Excel 1040 Review – Free and Fast
Lots of tax preparation products are created for people who aren’t overly technically proficient and who would rather answer interview-style questions that fill out government forms. That’s fine, for those who are interested in that, but it is a bit of a roundabout way of doing your taxes that necessarily involves more time and work. Excel 1040, a product from Glenn Reeves, makes it possible for you to calculate your taxes using Microsoft Excel. While Excel 1040 won’t be for everyone, those who like a more direct and hands on approach to filing their income taxes will find this a good way to go. Read on for our full Excel 1040 review.
Excel 1040 Overview
While not tax preparation software per se, Excel 1040 makes it easy to calculate your taxes, as Glenn Reeves has created a spreadsheet that looks identical to the 1040 form you’ll receive from the IRS. There are two versions of Excel 1040:
Excel 1040 Full version (.xlsx format) This includes all forms and schedules, but requires Excel 2010 or later to use.
Excel 1040 Lite version -This version does not include the following:
– Schedule C, Business Income,
– Schedule E, Supplemental Income and Loss,
– Schedule F, Profit or Loss from Farming
– Schedule SE, Self-Employment Income,
– Form 6251, Alternative Minimum Tax – Individuals
– Form 8959, Additional Medicare Tax
– Form 8960, Net Investment Income Tax – Individuals, Estates, and Trusts
– Form 8962, Premium Tax Credit
The Lite version will work in older versions of Excel from 1997 through 2003. Both versions are free from the Excel 1040 Website, and spreadsheets are available for previous years, as well, going back to 1996.
Using Excel 1040 is pretty straightforward, as the spreadsheet is designed to look like the official tax forms. You’ll find tabs for entering date from your W2 or 1099, and cells that require data input are color-coded in blue. Once all the information needed for a particular calculation is entered, the spreadsheet will display appropriate totals. Since the Excel 1040 spreadsheet is designed to look like the official 1040 forms, filling in the information is fast and easy.
Officially, you cannot print and submit the Excel 1040 spreadsheet as your 1040 form, though Reeves says he has done so. The IRS has specific rules regarding the format of computer-printed forms and Reeves admits that he has made no effort to have his spreadsheet conform to the IRS specifications. On the other hand, it’s a simple matter of using Excel 1040 as a calculator and then you can simply transfer your information to a paper 1040 form. Alternatively, you can take the information from Excel 1040 and use it with the online tax preparation software of your choice. Not everyone will want to use Excel 1040, of course, as it doesn’t come with much in the way of tech support, a knowledge base, or any of the other bells and whistles that one generally finds in a paid tax preparation product. On the other hand, it’s free, and a useful tool and anyone who ordinarily prepares their Federal income taxes manually will find Excel 1040 to be a useful tool.
Keep in mind, too, that Excel 1040 is for Federal income tax returns only, so it won’t help you much with your state returns. For that, you’ll need another product, or you’ll just have to file your state returns manually.
You should also be aware that Excel 1040 is simply a tool for helping you calculate your taxes. It doesn’t know anything other than the information you provide it, so it cannot make suggestions regarding how you might be saving money. Of course, no tax software can do that, and this is where most taxpayers fail to adequately prepare. The US Tax Code is very lengthy and complex and actually allows for hundreds of ways that the average taxpayer could be saving money through allowed income tax deductions. The problem is that most tax software, including Excel 1040, doesn’t know about these things, and most taxpayers don’t have the time or the inclination to wade through the complex tax code to find ways they could be saving money. So they just continue paying more than they need to because a simple way of becoming aware of all of the deductions that the IRS allows isn’t included in most tax software, including Excel 1040.
That’s not the fault of the tax software, as making any program completely aware of every single possibility for a tax deduction would make the software overly complex. Plus, many deductions are context-dependent; the IRS may allow some expenses to be deducted under certain conditions but not under others. That’s a situation that’s far too complex for Excel 1040 to discern. On the other hand, there is a resource available that makes it simple for the average taxpayer to save hundreds or even thousands on their Federal income taxes. This resource makes it relatively easy to learn about allowable tax deductions that most taxpayers could be using to save money but don’t actually know about. It’s not because they’re “loopholes”; it’s because the tax code is just too complex and has too many annual changes for anyone to keep up with.
Excel 1040 Summary
Fortunately, a resource that shows you all of the ways to save money is available. You can see the deductions you could be taking and use them with Excel 1040 or the software of your choice to lower your tax bill. You won’t have to read the US Tax Code and you won’t have to decipher complicated tax-speak or legalese. The information will be provided to you in simple English, so you understand how to put it to use this year and every year from now on. You’ll be informed about changes in the tax code and how they’ll affect you. Then you can take this information and enter it into Excel 1040, or TurboTax or whatever other software you’d like to use to help you file your taxes. In the end, you’ll be saving money and paying the lowest amount of taxes that the law allows. And we all want that. Excel 1040 is a great piece of software, but it’s not enough.