Gizmodo: Tax

Senate Passes Seven-Year Extension of Net Access Tax Ban

Matt Buchanan — Fri, 26 Oct 2007 11:40:01 EDT

Showing the House who's in the lower chamber of the bicameral setup, the Senate passed a seven-year extension on the net tax ban, three years longer than the four-year ban that passed the House. Better deal for us, right? Well, since they didn't match up exactly, they'll have to work together to hammer out the differences, hopefully before the current moratorium goes rotten on Nov. 1. Republicans continued to advocate for a permanent ban, but apparently Dems blocked a vote on it. Boooo taxes. [Yahoo!/Reuters]

House Judiciary Votes to Extend Ban on Net Access Tax by Four More Years

Matt Buchanan — Thu, 11 Oct 2007 19:20:37 EDT

The ban on taxing your intertube access is set to drop dead next month, but signs are looking decent it's taxation you won't have to worry about for at least another few years—the House Judiciary Committee voted 38 to zip passing an amendment to the Internet Tax Freedom Act that stretches the tax-freeness out another four years.

For once, lobbying groups and ISPs are on our side, actually arguing to make the ban permanent, though cities and states undoubtedly wouldn't mind the free drink of water a broadband tax dangles in front of them. The bill hits the House next term, probably (hopefully) before the current ban expires, though the Senate's taking its sweet time. [Ars]

Frankenfight: Best Tax Software

Mark Wilson — Wed, 07 Mar 2007 14:30:53 EST

It's that time of the year again. No, we're not referring to tax season—we actually mean it's that time when you've officially stopped feeling guilty for backing out on any and all New Year's resolutions. But it just so happens that this glorious tradition lines up with our tax season procrastination.

So for this week's Franken, we've laid off the cool gadgets and cock jokes, instead stacking up the three best tax prep programs (TurboTax, TaxCut and TaxACT) to duke it out for our eternal affection/one-time use. Hit the jump for our Frankenreview from experts at Tax Software Review, CNET and About, and then share your best tax tips in the comments. Because my CPA's name is Gizmodo.

Ease of Use
"TurboTax doesn't explain what "Distributions" means, or if your W-2 automatically deducts, say, your 401(k) contributions to keep that money safe from taxes. The video explains things better, but not well enough for novices. 1
One of the strengths of TaxCut is that you don't need to have accounting experience of any kind. Simply answer the questions the program asks you. If you are unsure of an answer you can check the extensive Help section for guidance. TaxCut automatically checks your return for common errors 2

I was very surprised by the amount of time it took me to prepare a tax return using TaxCut Premium. In just 30 minutes, I prepared a fairly complex tax return, from start to finish. 3
A unique feature TaxACT 2006 Ultimate Bundle offers is that you can choose between answering tax questions or directly entering data into the forms to complete your returns...The state program is even easier to use than the federal, all the federal information is automatically transferred, then simply answer a few questions and run the alerts and you are done. 2

Features
TurboTax Deluxe offers every feature we looked for and includes some excellent compatibility options...[it also] reconfigures and recalculates entries instantly comparing different tax scenarios to help you maximize your return and plan for next year. TurboTax can evaluate your 401K contributions and estimate how much you can contribute before it affects your take home pay and so on....within seconds, you can evaluate all of your tax choices. 2

TaxCut Premium offers a comprehensive feature set that includes tax advice and a high level of compatibility with other products... The service also has many features for future planning, including a Retirement Savings Enhancer and Tax Planning reports. 2

[but]...we wished TaxCut Premium had a tool similar to TurboTax's Basis Pro, which uses Gainskeeper's historical data of stock prices to help you determine the cost basis of a stock or mutual fund. 1

... A feature we found missing in TaxCut is year-to-year deduction comparisons. 2

TaxCut failed to catch two mistakes when I input my W-2 data (I transposed numbers on my wages, and put a wrong figure for Social Security taxes). This is a fairly common data entry mistake, and TaxCut really should have kept this useful software feature. 3

[With TaxACT] investors can import capital gains transactions from GainsKeeper© and it has a handy "Life Events" feature. This feature can determine the future tax impact of life events such as marriage, adding children to your family, income adjustments, divorce, and more...[it also] includes most of the commonly used IRS tax forms and they guarantee their calculations. If fact, they will pay your penalties and interest if the software makes a calculation error. 2

[But] TaxACT Deluxe does not have a 401(k) Maximizer, a great tax planning tool I found inside the TurboTax software. 2

Support
TurboTax customers get free technical support by telephone, chat, and e-mail, which is a great deal. Intuit promises wait times of 10 minutes or less for phone queries—a promise that rang true in our tests. Support hours are Monday through Sunday, 8 a.m. to 5 p.m. Pacific Time—and that's better than TaxCut, which gives its tech reps the weekend off. 1

For support, TaxAct offers a well-organized, searchable knowledge base on its Web site. Support is free via e-mail and at an Iowa telephone number, and TaxAct guarantees a response within 48 hours. During tax season, January 10 to April 15, support is available weekdays from 8 a.m. to 9 p.m., Saturdays...and Sundays. 1

In Summary
TaxACT is highly recommended for people with relatively straightforward tax returns to prepare.... [and its] appealing price and premium features makes the software a top choice for many. 3

While no tax software is perfect, TaxCut did a thorough job of guiding us through the filing process. And if your overall goal is to save money up front, TaxCut's lower cost makes it an attractive alternative to Intuit TurboTax. 1

TurboTax Deluxe is the ultimate tax preparation product. This is the easiest product to use with one-button upgrades and thorough explanations of tax law changes 2"

Prices
TurboTax Delux w/State
$55
TaxCut Premium w/State
$40
TaxAct w/State
$16

WINNER: In my non-CPA eyes, I would go with either expensive (Turbotax) to deal with a complicated tax return, or inexpensive (TaxACT) if I just needed a barebones filing. But TaxCut, while well-rated, seems to neither be as cheap as TaxAct or functional/accurate as Turbotax.

And don't forget...we need your deduction tips. Otherwise I may actually have to purchase one of these programs. – Mark Wilson

Great Tax Software Chart [Tax Software Reviews]

Gov't Offers Compensation for 108-Year-Old Phone Tax

Travis Hudson — Wed, 03 Jan 2007 11:46:39 EST

This is a reminder for you folks beginning work on those dreaded taxes. If you recall, nearly a year ago, I told you about the "federal excise tax." This was a tax that Teddy Roosevelt implemented on telephone usage that was still being assessed as of late. The initial purpose of the tax was to help fund the Spanish-American War (which has been over for a while, if I recall).

The government has stepped in and is going to offer a telephone tax refund to compensate for these 108 years of unnecessary taxation. Anyone who has paid taxes on a landline, wireless or VoIP phone service qualifies. The refund can be filed on the 2006 federal income tax return and will give up to $60 back. Up to $60 isn't much for 108 years of a 3-percent tax on every phone bill, but free money is free money. There are a lot of specifics about the refund, so hit up the FAQ below to get the whole scoop. Thanks, Dale Higgs – Travis Hudson

Image Via Consumerist
Telephone Tax Refund Q&A [IRS]

New Jersey Taxing Downloaded Music and Video

Jason Chen — Tue, 03 Oct 2006 17:10:00 EDT

Thanks to its $4.5 billion budget deficit, New Jersey's just instituted a 7% tax for online purchases and downloads of music and videos. For you, that means iTunes, Napster, and other stores are going to be a bit more expensive.

No idea how they're enforcing this, but maybe changing your State in your iTunes account can get around it? – Jason Chen

NJ to start charging iTunes tax this Sunday (October 1st) [Macenstein]

Cell Phone Tax to Fight the Spanish-American War

Travis Hudson — Tue, 17 Jan 2006 19:00:54 EST

In 1898, good ol' Teddy Roosevelt and the Rough Riders needed a little help in the Spanish American War. So they added a luxury tax on telephone usage. Over 100 years later this luxury tax is still being assessed on phone bills, including cellphone bills. The tax, a 3% "federal excise tax," has been helping us win the Spanish-American War ever since. But now many federal courts and cell phone companies are being unpatriotic and repelling this tax. Sorry, Teddy, your war effort will have to find funding somewhere else.

3 Percent Fee on Cell Phones Started 107 Years Ago [Via Textually]