Income Taxes

What you get back has nothing to do with deductions it has to do with how much you withhold. My ex used to get 15,000 back not because we had a great accountant. He got it back because he told his aunt (payroll) to over withhold.

Most deductions are obvious and if you miss a few were are talking maybe a couple hundred, not thousands.

if you are filing 1040 or 1040 ez - the big ones are

filing head of household
hope education credit if you paid college tutiton or books last year
earned income credit
Childcare tax credit
Child Tax credit

If someone is getting that much back, they are having too much taken out of their paychecks.

Are you deducting your real estate taxes if you own your home?

The general idea is that if you break even, you're doing it right.
Your friends are just using the government as a savings account.
It's always smarter to get and save that money every month yourself.

The amount of deductions you have and the amount you have withheld determine how much you get back.

The ideal situation is to get less than $100 back. That means you are paying what you owe throughout the year, but not any extra. When you have high dollar amount refunds, you are giving the government a free loan.

Take what you got back in 2010, divide it by 12 and have that much deducted from your paycheck every month and send it to the mutual fund of your choice. Then increase your deductions to cover that refund. When you have your 2011 taxes done change your deductions to reflect the new information.

Good luck to you and yours.

If you use an on-line service such as TurboTax, they will help you find deductions. I believe the program costs $85, tho and if your return is simple it may not cost much more than that to go thru H&R block or one of those offices. An in person person might be able to recognize deductions better than you and the on-line service. I think you can consult with a tax preparer and still fill out your own forms. That may cost less.

It really isn't helpful to compare your taxes with anyone else's because you don't know the details of their finances. Do they have the same income and the same number of children? Did they have the same percentage withheld as you do? Do they own property and you don't? Do they have a loss on investments? Do they qualify for earned income or child care credit? You might ask your friend what deductions they use and compare those with the possibility of your having missed them.

As others have said, you want to get more money in your pay check during the year and get a small refund.

Wow. I would LOVE to barely be getting a few thousand back!! We have already done our taxes, through tax software. It takes us through every deduction we can claim. Try something like Turbo Tax, or pay an actual person to do them. I would not expect thousands of dollars. I don't think that's very common.

No offense but your friends are idiots for not adjusting their withholdings so that they get money in their paycheck each week and instead of loaning it to the IRS interest free all. If you are getting huge amounts back, you're having too much taken out of your paycheck. Fix your witholdings to get that money every pay day and either pay more bills or invest it. Don't worry about their refunds.

People put different numbers on their W-1 identifying deductions, which means some folks have more money withheld from their paychecks than others (i.e., they've paid more of their taxes upfront). These folks are likely to get bigger tax refunds.

You don't have the relevant information to know if you should be getting more back "because they do". You said their financial and marital status are similar to yours, but ARE they? How do you know? Do you know what they claim on their W-2? Just because you have 1 kid, doesn't mean that you are claiming 1 kid on your W-2 form...(for example). We claim more than we have on ours, because if we don't, they withhold WAY too much... and we end up with a ridiculous refund every year. I'd rather have my money now, thanks, not next year sometime. Do you know how much they give to charity? REALLY? DO you KNOW? Do you know if they investment losses they are claiming? Do you know if they are cheating on their taxes?
If you have a complicated return, by all means, go find someone to give it a once over for you. It doesn't cost that much. But don't be surprised if you aren't as far off the mark as you think. There could be 500 reasons your friends get a bigger refund than you do, that doesn't have to do with paying someone to file for them.

No. There is no need to pay someone to do your taxes. Use Turbo Tax. It will walk you through everything. Step by step.

What do you have withheld from your paycheck? if you have a family of 4 and withhold at 5 - you will most likely get money back. If you own a home and have mortgage interest to write off - you might get more money back.

Each person is unique. Each situation is unique. If you and I both make $100K per year. I might get $10K back because of my mortgage interest, child care expenses, educational and job searching expenses.

Owning a home, interests, investments, retirement plans, student loan payments, number of independents, write-offs, how much taxes you are withholding on your paychecks and all of that can greatly influence your return amount, so it's not feasible to compare the return with your friends.

For many people, it can be easier and more cost effective to do it yourself, but the more complicated your situation, then a professional may be needed. I would say your friends getting so much back is not the norm. Many preparers like H&R block use formats similar to the diy ones like TaxAct or TurboTax.

This is an excellent article on when to do it yourself, and when to hire a pro:

http://money.msn.com/tax-preparation/should-you-do-your-o...

I recently found this website to help determine what your W-2 withholding should be:

http://www.irs.gov/individuals/page/0,,id=14806,00.html

The point, as everyone else is saying, is that you really don't want to get a big check back from the government.

I use Turbo Tax and I think it does a great job of stepping me through all of the posible deductions.

Good luck,
L.

S.:

It all depends upon how much you have in withholding.

You cannot compare yourself to others as they may own a home (and have mortgage interest to write off), have child support, alimony, educational or other write-offs and deductions than you do.

Use Turbo Tax - it's easy to do it. Our taxes were done and submitted already. I do NOT like waiting until April 15th to do them. In our almost 16 years of marriage - we have only had to pay taxes once.

did you check to see if you qualified for the EIC? That is usually the big difference in returns for people, whether they got the EIC and how much of it. We did not qualify this year and our return is thousands lower than it used to be.

I find this interesting. My husband hates getting a refund ;). We pay someone to do our taxes. But in our situation, we pay him to handle everything in the event we get audited - we have rental property and a business. It's not because we can't do it on our own. Turbo tax walks you through step by step. In fact the first few years my husband would double check our accountant using turbo tax and the first year, he caught a mistake. There could be several reasons your friend is getting so much back....they have too much withheld, they have a mistake, you don't know their entire situation, or they are simply lying to you or the government. So, unless you have a special situation or you are concerned about being audited or taxes simply make you nervous, I would not pay someone else to do your taxes.

I asked several of my friends/family/peers and was told to use an individual, they all stated that they got more money than using turbo tax per se. So I input all of our information in to turbo tax and then also decided to take it to a CPA since we had never done the CPA part before. WE are just simple tax people, no ride offs, just normal work w-2's, we own a home, we have child care that we input. But in the big scheme of things, our taxes are simple. Long story short, the CPA and Turbo Tax got us the exact same amount back. The only difference is that we paid the CPA $125, turbo tax would have significantly less...HTH
A.

Your friends are letting the government use their $9000 during the year for nothing (no interest). It's not good they're getting so much back. That means they were paying too much in. Not good financial planning in my opinion. You're probably doing more things right than they are!

use turbo tax its really easy, we average about 1000$ from state and about 3-4g from Feds we do the basic deductions of goodwill and other charieties, dh work clothes/shoes, we rent so we also have rent deductions usually 3g is the cap on that. DH has his check set so we are getting more in it weekly as apose to a big lump at the end of the year. Why let the government have your money to hold on to? If there are 3 of you have 3 deductions or at least 2.

There are too many variables when it comes to taxes. I use TurboTax and have for year. It is easy and asks about every question imaginabl!

If you are not completely knowledgeable of the tax laws, you should pay the money to have a professional do your taxes. The last thing you want to do is have the IRS calling on you for mistakes that can be very costly.

We are very detailed numbers people. Hubby uses TurboTax AND our tax accountant who works with us for our business taxes also reviews it before we submit it just to ensure there are no issues.

When people are getting thousands of dollars back on a return, it is not because they are doing something special... it is because they are simply allowing the government to use their money for a year for free. I'd much prefer to save my money myself vs letting the government have it a year for free.

It is worth the extra couple hundred dollars to us to have the peace of mind knowing the taxes are correct.

There are so many things that go into account in the deduction process. This includes but is not limited to where you live, if you own, property taxes, school taxes, children, 401k, medical bills, what they caim on paycheck, if you have your own bussiness, etc. My advice is to go onto turbo tax and you can figure out what to get, and you don't have to pay for it unless you file with them. I do this to get a general idea, but I leave the rest up to my cpa and foot the bill for $200 and know I didnt do something wrong.

Also our income over doubled last year and that put us in a higher tax bracket where we are not eligible for certin things. We claim 0 so that we know we wont have to pay in and that's the most importaint things, and we usually get some type of return back

They probably are withholding more than you.

I use to take my taxes to H&R Block, Jackson Hewitt, and some of those names. A friend taught me a long time ago how I could find out how much I would get back, and I already knew before I went there. But I didn't know how to file electronically by myself, and at the time didn't have my own computer. Then I discovered Tubro Tax online, I used them for a few years, still got back the same ball park as what I figured, nothing really out of the ordinary from what I already figured. My sister and mother used TaxAct online, and was able to file for free, I was still paying $20 or $30 with Turbo Tax, which was cheaper than the $200-300 I used with the name brand tax services like H&R. I answered all the information in Turbo Tax, then went to TaxAct and did the same. They both said I was getting the exact same refund, but TaxAct was doing it for free. So for the past 4 years I've been using TaxAct, and the most I pay to file my taxes has been $7.95 because I've done the deluxe package...

Just like to tell everyone what I have found out...

One thing I have learned being in the mortgage industry, is never compare your financial situations to others unless you have all their financial history sitting in front of you.

Mortgage deductions can be a very large difference, just think about how much interest you pay on a rate of 4% and your friends have a mortgage interest rate of 8%. Then factor in how much of a mortgage you & your friends have, this could be a huge difference.

Then of course there is the difference of how many deductions you claim on your paycheck. So if you are a family of 4 but claim 8, then you are getting more $$ in each of your paycheck. Whereas your friend maybe a family of 4 and claim 4 means they have the government taking more money out of each of their paycheck which means a higher tax return.

Personally I say have an accountant do your taxes. Accountants are typically less money than a seasoned trained person at H&R Block that has absolutely no tax experience. My husband & I have a tab bit complicated tax return & my sis who does the 1040EZ form is being charged $50 more by H&R Block than we are by a tax professional with 30 years experience.

A lot of people file single no dependents all year so they can get back a large check. I think that is easier that keeping a savings account.

Go to someone like H&R Block! Seriously! My husband and I finally bit the bullet last year and went. They even refigured our taxes for the past 3 years and found LOTS that we could of been deducting. It was SO worth paying them (and I HATE to spend money) to do our taxes. Good luck! Hey, if they don't find you extra money, then at least you will know for next year :)

I went thru taxact.com. It is free if income meets the low standard. And if you are unsure of a question...there is usually a spot to click and it will define it. And it asks questions on all the spots on the tax form, does a check to see if all is good, allows you to go over spots a second time if it deems to ask a question...easy to use..

I have done both in the past. Turbo Tax and the other online services are JUST as good as H&R Block and the other "Big Name" tax companies. In fact, the year I went to H&R Block, I did my taxes myself on Turbo Tax. When I got to H&R, all the "tax professional" did was answer the questions on HIS computer screen, several of which he answered wrong or tried to skip because he didn't understand what they meant. I had to correct him several times, including entering my child's social security number wrong. It ended up costing almost $500 to file my taxes and the H&R Block (seasonal) rep had no idea what he was doing. They answer the same questions on their software as you do on Turbo Tax. Save your money and do it yourself! And, if you're still worried, then hire a PRIVATE accountant to help you. Definitely SKIP the H&R Blocks and other "tax" companies...

LOL, I've used Tax Cut by H & R Block since 1999, this year I am going to try Tax Cut, thanks ladies!!!
~A.