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Tuesday, April 10, 2012

Free Tax Preparation Software

At SystemNotes, we love free software. Especially when it is Open Source (source code is readable and may be freely modified by the end users), and available on different platforms (Linux, Mac, Windows, iPad, Android, etc.).

When preparing tax returns, many people turn to paid software, or tax professionals. There's nothing wrong with paying for a useful service or software, but linux geeks often turn to shell scripts, or whatever open source software they can find before shelling out any cash -- no pun intended.

Here are some useful tools for preparing the US 1040 tax return and most common schedules:

Open Tax Solver

If your needs are simple, Open tax solver is quick and easy. There are even options for some state taxes.
There is a simple interface that takes inputs, and when finished, just click "Compute Tax." for the results.

Microsoft Excel Spreadsheet Income Tax Calculator

If you prefer to have a spreadsheet, or have more complicated tax needs try the "Microsoft Excel spreadsheet income tax calculator."

The way to use this is simple. Just fill out the information starting with whatever you have. For example, start with W-2's, Schedule A, Schedule D, etc. and the information automatically gets filled in on the 1040 spreadsheet.
Free Spreadsheet Software

If you want to use a spreadsheet, but don't want to spend money on Microsoft Office, or Excel, there are some excellent free alternatives.

Schedule D

If you have a large amount of stock or options trades, you might want to rearrange columns with a little shell script that uses awk.

You may have a report that shows items in a different order, e.g.
XYZ, 100, 01/02/2012, $100, 12/28/2012, $120

You want columns to line up for form 8949.
100 XYZ, , 01/02/2012, 12/28/2012, $120, $100

This little one-liner can handle columns in a .csv file that you download from your broker.

#!/bin/sh

CSV_FILE=$1

cat ${CSV_FILE} |awk -F, '{printf("%s %s, ,%s ,%s, %s, %s\n ", $2, $1, $3, $6, $8, $5)}' >> Processed-${CSV_FILE}


Of course, you can always copy and paste columns manually in your spreadsheet editor, but this little script allows combining of columns automatically, and is a good example of the power of awk. You just have to line up the columns you want to extract, as the format may be different from each broker.

Note that if you are running Windows, and don't have awk, you can install cygwin, or write a perl script to do the same thing.

Official Tax Forms and Publications

http://www.irs.gov/formspubs


Online Filing

The IRS, and some states allow online filing. Check the websites. State returns should be completed after the federal tax return is prepared, so that all the information is available.

Check with the IRS website to see whether to use Free File, or Free Fillable Forms.

http://www.irs.gov/Filing
https://www.freefilefillableforms.com


Other Links

You may find other useful software by using your favorite search engines, or checking one of these sites:
Please comment, if you find any other useful links.

Conclusion

If for nothing else, at least these programs are worth trying in order to compare the results with other methods. Oh, and did we mention they're free?