How I saved on my 2010 Taxes

With today being T-day (otherwise known as "Tax-Day" or April 15th), I felt inspired to make my first post about taxes.

Without getting into too much detail about which deductions I took, or how I planned to end the year in 2009, when it comes to doing your taxes, most of the work is just filling out the information. There are only a handful of items which may affect your Adjusted Gross Income after you get your W-2 mailed in Feb. (One of which is contributing to your ROTH IRA account). Anyways, I decided to try to file by myself this year as opposed to getting an accountant to file. I figured I would save atleast a $100, and be a good learning experience as well.

I decided to try Turbotax via their website. As I began filling out my information through their GPS navigation tax system, I began to feel more comfortable with the information I needed. As I spent the next hour or so going through my return question by question, I finally finished, and was asked to review before I submit. As I go to submit, I see that my refund now will cost $74.95 because I used the 'Premier' version, even though I originally had selected the free choice. (Sneaky turbotax out to make a quick profit!)

I ended up writing down my tax liability (actually I got a tax refund, so I wrote down that amount) and quit my return. I then went to tax act online, and filed for free my federal taxes. While this took me about 2 hours (the interface was slightly less user friendly, and I had to manually enter my stock transacitons on my Schedule D), I ended up saving $74.95-All while coming up with the exact same result!

Now onto the savings:

Not Getting Accountant - +100
Not Using Turbo Tax - +75

Total Tax Savings - +175

For 3 total hours of my time, I saved $175 for an effective wage of almost $60/hr. While too late this year, I strongly consider more people to file their taxes themselves, since most people have simple returns anyways. This effective savings is one of the most profitable 3 hours many people can have.
If you are going to pay for tax assistance, I feel it should be used in tax planning, on what/how to reduce your liability in the first place. (I plan to follow this up with a helpful checklist come the end of the year to help plan for your 2011 taxes.)

Until next time.....Keep on saving.