Just a quick note, as more people get confused on this than you think: You get the standard deduction OR your itemized deductions. You do not get to take the standard deduction AND itemize further deductions. You get your personal exemptions either way you choose.
There are certain expenses (alimony payments, for example) that can be deducted from your gross income to reach your adjusted gross income (AGI), and they aren't subject to reductions based on your level of income. From there you subtract either the standard deduction or your itemized deductions. Qualifying itemized deductions, stuff like medical expenses, certain taxes, and charitable contributions can be subtracted from AGI, but how much of the expense that you can deduct depends on your level of income. The standard deduction basically exists as an alternative to promote compliance, since record-keeping for itemized deductions can be a PITA. Personal and dependency exemptions (a set number, $3,900 per person in 2013) are also subtracted from AGI, and exist to provide taxpayers a minimum amount of tax exempt income to support themselves and their family.
The only client I've been involved with for a real income tax audit has considered giving up his citizenship over it. His situation is pretty serious. The IRS is generally forgiving if you made an innocent mistake, or the preparer is at fault, but you still owe the tax and interest, which can hurt a lot.
Interest? So they hold your money for the year, keeping all of the interest they make, and then turn around and charge you interest if you're late paying them? Ice cold.
Did TaxAct for a few years, then last year got a better return with TurboTax when I compared, so switched to them. Might try TaxSlayer this year.
I've literally used turbotax.com for a decade. I like that it remembers everything you put in the previous year. Makes it easier to remember which sections I need to fill out.
Anybody have any suggestions for good, affordable tax preparation? I don't make that much money but most of it is investment income and a couple of issues require reporting tiny amounts in other states besides Texas, so that my return ends up pretty complex and like 30 pages long. I think my current accountant is way too expensive.
Well, it was a happy and sad day for me yesterday: Good news: I am getting $6500 smackers back on my return Bad news: With my wife getting a great job, we will be in a higher tax bracket, so this is probably the last refund I will ever see
TaxACT for about 5 years. Also quite convenient that it remembers everything you entered last year, autofills relevant parts and compares your entries with what you put in last year to check against mistakes.
Hope it's OK for me to ask this here: Two adults (male, female) living with each other from June-Present as boyfriend/girlfriend. By the time they are supposed to file their taxes, they are engaged. Both have worked full-time jobs throughout. One earns significantly more than the other. Would the one who earns more be the Head of Household? Or would there be no Head of Household in this case?
