1. Tax Time Your computer can help Bob Miller Mar 13, 2008

2. 6 Ways to do Taxes L By Hand with Pencil & Paper L Online thru IRS Website l AARP Tax-Aide $ Tax Software on Home PC $ Used Car Dealer $ Paid Preparer

3. Hand Preparation how your computer can help l Use spreadsheet (Excel or MS Works) –Organize and subtotal items. –Do some of the calculations. l Get tax forms and instructions online l Also make payments of tax due or 2008 estimated taxes at these sites.

4. format of my 1989 tax spreadsheet

5. Hand Preparation how your computer can help l Use spreadsheet (Excel or MS Works) –Organize and subtotal items. –Do some of the calculations. l Get tax forms and instructions online at www.irs.gov www.tax.virginia.gov l Also make payments of tax due or 2008 estimated taxes at these sites.

6. Online Preparation l IRS Free File (thru www.irs.gov)www.irs.gov –Provides free online federal tax preparation and e-filing using an affiliated provider if you qualify. –State taxes probably included for a fee. –Qualification criteria depend on the provider. TurboTax: under $30K or EITC or military under $54K (VA state return $9.95) H&R Block: 50 or younger and between $5K and $54K (state return $29.95) l Virginia: VATAX (thru www.tax.virginia.gov)www.tax.virginia.gov –Provides free online VA tax filing to anyone who has previously filed VA income tax (1999 & after).

7. AARP Tax-Aide l Free Service of AARP Foundation –Aimed at Middle & Low Income Taxpayers –Three Locations in Charlottesville and One in Fluvanna (at the Library) –Can’t do Schedule C, E, F,… (C-EZ OK) l Possible Downside? – privacy –Counselor may be your neighbor. –Other taxpayers may be in the room. l Call 589-2691 (Eleanor Miller) for more info or to schedule an appointment.

8. Tax Software for PC l Turbo-Tax, Tax Cut, … l Interview-based l Include lots of help, advice, videos, … TurboTax Example

9. Paid Preparer l Usually Expensive –Most appropriate for complicated tax situations: many stock trades own second home or rental property self-employed with more than $5,000 in expenses –Often has advantage of continuing support in case of audit. l Beware Refund Anticipation Loans (RALs) –You pay through the nose to get your refund a couple weeks early. –Typical equivalent annual interest rate of 180%

10. Organize First l Income –wages, interest, dividends, capital gain, business, pension, IRAs, social security, alimony l Adjustments –IRA contributions, student loan interest, tuition & fees, alimony paid l Itemized Deductions –medical, taxes, mortgage interest, contributions l Credits –education, residential energy credits,…

11. Income l Capital Gain or Loss –1099-B shows only sale proceeds, not cost –most brokers provide profit/loss statement l Profit from Business –can be complicated employees, equipment, inventory, business use of home,… –can be easy supplies, mileage,…

12. Itemized Deductions l Medical –doctors, hospitals, health insurance, LT care insurance, prescriptions, eyeglasses, mileage,… l Charitable Contributions –cash, non-cash, mileage deduct “garage sale” value google “non-cash charitable contributions” l Taxes –state income tax or sales tax –real estate tax & car tax

13. VA Items l long term care insurance premiums l VA College Savings Plan contributions l military or national guard income l purchase of energy-efficient appliance l foster care l political contributions l VA lottery prizes l peanut settlement payments

14. “Stimulus” Returns l For those who would not otherwise file and: –are nobody else’s dependent –have $3,000 in Social Security + RR retirement + earned income + veteran’s disability l Easy – use form 1040-A l Call AARP Tax-Aide for an appointment time. l See www.irs.gov for a list of providers who will do it online free.www.irs.gov