It doesn’t matter how much you’ve been following the Republican primary, it’s impossible for anyone to escape all the talk about tax rates. When Mitt Romney revealed that his effective tax rate was much lower than that of many Americans, it made some folks upset. Why was someone as wealthy as Romney paying so little, as a percentage of income, in taxes? It’s because of how our tax rates are structured. Being upset at Romney for his low tax rate is like being upset at Parker Brothers (or Charles Darrow) because the rents in Monopoly are too high. Romney didn’t cheat, he (and his financial advisers) looked at the rules and played within them.

That said, it can be a little confusing as to why Romney, and all his millions, are taxed at such a lower rate. It’s actually quite simple and I’ll explain how you might be able to achieve the same thing.

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It’s been a while since we’ve done a giveaway and the fine folks at Turbotax were kind enough to host a local event a few back in Washington D.C. They were showcasing Snaptax, they’re expanded mobile application that lets you take a photo of your W-2 and import it into TurboTax. I remember when they debuted the service a couple years ago, at the time only for California, and I was amazed at its accuracy (it’s just OCR’ing a relatively standard form but it’s still nifty, no one else is doing it!). They’ve expanded it so that you can now prepare your taxes, added a native iPad application (you aren’t looking at a web browser) that also let’s you prepare your taxes, and should your situation be more complicated, integrates with the online version. I think the crucial difference is that TurboTax has always been an online and software package first and so all of their advancements have been in that realm. Their competitors, those with software packages, almost see the package as an afterthought to their higher margin walk-in office services and so they’re always behind. (as an added bonus, all the public relations folks I’ve met and worked over the years have been awesome)

So, they gave me a few TurboTax gift cards to give away and they give you the ability to file one free federal and state preparation, with e-file, using TurboTax Premier Online (retail value is $74.95). The Premier version is one step up from Deluxe and it gives you the ability to handle investments and rental property. I believe it converts down (meaning you can use it for Deluxe). What you’ll get is just the code (and a photo of the back of the card, in case I mis-type it) and you can do with it what you will.

Here’s how you can win one of the three codes:

• You get one entry for sharing your favorite tax story in the comments below.
• You get one entry each for sharing it on various social media like recommending this post on Facebook and/or Tweeting it (include @bargainr please!). If you do this, please add the link to your comment below or email me so I can track it.
• You get one entry for liking us on Facebook – just say you did so in your comment and I’ll check for your name
• You get five entries if you link back to the contest from your blog. (again, add a link to the comment or email me)

Contest will end at noon on March 9th, 2012. Void where prohibited.

This contest has ended, congratulations to Andrea, Erin, and Justin for winning!

Good luck!

Thanks to the internet and the evolving technology that comes with it, we are living in a do it yourself world that becomes more self-service as times passes. There are a lot of tasks that are now automated that no longer require the use of a dedicated professional but can we do everything ourselves?

Just because it’s possible to forgo the fees that come with hiring a professional, are we actually saving money? Most people would argue that we still need human doctors although a wealth of medical information can be found online but since it’s tax season, how about tax professionals? Have software packages like TurboTax removed the need for CPAs and other tax professionals?

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Whenever tax season rolls around, I often see some of the same questions hit my inbox like what’s my tax bracket?, when are taxes tax due this year?, and others like it. It’s not surprising considering how complicated the tax code is (like the English language, exceptions are the rule) and one of the common questions I see is about deductions.

In general, a tax deduction is an amount you can deduct from your income to arrive at your adjusted gross income, which is used to calculate your tax liability. Anyone can claim the standard deduction, which is a flat amount based on your filing status, and that requires no support documentation. Alternatively, you can opt to itemize your deductions which means you forgo the flat standard deduction and instead will itemize, or list out, all your deductions (and along with it, supporting documentation).

Certain expenses are allowable if you itemize deductions, such as charitable contributions, but not if you claim the standard deduction. If you claim the standard deduction and make a donation to your favorite charity, you don’t get the tax deduction for that contribution. Most tax preparation software will help you calculate your deduction if you were to itemize, compare it with what you are eligible for as a standard deduction, and choose the best one for you.

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When you have money coming to you, it’s natural to want that money as fast as possible. Your tax refund represents money that the government owes to you, so it is perfectly normal to want that money quickly. Once you know that you have a tax refund coming to you, it’s possible to get your money in 10 days (or less) if you plan it right.

Your best bet is to combine e-file with direct deposit. That will provide you with the fastest possible tax refund.

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As you prepare to file your taxes, it’s important to make sure that you have all of the forms you need. Whether you prepare your own taxes, or take them to an accountant, there are a few must-haves when it comes to your tax documents.

Make sure that you are ready — well ahead of time — with the documents you need. You don’t want to be scrambling to put everything together at the last minute. You’ll feel a lot less stress if you are organized earlier. Here are some of the documents you need as you file your taxes:
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If you filed your taxes already (kudos to you!), you probably want to know where your refund from the IRS is. They’re quick to collect the money, but are they quick to pay out? It turns out they are, as long as you follow a few simple tips (which we put at the end).

While the IRS hasn’t entered the mainstream in many areas, being able to track your refund is one of the nice features of the IRS website. The service is called, expectedly, Where’s My Refund and it will tell you about your refund 72 hours after you file your return. You will need to know your social security number, filing status, and the amount of the refund on your return. They update the site every Wednesday, no use checking before then.

Another service they offer is an Android and iPhone app called IRS2Go. It’s basically the Where’s My Refund tool on a phone with a few other features, like tax season updates and the IRS twitter feed.

If you haven’t finish your taxes just yet, here are a few tips to speed up your refund:
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Remember Carmageddon? This was the closure of the 405 freeway in Los Angeles that was supposed to lead to unprecedented problems? How about snowmageddon? The epic size snowstorms that got their name in 2010 and led to a lot of snow but far less than the apocalyptic event that some believed would happen.

There’s a new “mageddon” making its way through Washington and this time, the fallout could be huge. It could stall the economic recovery and cost the country as much as $500 billion in lost economic activity in 2013 if the full effects come to pass. The mageddon is Taxmageddon and there’s no doubt that it’s something for Washington to worry about, especially in an election year.

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