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In a nutshell, here are your options:
- Do it yourself on paper.
- Use online tax preparation software.
- Purchase tax preparation software to install on your personal computer.
- Hire a tax professional.
In my opinion, the most cost-effective way to file your taxes is to use an online tax service. And they make it so easy, it's almost fun (that is, if you don't already love it like me). So in this forum, I will only compare the online services available:
- Basic ($14.95) would work well for anyone who would normally file form 1040EZ or 1040A (in other words, you plan to take the standard deduction rather than itemize).
- Deluxe ($29.95) covers those that itemize, sold stocks during 2008, or own rental property.
- Premier ($54.95), in addition to providing the same features as Deluxe, offers unlimited one-on-one tax advice.
- Home & Business ($79.95)--useful if you have a business you own individually.
- Business ($109.95) covers you if you are a partner in a business.
Taxact.com
- Standard (free) covers 1040EZ, 1040A, and 1040 if your tax situation is no more complicated than itemizing deductions.
- Deluxe ($9.95) will work best if you sold stocks or own rental property, and it includes tax advice.
- Ultimate ($16.95) includes everything Deluxe offers plus state tax filing as well.
- Free: only covers form 1040EZ.
- Basic ($14.95): comparable to Turbotax's Basic service.
- Premium ($39.95): comparable to Turbotax's Deluxe service.
There are a couple of others out there, but they're not worth mentioning, because they didn't receive good reviews.
WWBD: This year I tried Taxact's free service, which worked great for us. If I had used Turbotax, they would have been able to transfer from last year a lot of information (ssn, names, birthdates, etc.), but I decided it was worth saving $30 to fill in that information anew. Why is Taxact.com free? What's the catch? A couple of things I noticed:- Every few pages you get a pop-up asking if you would like to upgrade to the Deluxe version; a little annoying, but still worth saving $30;
- Taxact doesn't seem to offer as much individual and detailed attention to those who have complicated tax issues.
The bottom line: I would use Taxact.com again next year.
Tips:
- Start with the simplest version. If you decide you need more tax help, there will be plenty of opportunities to upgrade.
- Start early. This tip has less to do with saving money (filing late adds penalties, though) and more with saving your sanity.
Also, if you're poor enough (like me!), you can use online turbotax (or a similar company) for free, and then e-file your federal return FOR FREE! You can then either pay (about $10) to e-file your state return, or print it out and mail it. It is AWESOME.
ReplyDeleteClick here for more info.
Yep, I was going to mention that too... at www.irs.gov you can find a list of several companies that offer free federal prep and filing if you make less than around $50K per year. You can pay for them to file the state tax, or print and mail it. Do the options and prices you reviewed include the state returns, Becky? If so, those might turn out cheaper than the irs option. Oh, and PS - I love doing taxes too! I ony started doing e-prep a few years ago, myself, and we have all sort of complications, like rental property and adoption. Fun stuff!
ReplyDeleteThe only one I listed that includes the state is Taxact's ultimate for $16.95. The rest charge extra for the state filing. I guess I glanced over the state filing options, because in Texas we don't pay state income tax.
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