Taxes Part 2
Posted by moonimus on Feb 7, 2008
I’ve nearly completed our taxes using Taxcut and we will receive a sizable refund from the IRS and NYS. Think low five digits. I didn’t realize the magnitude of having a baby and deducting a full year of interest would have on our taxes. I’m still waiting on a couple of 1099s which should have minimal effect. Every year, I want to file my returns as quickly as possible but it seems as if one lousy form takes forever to get to us.
I’ve also run into a glitch in the online Taxcut software. It will not deduct 529 contributions on our state return. This will definitely improve our NYS refund. When I asked the online technician how long this would take to resolve, I was told four business days! That’s way too long to get back to me about a problem with your software. I’m thinking about switching to TurboTax next year. Of course, I will try and leverage this inconvenience into some kind of compensation from Taxcut.
I’m trying to decide what to do with this unexpected windfall. Of course, I will pay off my personal debt and any credit card balances that are charging interest. I will earmark the 0% credit card balances and put that money into a savings account until the interest free period is over. After that, I should have more than half the refund left. My first instinct is to throw half of it into the Emergency Fund and the other half to be used for investment purposes. Or put it all into the Emergency Fund and save enough money until we can pay the Student Loan. But I’m still torn on this.
I read in a blog that I should probably just sit on the money for 6 months and then make a decision. That way, all the emotional rush from getting the money will have gone and I’ll be in a better mindset to make a rational decision. I’ll probably go this route but for sure, I’ll pay off my personal loans and high interest debts first.
Thanks for your comments about 529. I was just on hold for the chat waiting to ask them where in the software I could plug in the state contribution for 529. I cannot believe they missed something so obvious about taxes, but then there is a reason I had to go with turbotax online last year, too. It costs more, but it works. It’s been possible for a while to deduct 529 contributions for NY. How could Taxcut have missed this?
Matt - Customer service has told me that since the NYS tax form is so “complex,” sometimes things can miscode. This is a serious strike against them that’s for sure.
Yes, I actually did contact taxcut and spend half an hour online with their support. First person knew nothing of this. Second I finally convinced the lack of its functionality. He found it in the fat client (downloadable/CD version), but not in this. He wanted me to spend $20 more on the fat client version. I feel this is a major strike. 529 contributions are not some crazy corner of tax code, especially since turbo tax and taxact online work. Taxact, though it has a worse interface, came up with the same figures as taxcut PLUS my complete 529 deductions. I re-entered all data with taxact and efiled state & fed for $17 total, which is less than $45-70 for the competitors. Gl!