This year I decided to do my own tax filing and decided to use three filers to see which one was best. Overall, I'd say if used all three in tandem, you can actually learn a lot on how to self file in the future. I couldn't just use the simple free filers as I had a few forms that needs to be covered such as 1099-INT, 1099-Div, 1099-B, ESPP from work, HSA contributions, etc that were not part of the EZ File free form TurboTax offers.
Let's break them down.
TurboTax
This one is the simplest because TurboTax links to multiple brokerages and bank accounts to easily pull information over. TurboTax also assisted me in understanding how to calculate the adjusted basis cost for my ESPP so that I wouldn't get double taxed and understood how my HSA contributions was as my employer did not list my contributions in the W2 on Box 12.
What fell short was that it made it too easy and it could have lost a few hundred bucks. When it imported my Vanguard information over, it took the summary of my 1099-B and entered that as an overall gain. However that was not the case. Credit Karma did not allow a summary entry and wanted me to enter everything itemized or I would not have caught it. The problem with just utilizing the 'Summary 1099-B' that TurboTax offered was that it doesn't determine what was short term vs long term as you're going to have to blanket it as one or the other. So if you do use TurboTax, confirm your 1099-B and make sure it's not using the summarized information or it could cause problems. Once I itemized each individual sell instead of using the summarized information, it worked out.
By the end of it all, TurboTax matched federal with FreeTaxUSA and Credit Karma. However, for state taxes for CA, it only matched FreeTaxUSA.
FreeTaxUSA
Simple to use and very meticulous. Requires a little more knowledge of adjustments especially with ESPP, but it does give you the option. It goes through EVERYTHING you could possibly deduct or get credit for. Similar to TurboTax, it allowed me to enter a summarized 1099-B, but after the fiasco with TurboTax, I decided to break it down individually. Cost a bit for state filing but there's coupon codes and eBates refunds for it.
By the end, FreeTaxUSA matched federal with TurboTax and Credit Karma. However, for state taxes for CA, it only matched TurboTax
Credit Karma
Simple interface and allows both free Federal and State tax filing. However, this one requires a bit more knowledge and making sure the information is entered correctly. Unlike the other two, the 1099-B form does NOT offer summarized filing and is literally just a spreadsheet. For most, this isn't an issue as you would itemize everything instead of using the summarized information, but when it came for ESPP and trying to find the true adjusted cost basis, there was no assistance here whatsoever.
Here's where utilizing three filers came into play. While the federal refund matched the other two filers, the state refund was much higher; about 2x higher. Credit Karma does allow you to print the actual tax forms at the end of the process to double check everything, but the interface itself did not assist in figuring out what went wrong. From the website's interface standpoint, the state information I entered matched exactly as FreeTaxUSA and TurboTax, but the return was still about 300$ over what the other two calculated. It was not until I pulled up the printable tax form was where I realized it did the California HSA taxation all wrong. California does not allow the exclusion of HSA contributions from state income, the amount is added back to the federal income for purposes of the state and then applies the deduction. Credit Karma did not do that and there was no way for me to fix it.
So overall, I'd say for my case, FreeTaxUSA works best for me; and especially for those in states where HSA contributions are not exempt. However if they are then Credit Karma works just fine. I would say to just double check to be safe. But after all this experience... holy hell filing taxes is quite easy for very basic stuff like this. I thought having multiple investment accounts would make it complicated, but even this was easy.
Submitted February 17, 2019 at 07:36PM by xBladeDragonx http://bit.ly/2SMs66k
