Review: H&R Block's TaxCut

Today I finished my taxes, and I thought I would give a review of the software I used: H&R Block's TaxCut (for year 2007 of course) Premium Federal + State. I'm sure that it is available from a number of places, including the H&R TaxCut Website, but I bought it from Walmart for $34.96 +tax, which is cheaper than buying off the website. I did not buy the e-file option because I can mail it in for much cheaper, and don't feel like the additional support is likely to add a great deal of value for me. In comparison, TurboTax from Walmart was approximately $69 in order to have all the forms in the software that I would use.

I have used TaxCut for the past 3 years, and this year thought that the product was much improved. While I don't have the most complicated of taxes returns to complete, I did have interest income, capital gains and stock transactions to report. In addition, I had plenty of deductions to take as well as a Hope Credit. Previously I had to fill out the actual forms on a couple of items because the questions they asked didn't quite cover the situation - I remember specifically student payments being an issue, as well as my mortgage since it isn't through a banking institution. However, this year it was much easier to fill out all the information, and the process seemed to flow very nicely.

Installing the program was a little tricky, only because my computer acted up, and not because of the software itself. Once it was installed, it took me approximately 2 1/2 hrs to complete both my state and federal returns, check it over, and print it out. A nice feature that I didn't remember before was it reminded me deduct any payments for state taxes that were part of my 2006 taxes, but were payed in 2007. For me, I had underpaid on my state taxes, so the $308 check that I sent when I sent in my state return I could deduct. That translates into roughly $75 savings. This year I didn't use any of the tutorials, but previously I have found them to be adequately helpful or better.

Overall, TaxCut is easy to install and use and with the price is one of the best values for your money if you can't use a free online service such as TaxSlayer.

Recommendation: Highly Recommended

Fine Print: I am not in any way affiliated with H&R Block or TaxCut, nor am I in any way compensated for this review. Additionally, I am not a tax professional, so nothing in this review should be taken as tax advice. For your specific situation you should talk with a tax professional.

"It's the Most Wonderful Time of the Year!"

No, its not Christmas in June, but almost - yesterday I got my annual merit pay increase! Woohoo! Not that I didn't know it was coming - I have been looking forward to it for awhile, but didn't know how much it was going to be - I predicted a 3.25% and it came in just a tad higher at 3.52%. Not bad. All other parts of my compensation stayed the same.

Actually, this time of year makes it a great time to go through your W-4's and make sure you're having the right amount deducted. In fact, this is what I did last year (not only because of the pay raise, but also because of getting married) and I will do it again this year. This year I will have to increase the amount that is withheld from my paycheck. Since the first part of last year I was single, the amount that was withheld was quite a lot higher than it needed to be, so I changed the allowances in my W-4 so that I underpaid on the last half of the year. All told, by adjusting the withholding, I netted a measly $200 refund from the government (which made me ecstatic - no free loans to the government)! This year though, it meant that the first half of the year I have been slightly underpaying my predicted taxes - so that's where at least a portion of my raise is going to be siphoned off to.

Here's my process: First, I use MSN's tax estimator. This is pretty easy since I have quite predictable income and for the most part expenses. Then I take the difference between what I've already paid (should be on your pay stub) and what the estimator says I will owe, and divide that by the number of pay periods left in the year. This is what I fill out in the "Additional Withholding" when I submit my W-4. Just as a note, you are allowed to change the W-4 as often as you need to in order to have the right amount taken out of your paycheck. This system ensures that I don't pay Uncle Sam any more than I have to interest free.

Some people are so bold as to claim enough withholding allowances to not have to have income taxes witheld for 10 months out of the year, and then have the full amount withheld from the last two months. This would effectively allow them to bank the amount normally withheld for several months gaining interest. For example, if a person had an estimated tax bill of $4800, and instead of having $400 witheld from his paycheck every month, deposited it in an account bearing 5.00% APY for 10 months, and then had $2400 taken out of his paycheck the last two months, he would net about $103 from interest. This is an intruiging idea, but seems a little too close for comfort for just $100 or so (depending on your actual tax bill).