Taxes taxes taxes
February 10, 2012 10:47 AM Subscribe
How much does it cost to file state and federal taxes? (Plus one more bonus tax question.)
First year doing taxes here.
TurboTax and Taxact (and presumably other sites) will file your federal taxes for free, but they charge a fee for the state taxes (it seems to be about $40 and $20 respectively per state).
I'm going to have to do two separate state tax returns, because I was in two separate states, CA and MO. So I'd prefer to not have to pay $40 to a company to do taxes. It should be free to pay taxes if you do it yourself, right? So if I calculate everything online and then print out the tax forms, I then can mail it directly?
My questions:
1) Can I simply file the federal online for free, and then print out the state ones separately and mail them only for the cost of printing and postage?
2) If so, how do I find the addresses to mail the state returns? Is it to the IRS, or is to a separate department of revenue for each state?
3) I will be owing taxes to federal, to CA, and to MO. How do I pay them? I have a ebanking checking account with the money, but I don't actually have any checks. Is there any way to transfer the money online to the IRS?
Bonus) The reason why I owe taxes is because about half of the year's money came from work as an independent contractor in CA in which taxes were not withheld. (All the MO money had taxes withheld.) However, Taxact is telling me I'm paying a small amount to CA and about eight times that amount to MO, which seems weird. (Both of these amounts are relatively low -- I'll be paying about 3/4 times the MO amount to the federal.) I guess it seems that only federal taxes were withheld in MO, not state, so maybe that's the explanation, but it seems odd that I'll be paying significantly more to the state that did not withhold my taxes. Does this MO vs. CA situation seem to make sense?
First year doing taxes here.
TurboTax and Taxact (and presumably other sites) will file your federal taxes for free, but they charge a fee for the state taxes (it seems to be about $40 and $20 respectively per state).
I'm going to have to do two separate state tax returns, because I was in two separate states, CA and MO. So I'd prefer to not have to pay $40 to a company to do taxes. It should be free to pay taxes if you do it yourself, right? So if I calculate everything online and then print out the tax forms, I then can mail it directly?
My questions:
1) Can I simply file the federal online for free, and then print out the state ones separately and mail them only for the cost of printing and postage?
2) If so, how do I find the addresses to mail the state returns? Is it to the IRS, or is to a separate department of revenue for each state?
3) I will be owing taxes to federal, to CA, and to MO. How do I pay them? I have a ebanking checking account with the money, but I don't actually have any checks. Is there any way to transfer the money online to the IRS?
Bonus) The reason why I owe taxes is because about half of the year's money came from work as an independent contractor in CA in which taxes were not withheld. (All the MO money had taxes withheld.) However, Taxact is telling me I'm paying a small amount to CA and about eight times that amount to MO, which seems weird. (Both of these amounts are relatively low -- I'll be paying about 3/4 times the MO amount to the federal.) I guess it seems that only federal taxes were withheld in MO, not state, so maybe that's the explanation, but it seems odd that I'll be paying significantly more to the state that did not withhold my taxes. Does this MO vs. CA situation seem to make sense?
1) In theory, yes, if you have the forms filled out correctly, however you got them that way, you can just mail them in with your W2s and such.
2) You don't send them to the federal IRS, you send them to the state. This information should be easily findable online, it's probably even on the forms you will need to mail in -- they're not going to make it sneaky as to where to send the money.
3) You can transfer money online by... filing online, which is what you're trying to avoid. Otherwise you will need to write a check or get a money order or something like that.
posted by brainmouse at 10:51 AM on February 10, 2012
2) You don't send them to the federal IRS, you send them to the state. This information should be easily findable online, it's probably even on the forms you will need to mail in -- they're not going to make it sneaky as to where to send the money.
3) You can transfer money online by... filing online, which is what you're trying to avoid. Otherwise you will need to write a check or get a money order or something like that.
posted by brainmouse at 10:51 AM on February 10, 2012
Did you check and see if you can file the state taxes for free? In Louisiana I was able to file my state for free if I went directly through the states Department of Revenue site.
posted by govtdrone at 10:52 AM on February 10, 2012 [1 favorite]
posted by govtdrone at 10:52 AM on February 10, 2012 [1 favorite]
California has Calfile. It's free.
posted by notned at 10:56 AM on February 10, 2012 [1 favorite]
posted by notned at 10:56 AM on February 10, 2012 [1 favorite]
Not sure if this is what you mean, but if you use TaxAct and the like to calculate state, before you pay they put a huge watermark over all the completed forms they show you. You can always do your work on the state-provided PDFs of course.
posted by michaelh at 10:57 AM on February 10, 2012
posted by michaelh at 10:57 AM on February 10, 2012
So if I calculate everything online and then print out the tax forms, I then can mail it directly?
Well, yes, but the software will not allow you to print the forms without paying. What I have done in the past is just use the software to view the forms and hand copy the data into paper forms. My taxes are simple enough that this is a pretty trivial task, yours may be too complicated to make this scheme worth your while.
posted by Rock Steady at 11:00 AM on February 10, 2012
Well, yes, but the software will not allow you to print the forms without paying. What I have done in the past is just use the software to view the forms and hand copy the data into paper forms. My taxes are simple enough that this is a pretty trivial task, yours may be too complicated to make this scheme worth your while.
posted by Rock Steady at 11:00 AM on February 10, 2012
Electronic payment options for Federal taxes. tl;dr: you need to go through a third-party filer/processor, or use a check or money order. There are several options for processors; presumably some will have a smaller fee than others. OTOH postal money orders are easy to get (though they also require a fee of course).
posted by hattifattener at 11:05 AM on February 10, 2012
posted by hattifattener at 11:05 AM on February 10, 2012
1. Yes, I did exactly this a couple of years ago.
2. TurboTax actually told me what address to mail my state taxes to. It was right in the stuff that I printed off.
posted by royalsong at 11:27 AM on February 10, 2012
2. TurboTax actually told me what address to mail my state taxes to. It was right in the stuff that I printed off.
posted by royalsong at 11:27 AM on February 10, 2012
Others have addressed most of your questions, so I will just address the multi-state issue. The W-2 that you received from your employer in MO will indicate whether they withheld state taxes. There is a separate box for this on the W-2, box 17. If there isn't anything in box 17, they didn't take out state taxes, which may explain why you're seeing such different numbers for CA and MO in Taxact.
That said, the way that most online tax prep software calculates this stuff is usually less than ideal; you're better off going by the instructions on each state's department of revenue. Some states have a non-resident or part-year resident form that is different from the standard form - I know CA does this, but MO may have something similar. Most states have some sort of e-filing process you can do directly with them, and they all have publications you can download to address just this type of multi-state situation.
posted by bedhead at 11:28 AM on February 10, 2012
That said, the way that most online tax prep software calculates this stuff is usually less than ideal; you're better off going by the instructions on each state's department of revenue. Some states have a non-resident or part-year resident form that is different from the standard form - I know CA does this, but MO may have something similar. Most states have some sort of e-filing process you can do directly with them, and they all have publications you can download to address just this type of multi-state situation.
posted by bedhead at 11:28 AM on February 10, 2012
Just wanted to chime in a say that I always do my federal taxes through something like TurboTax, and I always fill out my state taxes manually and send them through snail mail. Filling out your federal tax return by hand can be confusing if your situation is anything other than dead-simple single W2 and no deductions, and I find the $30 I pay to be worth every penny. State tax returns, on the other hand, take about 5 minutes to do by hand. Why? Because every state return I've seen (4 states located across the country) asks you to just fill in numbers from your federal tax return--it will say something like, "Fill in box 1 with line 17 of your federal tax return." Your state return will probably be no longer than 2 pages. Even when you're a part-year resident, it's not hard. I think people only file state returns using software because it's there and they're tired and don't realize how easy it is to do yourself. In your specific situation--part-year resident with income that varies by when/where you were living--the software usually screws it up anyway.
What this looks like in very concrete terms:
1. Do federal taxes through TurboTax / TaxAct / TaxCut, file, and save the PDF version of my federal return. Print out first 2 pages of federal tax return after I've filed it.
2. Go online, find PDF forms for my state return, and print them out. (Make sure you're looking for the form from each state that specifies "Part Year Resident.")
3. Fill out state return by hand, which is very fast and usually involves filling in values from the first two pages of the federal tax return. When you're a part year resident, it will ask you to do a percentage of your income or only fill in the income you received while a resident--this will be very easy if you can attribute all income from one 1099 or W2 to California and from the other to Missouri.
4. Fill out check for amount of state taxes due, paper clip to my state return, and send the entire thing to the address I found online (state department of revenue in most states). If you don't have checks and don't want to bother asking ING or whoever else for one, then you can withdraw the correct amount of cash plus $3 or so, head to the post office, and pay cash to get money order that is basically a check for people who don't have checking accounts. Voila, all done!
posted by iminurmefi at 11:53 AM on February 10, 2012 [1 favorite]
What this looks like in very concrete terms:
1. Do federal taxes through TurboTax / TaxAct / TaxCut, file, and save the PDF version of my federal return. Print out first 2 pages of federal tax return after I've filed it.
2. Go online, find PDF forms for my state return, and print them out. (Make sure you're looking for the form from each state that specifies "Part Year Resident.")
3. Fill out state return by hand, which is very fast and usually involves filling in values from the first two pages of the federal tax return. When you're a part year resident, it will ask you to do a percentage of your income or only fill in the income you received while a resident--this will be very easy if you can attribute all income from one 1099 or W2 to California and from the other to Missouri.
4. Fill out check for amount of state taxes due, paper clip to my state return, and send the entire thing to the address I found online (state department of revenue in most states). If you don't have checks and don't want to bother asking ING or whoever else for one, then you can withdraw the correct amount of cash plus $3 or so, head to the post office, and pay cash to get money order that is basically a check for people who don't have checking accounts. Voila, all done!
posted by iminurmefi at 11:53 AM on February 10, 2012 [1 favorite]
Hello, fellow Missourian-Californian!
Missouri makes it pretty easy. They have a fillable calculating MO-1040 PDF. You can also pay online with a 60 cent fee (cheaper than a money order).
For California, CalFile is good, but you don't qualify to use it because you spent part of the year in the state. So you're probably left to the form 540A PDF, which is fillable but not calculating. For paying online, they have Web Pay which is free.
posted by zsazsa at 12:00 PM on February 10, 2012
Missouri makes it pretty easy. They have a fillable calculating MO-1040 PDF. You can also pay online with a 60 cent fee (cheaper than a money order).
For California, CalFile is good, but you don't qualify to use it because you spent part of the year in the state. So you're probably left to the form 540A PDF, which is fillable but not calculating. For paying online, they have Web Pay which is free.
posted by zsazsa at 12:00 PM on February 10, 2012
I would consider talking to a tax professional. I found that TurboTax did not handle my Part-Year Resident calculation appropriately when I first moved to California. That might be why you are paying so much to MO and not a lot to CA.
posted by politikitty at 12:24 PM on February 10, 2012
posted by politikitty at 12:24 PM on February 10, 2012
Response by poster: I was trying to figure out each state's state return, but it was very unclear to me how to make sure each state knew that only half (-ish) of my total income is from that state, and the other half is from the other. They start by asking the total income, and then there are extra forms to figure out the income percentage on each state. Problem is, it practically seems that I have to have finished CA in order to fully complete MO, and I have to have finished MO to fully complete CA!
TaxAct seems to take care of it fine, and I resigned myself to paying $15/state for the convenience. I've given them my credit card info and then they gave me a final PDF of each state's return -- but I haven't yet fully filed the state returns. It almost seems as if I can now file each state by mail, for free, using the PDF that Taxact gave me!
But maybe they'll end up charging my credit card anyway even though I haven't clicked "File." That would be fair, after all.
posted by lewedswiver at 2:25 PM on February 10, 2012
TaxAct seems to take care of it fine, and I resigned myself to paying $15/state for the convenience. I've given them my credit card info and then they gave me a final PDF of each state's return -- but I haven't yet fully filed the state returns. It almost seems as if I can now file each state by mail, for free, using the PDF that Taxact gave me!
But maybe they'll end up charging my credit card anyway even though I haven't clicked "File." That would be fair, after all.
posted by lewedswiver at 2:25 PM on February 10, 2012
This thread is closed to new comments.
I don't know of any state which charges a filing fee to file taxes. And state departments of revenue are not related to the IRS, and don't care what you do with your Federal tax return.
2) If so, how do I find the addresses to mail the state returns? Is it to the IRS, or is to a separate department of revenue for each state?
It's the latter. A few minutes with google, and maybe a phone call or two, should answer this question for you.
3) I will be owing taxes to federal, to CA, and to MO. How do I pay them? I have a ebanking checking account with the money, but I don't actually have any checks. Is there any way to transfer the money online to the IRS?
It's been a while since I owed money, but I'm pretty sure you can use an electronic check or transfer with the IRS. If you're mailing the others, get a postal or bank money order and keep the tracking number for your own records.
posted by gauche at 10:51 AM on February 10, 2012