Crunching Time for Tax

I believe the dealine is April 17 in the US. If you have not done so, this is a good time to do so. I found the Turbo Tax Online discount link still works (15% off).

On a separate note, more than 1.6 million people in China filed personal income tax for last year. Only individual has annual income over 120,000 Yuan need to report. The average income of that group was 320,000 Yuan (80% are workers, “Da Gong Zhu” in Chinese), and the average tax is about 50,000 Yuan. Wang Jianshuo has a good formula to calculate tax in his blog.

Turbo Tax Online E-filing

I have used Turbo Tax  online version for years and here are some of the tips.

1) Started early. It’s obvious if you are expecting refund. The eariler you file, the earlier you will get the refund. But even if you are expecting paying more, you can start early and mail the check on April 15 (or whatever the deadline is). Starting earlier means fewer surprises; and it allows rooms for adjustment (such as additional contribution to 401K, IRA to avoid the higher tax bracket).

2) Use the Federal version if you are thrifty. I did use the State filing service couple times. But at one time I was screwed by a mistake and a year later, the state sent a letter saying I need to pay more. This is a mistake I could avoid if I file by paper. In my case the State tax form is fairly straightward. One reason we want to use the Turbo Tax Federal is to let the computer do the add/subtraction, analyze the potential deduction and help planning the future. All these are not as important for the State tax because the tax rate is lower, the tax code is simpler, etc. 

3) Use the E-filing. After filling the forms in the computer, you will have the options to file by mail or by E-filing. E-filing is better because it saves work for us and the goverment, saves the tree, saves the time to get refund…

Last but not least, here is a discount I found for Turbo Tax Online.   

 

(Update 06Feb07) Here is an interesting article about “whether do tax by yourself or hire an accountant” (from My Money Blog).