Summary:
Many people are afraid of filing their own taxes
and end up paying a lot of money to companies like
H&R. But online tax return filing
software tools now make it easy (even for a moron
like me when it comes to tax law) to do it.
You do not have to know the tax law and you can
never commit a mistake.
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When
I filed my taxes (1040-EZ) for the first time, I was so
scared of the whole process that I simply sat in front
of a woman in H&R and answered all the questions
that she asked me. While I paid close to a hundred
bucks, but I was still relieved it was over. Over
the years, though, things became complicated. I bought
a house, got married, started investing
online, started to itemize my deductions, and even
worse, my wife started a small business in her
garage. In that process, H&R started to charge
us hundreds of dollars.
That is
when a friend mentioned that I try filing my taxes using a
software. So in 2001, I filed my taxes on the
TurboTax website. I used the web-based version
since it was less expensive than getting a CD-ROM in the
mail or downloading it from their website. More
importantly, I could work on my taxes whenever and
wherever I wanted. So when I needed to print
something I did that part in the office and used the
office printer. It was way too simple and all I
needed to do was to basically plug in information from
all the stuff that I had received from banks, my
employer, and my mortgage lender. In other words,
even a six-year old can get that right. Plus, the
software checks the whole thing for you to make sure
that you get everything right. (Related:
Online shopping safety)
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 Another
part that I liked is that the software actually reminds
you if you claimed all the credits that you are entitled
to. From my experience for years with H&R, I
realized that the folks there get paid not by the hour
but by the number of returns they complete. So
they are always in a hurry and rarely bother to ask
about some obscure credit that you are entitled. Few
other benefits of using a tax software:
- The return is filed electronically
so it gets to both the IRS and the state agency in a
matter of hours and you get an acknowledgement
generally in a day or so that you are all
set.
- And the refunds are so quick.
I entered my bank information and did not even have
to wait for the check. Since I use online
banking, I simply logged on to see my refund
that came in less than a week. (Related link:
How to use your refund smartly)
- The software remembers everything
so in following years I did not need to complete all
the information. Most fields are already
populated and you simply add new information.
- The returns are saved online for
years and you can access them whenever you need to.
Recommendations on how to use
online web-based tax program or software on a CD-ROM
- While I have used only TurboTax,
there are many others like
TaxAct, TaxHead, TaxCut,
TaxBrain, etc. Do your research and pick the
one that works for you.
- I like the web-based version but
you will be just fine with a CD-ROM as well.
Installing it easy and you will have most
functionalities of a web-based version. They
are slightly expensive but you can get a deal
sometime on some websites. If your income is
low, you may also be eligible for free online filing
on certain websites.
Related:
How to prevent identity theft
What to do if you do not file taxes?
Money tips for couples |
