Contributions to Your 401(k)

The 401(k) plan contributions you elect to make come directly out of your salary. Since the contributions are made with pre-tax dollars, your employer does not include these amounts in your taxable income for the year. At the end of the year, when you receive your W-2 form that shows your earnings, you will notice that your wages subject to federal income tax are lower because of your 401(k) plan contributions. Since the wages are not counted in your taxable income to begin with, you do not take a deduction when you file your return. However, when you prepare your tax return, it’s possible to calculate how much income tax your 401(k) contributions saved you. For example, if you contribute $8,100 to your 401(k) during the year and that amount would be taxed in the 33 percent bracket if included in taxable income, then your tax savings is $2,673.

Increase in Your Take-Home Pay

Your 401(k) plan contributions also reduce the amount of your income tax withholding. Each time you get paid, your employer withholds money for your federal income taxes based on your expected taxable income. However, if you make 401(k) plan contributions, the amount of money subject to withholding will decrease since your taxable income is less than your actual salary. The result is more money in your take-home pay each pay period.

The Savers Tax Credit

In addition to the tax savings available for your contributions to a 401(k), the IRS also offers the Savers Credit if your Adjusted Gross Income (AGI) doesn’t exceed certain maximums. This credit offers a dollar-for-dollar reduction of your federal income tax bill. In 2010, single taxpayers whose AGI doesn’t exceed $27,750 can receive a credit up to $1,000 and married taxpayers with an AGI of $55,500 or less can receive up to $2,000. If your AGI doesn’t exceed these thresholds, you are at least 18 years of age and are not a dependent to another taxpayer, then you need to prepare IRS Form 8880 with your tax return to claim the tax credit.

Misconceptions About 401(k) Contributions

The contributions that you make to a 401(k) plan only reduce your income taxes, not your Social Security and Medicare taxes. These two taxes only apply to your earned income, but you do not get to claim any deductions before these taxes are assessed. For example, if your gross wages for the month are $2,500 and you contribute $400 to your 401(k) plan from it, there is withholding on the full $2,500 for Social Security and Medicare even though for federal income tax purposes, there is withholding on $2,100.

Below are five tips for making the most out of your charitable giving this year:

• Consider the types of charities you want to give to. What really moves you and makes you want to give?
• Make sure your pick an organization that is eligible to receive tax-deductible charitable contributions so that your contributions count.
• Remember that December 31, 2010 is the deadline for making charitable contributions count on this year’s tax return .
• Some out-of-pocket expenses like parking, supplies, and mileage driven to and from volunteering at a qualifying charity are deductible.
• Make sure to keep receipts for both cash and in-kind charitable donations. Every receipt should include the charity name, date, amount of your donation and the resale value of any items you may have received for your contribution.

We’re also pleased to announced that through the end of 2010, TurboTax will donate up to $100,000 to a selection of charities on behalf of consumers. Causes range from emergency preparedness to lending a helping hand to America’s youth. Simply visit the TurboTax Facebook Page or givinggivesback.com to find out how you can have TurboTax donate $5 to the charity you select.

Name of company entering: Intuit, Inc.

Category: Supporting

How does a seasonal business with 800 employees scale help to meet the needs of more than 20 million customers? Simple. Create a community that enables customers to help each other.

Since its launch in 2007, the TurboTax Live Community has helped more than 10 million unique customers get free, contextually relevant answers to their tax questions while contributing to an improved customer experience.  In that time, there have been 27 million views of questions and answers in the community.

Who would want to answer questions in a tax community?

• Millions of TurboTax customers actively participate in the Community, asking and answering questions, creating a robust, long-tail knowledge base that is easily accessed and searched.
• 90 non-employee super users – this group of extraordinary volunteer experts contributed over 115,000 answers last year alone.  To make them even more special, this group offers their expertise for free:  not only does TurboTax not pay them; they also do not sell any services of any kind through the community.
• The vast majority of all TurboTax employees (650+) contribute answers, including the GM and VPs of Product Management, Customer Experience, Engineering, and Marketing.

The next step for the Live Community was to increase awareness and use.   After conducting a holistic review of online channels, the team chose display advertising as the right venue to test a new way to bring the Live Community experience to users all over the Internet, wherever and whenever they need the help.

Business results:

The goal with this sort of social/advertising mashup is usage. So did people use the Live Community support TurboTax offered?

To catch people at the time and place they most need tax help, TurboTax did a first-ever custom integration of Live Community into the Business and Finance section of Yahoo Answers – and consumers really reacted. The Live Community integration saw a 58% higher engagement rate than when featured on other Internet locations.

To reach an even broader audience TurboTax ran its award winning “TurboTron” rich media unit on the 2010 Pro Bowl and Super Bowl weekends on Yahoo, AOL, MSN homepages.  This ad was seen over 800M times! With many interactive experiences to choose from in this customized ad unit, the Live Community was the most engaging part of the experience with a 61% engagement rate compared to the next closest (of 5 panels of content).

Name of company entering: Intuit, Inc.

Category: Energizing

What are TurboTax Reviews?

At TurboTax, we believe the most powerful recommendation for any product comes from a friend or someone you know. This year, TurboTax took that naturally occurring offline behavior to the web by enabling customers to share their tax filing experience with their Friends, as well as customers looking for reviews on TurboTax.com.

What Makes TurboTax Reviews an Effective Use of a Social Application?

TurboTax is approaching reviews in a new way: taking a fairly “traditional” user generated asset (reviews) and adding in a layer of social networking on top to allow our customers to be our best sales people- and it’s working). TurboTax provided the platform for customers to be the gasoline in a reviews engine filled with over a hundred thousand of unbiased user-generated reviews on TurboTax.com. After customers contributed their TurboTax review, they were able to share via a “Publish to Facebook” option. At the end of their TurboTax tax filing experience, customers also had another option for sharing their excitement about finishing their tax return via “Friendcasting,” the act of posting a short blurb to your Facebook newsfeed.

TurboTax Reviews drove the following business results:

• “Friendcasting” is four times more engaging with a 30% higher conversion rate than banner ads

• Sharing on Facebook drove acquisition with a 25% higher new customer mix than online advertising

• Customers posted more than 100,000 unbiased reviews on TurboTax.com

• TurboTax Web units increased by 18% in 2010

Learn More About TurboTax Reviews:

See Reviews in action.

Read another perspective on TurboTax Reviews.

Name of company entering: Intuit

Category: Supporting

What is @TeamTurboTax?

TurboTax is the nation’s leading tax preparation software from Intuit Inc. TurboTax makes it easy for Americans to prepare and file both federal and state income tax returns quickly and accurately.

Since it was founded in the mid-1980s, TurboTax has relied on word of mouth marketing as its primary growth driver. Over the past four years, TurboTax has increased its presence in social media channels like Twitter as an additional way to engage with its more than 20 million customers. This year, TurboTax launched @TeamTurboTax, a group of 40 tax and technical experts with a primary mission: help customers on Twitter during their point of need during tax season.

What Makes it an Effective Use of Social Applications?

TurboTax has a track record of using communities to help customers get answers to their tax and technical support questions. Its Live Community has been used by more than 10 million people since it was introduced three years ago.

This year, TurboTax created the @TeamTurboTax Twitter presence, as well as a process to enable the company to quickly and proactively address customer matters in short form. And because Twitter is a public social media tool, TurboTax has been able to better meet their customers where they’re at, providing help almost immediately after a question is raised.

@TeamTurboTax scaled existing TurboTax efforts by 20 times during last year’s tax season, bringing 40 tax and technical experts to customers in need of help on Twitter. The @TeamTurboTax team drove the following business results:

• 48% effectiveness in helping complete tax returns

• 46% follower rate of Twitter users specifically seeking tax help

• 71% likelihood of customers to recommend TurboTax

• 4 minute response time on average while helping customers all tax season

Learn More About @TeamTurboTax:

Follow us on Twitter.

Get to know our rockstars.

Read another perspective on @TeamTurboTax.

Intuit began as a company that uses innovative ways to get close to customers, such as founder Scott Cook’s infamous “follow-me-homes,” where he’d watch customers manage their finances so he could learn how to build a better personal finance product. TurboTax uses social media is to bring customers together and provide tax expertise (example: Live Community) or gather feedback (see: Inner Circle) and most recently to connect directly with customers existing platforms, like Facebook and Twitter.

This year, TurboTax connected 40 tax and tech experts from across the company with customers in need on Twitter using @TeamTurboTax. The @TeamTurboTax team addressed hundreds of questions from Feb. 1, 2010 through the tax deadline. About 71% of those we asked decided to recommend TurboTax after their interactions with the team.

While using the best tools to connect with customers is always important  at TurboTax, we don’t want to forget to show you the most important part of making anything this big a success: the people behind the team. With @TeamTurboTax, the subject-matter experts, from seasoned CPAs to technical gurus, were the secret sauce to making our customers happy campers.

Last week we celebrated the end of tax season and inducted the employees that make the team what it is today into the @TeamTurboTax Hall of ‘Twame.

Below we highlight seven of our 40 best and brightest: our Customer Advocate, MVP, three Process Gurus, and two Go-Getters. As you’ll see, not only did we evolve the means by which we deliver customer service, but the way we measure it too.

Our Customer Advocate, Christine Thacker, is a TurboTax Live Community Moderator day-by-day. This tax season, Christine helped the most customers on Twitter this tax season (and she’s even a Twitter newbie!). Being a part of @TeamTurboTax is a natural fit for Christine, who sees @TeamTurboTax as a great way to build relationships with customers and an extension of her work in Live Community. Christine says, “I’m so happy that I have opportunity to participate. My favorite part of the tax season was seeing retweets from customers that were ‘wowed’ by their @TeamTurboTax experience.” When not tweeting or otherwise helping customers right and left, Christine spends her days with her two children, volunteering in her son’s kindergarten class, or doing anything from relaxing to gardening outdoors.

What is in the DNA of an @TeamTurboTax MVP? Far more than Twitter expertise, so it seems. Lee Ferris, CPA and 30-year tax season veteran, brings her tax expertise to TurboTax customers on Twitter by participating in @TeamTurboTax. While not tweeting, Lee is busy as tax expert for a broader team built around getting customers answers fast, and managing tax experts from various states, from Alabama to Oregon. Lee’s favorite moments helping customers this tax season involved helping grandmas understand if they can claim their grandchildren as dependents, and military spouses understand new tax laws. Lee’s favorite thing about using Twitter to answer tax questions? How short tax answers can finally be! When not helping customers or TurboTax employees keep up with tax law changes, you can find Lee reading, watching CSpan2 Book TV!

@TeamTurboTax is all about how we help customers as quickly and easily as possible. Our three Process Gurus, Zak Jacobson, David Kanter, and Ben Kanspedos are part of the Hall of ‘Twame because of their focus on quickly finding innovative ways to help customers even faster during a very busy tax season.

Zak Jacobson, Process Guru and software engineer at TurboTax, has been part of a variety of projects at TurboTax, including the team behind the sweet new iPhone app from TurboTax, SnapTax. Zak, a long-time Twitter user in his personal life, joined @TeamTurboTax because he feels using Twitter to reach out to customers on a personal level is not only a great idea, but a perfect application of Twitter and social marketing. In his spare time, you can find Zak snapping pictures around San Diego and elsewhere.

David Kanter, Process Guru, spent six years as an operations manager at Intuit before moving into our Customer Care organization. David’s pedigree makes him the perfect match for TurboTax customers in need: operations expertise, a customer-centric attitude and a passion for social media. David is an early adopter of Twitter, and in fact, secured many Twitter accounts for major Intuit brands before the rest of the company rallied around the cause. His favorite experience this tax season? When one customer said “eureka!” once he was able to solve their problem. This gave David a case of the warm fuzzies. When not tweeting or working, David enjoys playing with his four-year-old, playing rock guitar, and attending SO3 concerts in San Diego. You can also find him running in San Diego through Balboa Park.

Ben Kanspedos, Process Guru, creates training content for TurboTax employees. An avid Twitter user himself, Ben appreciates when companies he reaches out to for help on Twitter take the time to respond. As a result of his own experiences, Ben thinks using social platforms to answer questions and provide targeted information has so many benefits for customers. Outside of work Ben likes playing with gadgets, listening to music and searching for the perfect beat.

Tons of customers are out there talking about TurboTax on Twitter, but since @TeamTurboTax is so new, we need to let them know we’re here to help. Our two Go-Getters, Kim Bayne and Lucy Beard, helped connect the most customers with @TeamTurboTaxthis tax season.

Kim M. Bayne, a Go-Getter and Twitter veteran, is a senior technical writer and content developer at TurboTax. Her focus on customer and agent facing support content makes her a perfect match for supplying customers in need with helpful tidbits fast. Kim is an avid blogger herself, and was at the forefront of watching how companies would use Twitter. Kim joined the @TeamTurboTax team because she wanted to return to using Twitter for Intuit and helping customers. Kim’s favorite case of helping a customer this tax season took place when she helped a frazzled customer with login issues via chat. Kim quickly got the customer’s login information late at night when the customer needed help most. Outside of work, Kim is an avid crafts artisan and loves researching the business applications of augmented reality. She plans to live long enough to experience a Star Trek holodeck in her lifetime.

Lucy Beard, Go-Getter, and a customer care analytics manager, focuses on data most of the time. Her passion for connecting customers with the right expert brought her to the @TeamTurboTax team, where she helped customers during odd hours (when they need it most!). When not using Twitter for work, Lucy uses it to find out more about her favorite topics, like geocaching or David Beckham. Her favorite way to have a ball with customers on Twitter? Finding out what customers were going to spend their refund on. Lucy says, “…they get excited to tell me about the new pair of jeans, the student loan to pay off, or a wedding they are saving for. It brings it home that TurboTax makes a difference in people’s live and puts more money in their pocket.”

Did @TeamTurboTax help you on Twitter this tax season? Share your story in comments!

With TurboTax you can get that sense of accomplishment with ease. It guides you like a GPS, showing you exactly what to do at every turn, giving you clear, easy-to-follow directions. So you can be on your way to your biggest refund and your next exciting adventure.

Of course you might need supplies for your next adventure – and we’re rolling out a Twitter contest that will provide them to lucky winners. Now that you know how TurboTax can ease your anxiety about April 15, tell us what you’d rather do instead of your taxes?

o Watch 48 hours of M*A*S*H reruns?

o Eat 239 hamburgers?

o Spend 12 hours on the same roller coaster?

o Go on a blind date?

Starting March 15, a winner will be randomly selected each day from all entries that day to win one of the following prizes until supplies last.

o HP Mini 210

o Some TurboTax ☺

o TurboTax aluminum and super cool water bottles

o Would You Rather? board game

The options are limitless, so follow @TurboTax, tweet your response to @TurboTax with the hashtag #taxesor?, and see if you’re a lucky winner!

Research by VisualizingEconomics.com.

Design by JakeMize.com.

Everyone is talking about their tax refunds. In fact, a ton of people have filed their taxes already, and are waiting for their refunds. What will you do with your tax refund?

Embed the above image on your site using the code below:

<a href="http://intuitturbotax.files.wordpress.com/2010/02/refunds1.jpg" target="_blank"><img src="http://intuitturbotax.files.wordpress.com/2010/02/refunds1.jpg?w=554&h=694" alt="TURBOTAX-REFUND" title="TURBOTAX-REFUND" width="554" height="694" class="alignnone size-full wp-image-8428" /></a><br /><a href="http://www.turbotax.com/" target="_blank">Free Tax Filing, Efile Taxes, Income Tax Returns</a> – TurboTax.com

Did you know that more than 80 countries are participating in the Vancouver Olympic Games? Some of them have the highest tax rates in the world, and others, the lowest. Below, check out who’s paying the most and least according to Business Pundit, and how many athletes will represent each country in Vancouver.

Highest:

• Belgium: 4 athletes
• Finland: 102 athletes
• Germany: 164 athletes
• Denmark: 5 athletes
• Italy: 184 athletes
• France: 89 athletes

Lowest:

• Switzerland: 143 athletes
• USA: 211 athletes
• Australia: 40 athletes
• Canada: 198 athletes
• Japan: 112 athletes

Here at TurboTax, we’re taking a simpler approach to celebrating both the Olympics and tax season – Twitterlympics. Taxes and the Olympics? There’s a tie-in? Yes. There is no reason we at TurboTax shouldn’t stir up a little healthy competition of our own to bestow upon the best competitors wonderful rewards (this time, free tax software instead of Gold medals).

Between the Alpine skiing and curling competitions, we’ll be celebrating the Olympics tax season-style – with small competitions of our own on Twitter each day next week.

Follow us @TurboTax to join in on the games beginning Monday, Feb. 15 – let the games begin!

Tune in for the next TurboChat Feb. 25, 2p.m. PST – 2:30 p.m. PST (5 p.m. EST – 5:30 p.m. EST). Visit our Facebook Page, become a Fan, and chime in with questions of your own so we can get you an expert answer, live.

View today’s TurboChat below:

It’s unfortunate that people filing simple tax returns are often prime targets for national tax preparation chains who advertise low fees for at 1040EZ. But once you’re in the door, you may find additional fees pile up and what you thought would cost $39.95 actually costs you $100 or more.

Don’t let that happen to you. The fact is, you can do your own taxes. Last year 40 million people did their own returns with software. And here’s where this gets really interesting – there are free options out there to help taxpayers like you keep more money in their pockets where it belongs.

Filers with simple returns should know about these free options:

• If you have an adjusted gross income of $57,000 or less, you can prepare and e-file your taxes through the IRS Free File program available at http://www.irs.gov.
• Taxpayers who don’t qualify for the Free File Program can use TurboTax Online Free Federal Edition at www.turbotax.com. There are no income or eligibility requirements. It’s designed especially for people filing simple federal taxes.

There are also some great tax resources available online where you can get more information or even answers to your tax questions.  We like Don’t Mess with Taxes, Tax Girl and WalletPop if you are looking for tax information.  If you have questions you need answered, TurboTax Live Community offers instant answers from other TurboTax customers and tax experts. And if you are a Twitter user, you can get answers to your questions on Twitter from @TeamTurboTax.

Best of all, these free tax resources mean you don’t have to spend your hard-earned money on something you can do yourself. They don’t call it an “EZ” for nothing!

So how do you get involved? It’s easy.

Visit our Facebook Page and click the TurboChat tab. You can visit anytime between now and Feb. 4 to enter your question, or come back to join us live Feb. 4. Bob will answer questions in a video format, streaming live.

Once you’re on the TurboChat tab, type a tax question in the “update your status about this event” box and post. Bob will address it Feb. 4!

Want more help this tax season? Don’t fret, you’ve got options.

• @TeamTurboTax: Follow us on Twitter to get tax and tech help live from our team.
• Live Community: All tax season, search tons of questions and answers by your fellow TurboTax users, superusers and tax experts. You can enter your own questions too and get answers fast.
• TurboTax Support: Get free answers to the most-asked questions about our products and tax time. Live chat with support.
• Get TurboTax tools and tricks: Anything from TaxCaster so you can estimate your refund, to tons of great in-depth articles about the tax topics folks want to know the most about.

Our next TurboChat will take place Feb. 11. Mark your calendars!

Among top New Year’s resolutions, people always promise to fix up their fitness regimes or financial habits each New Year but by the end of January so many people get back to their normal routine, get busy, and just plain forget.

One of the keys to success with changing any habit is taking baby steps to make the resolution a permanent improvement. Here are 15 simple starters for shaping up how you eat, work out, and get financially fit in 2010:

Shape Up Your Diet in 5 Steps:

Stephanie Averkamp, San Diego-based ACE Certified Lifestyle and Weight Management Consultant, shares five small steps you can take to kick-start healthier eating habits in 2010, starting with breakfast:

1. Eat breakfast: Not a big morning eater? If you think you don’t have time or are not hungry in the morning, start by getting used to eating something when you wake, even if it’s just a banana.

2. Choose food closest to it’s original form: It’s simple – pick an apple over apple sauce or apple juice. Love chips and fries? Opt for a baked potato instead.

3. Divide your dinner plate into 3 sections: Fill half of your plate with vegetables, and each remaining quarter with whole grains and a lean protein source respectively. Perfect example? A dinner plate that is half salad, a quarter brown rice and a quarter grilled chicken.

4. Create a healthy kitchen: Keep healthy food visible. Place healthy food like fruit on counter tops, whole grains at eye level in your pantry, cottage cheese and lean dairy on the top shelf in your refrigerator, and snacks like almonds in clear, portion-sized containers.

5. Sweat the small stuff: Make small, realistic changes that over time will become a permanent part of your lifestyle.

Kick-off Fitness that Fitness Regime in Just Five Steps:

1. Have a goal or vision, make it as real as possible: Cynthia Miranda, program manager for MedFit, says if weight loss is your goal, imagine and visualize yourself at that ideal weight. Clip pictures of someone at a fitness level you aspire toward, and stick it to the fridge. If you want to run a 5K, spend 5 minutes each day imaging yourself finishing the race.

2.  Create a plan and date your goals: Create a weekly goal at first. For example, Miranda says if your goal is weigh loss, the first week’s goal might be to spend time meal planning and week two you’ll make it a goal to eat three fruits per day.

3.  Work with a professional: Through classes, workshops, or with a personal trainer, you’ll be able to quickly benefit from years of experience and knowledge that is hard to gain on your own otherwise.

4. Be open to fun and different activities: If you are used to strength training, try hiking; if you only run, bounce into a spinning class.  Bike with your children, take a family hike, try yoga or meditation, get on a boogie board.  Make being active the fun part of your day.

5. Recruit your friends and family: It’s no fun being alone all the time when you’re working out.  Meet a friend for a lunch class, schedule time for strength training with a co-worker, or cook with friends who like to eat healthy.

5 Simple Tips to Tackle Finance and Tax Season Laziness:

Let’s be honest, it’s tax time. Tackle the most pressing financial matter of 2010 first. What you do now can vastly improve your financial situation all year long.

1. Contribute holiday cash to an IRA: Did you receive some cash from gramma? Have a small chunk of savings just sitting around? Make it work for you by contributing to an IRA before you file your 2009 taxes, at the latest, April 15, 2010. According to the IRS, “you may be able to deduct some or all of your contributions to your IRA.”

2. Keep receipts to write-off resolution-related expenses: Join a weight loss program? Visiting a dietician or nutritionist? Keep your recepits this year, some of this stuff might qualify as a tax write-off, easily boosting your refund and putting more cash in your pocket with little effort.

3. Wanna be charitable this year? Charity is a great way to give back, either through volunteering your time or giving money or goods like used clothing. Don’t forget the monetary benefits of giving. Start 2010 right by keeping track of what you give for a refund booster on your 2010 tax return.

4. Put savings on auto-pilot: Reduce your taxable income next year by choosing to automatically contribute to your 401(k) next year, and set-up a free high-yield savings account online where you start by contributing even a small amount, say $25 per pay period, to an account you can’t easily drain.

5. Pay down debts: Too often we make lofty goals when it comes to paying down debt. Start with one credit card and focus in on one realistic first step, like doubling minimum payments toward one card with the highest interest, then slowly expand once you can meet this goal without skewing any of your other finances toward the negative.

What, Where, When:

• TechCocktail San Diego, brought to you by TurboTax
• Bar Basic, San Diego
• Feb. 11, 2010, 6:30 p.m. – 9:00 p.m.

We hope you’ll save the date and join us for a night of casual cocktails and bites.  We’ll also be on hand to show off the next step in tax preparation online and in the mobile world. Check out the blog post from Frank Gruber of TechCocktail here or sign-up now.