Don't Be Too Trusting Of Your Tax Software
I have been grinding over the pretty big chunk of money that I needed to send to the IRS and the Idaho Tax Commission--and wondering, "What did I do wrong?" I made less money than last year--and yet I owed a disturbing amount of money.
I read through the final printed tax forms to see if they made sense. I noticed that I had a truly astonishing amount of interest and dividend income from Charles Schwab--so much so that I decided to pull out of the printed form, instead of relying on the data that TurboTax downloaded from Schwab. And sure enough: it appears that TurboTax downloaded my 2009 Form 1099-DIV and Form 1099-INT without removing the 2008 data (which was quite a bit higher). The net result was a huge chunk more interest and dividend income than I really earned.
I'm writing checks for about $3000 less because I verified the data before mailing. Be careful--and remember that you don't have to be Timothy Geithner to have TurboTax mess up your taxes. (Of course, not being Timothy Geithner, you will notice that it had me paying too much, not too little.)