked at this 2006's tax products. Turbo tax premiere, which is what I should be needing considering I have some stock sales got more expensive. The total cost is not that bad but the trend is not good. So this year, I went ahead and purchased TaxCut. It cost me 56.95 for Federal, State and e-File version of the product. The same thing with Turbotax is showing anywhere from $74.95 (plus $15 for efile). It cant be all that bad considering how much turbotax evolved over the past 8 years I have been using. I used to think it can import my previous year's stuff very easily but it cant be all that bad to enter a few details.

I have done my US income taxes last week. Like before, I have used turbo tax for this year's preparation. This year I ended up paying IRS because I ended up getting some capital gains.

Couple of observations on turbo tax this year

1. It seems to be stripping functionality every year in order to get us pay more. For example, this year I could not download my w-2 and entry of capital gains is more painful. This software seems to have quality problems. It kept going back to income screen while I am entering individual transactions. It is also annoying when I am just trying to check whether the prices I have entered are valid asks for a number of things as if I am entering it.
   
2. My other complaint is they seem to have raised prices. For example, state taxes used to be something like $5.95 last year and this year it went upto $14.95. It seems ridiculously high for the software we already own and the return which can be printed and mailed for 2 bucks.
   
3. Turbo Tax could not even file my federal return electronically because one company I invested in sent a form 2439(This is supposed to be a document which has undistributed capital gains but deducted tax.). This is supposed to be IRS fault however. In stead of having people mail the 2439, they seem to have mandated the entire return to be sent in mail.
   

Though income tax preparation is straightforward, this year I wanted to organize a little better so that next year it would be simpler. Here is the stuff I have to scramble for this year:

1. Calculating capital gains (especially cost and gain for each of the stock market transactions I have completed.). I wish brokerages I have accounts have helped me better. ETRADE, at least seems to keep gain/loss for the stuff done with them. If you have transferred stock from somewhere else then you are out of luck.
2. Ameritrade, which is another brokerage I ended up having account is worse. I had to really dig my records to find the copy of original trade confirmation several years ago to calculate basis. ( I am thinking how hard can that be for a brokerage to keep the buying price of a stock which did not even split )
3. To find out if I am still eligible for Spousal IRA. This is really a good perk for IRA for married people with single income, which even lot of my friends seem to be unaware of. The only catch is your Adjusted Gross Income needs to be less than $160000. You could put as much as $4000 away in either regular or Roth IRA .
4. My VLF portion of the DMV fee. Even though it is small, I hate to lose this deduction. But I found out California DMV has this online calculator.
   
5. Keeping track of all donations and keeping the receipts for last year.
6. Making sure that all the banks and brokerages sent the various interest statements. I already made a list of all the accounts I might get interest from this year.
   

I also realized California offers free file for most residents. It appears I may not qualify for this because of capital gains. Hopefully that will change next year. I will be checking that out next year. Actually it makes sense for IRS and state tax boards to charge people who file with paper and subsidize electronic filers. ( Because it saves money for them to convert paper data into electronic data which they process )

Here is a list of federal free file information at IRS. ( though income limits are very low for eligibility)

I wish there is a year round tax monitoring program which will let you add all the stuff as you gather and then ready to print. I wonder why turbo-tax or any other software company cannot make it. ( I know quicken can help a little bit but that is a headache trying to use ).