Friday, March 15, 2013

A Taxing Question

It’s that time of year again. Time to fill out your income taxes. Uncle Sam and the State want what’s coming to them. (Or to give you back the money you have been loaning them at no interest!)

The question – how will you prepare your taxes? Will you file paper returns, from forms you picked up at the library? Or will you use one of the many computer-based programs that does the math for you and allows you to file online?

For many years now, I have been using a program called TaxCut (now called H&R Block At Home) from H&R Block. I purchase the version that includes both the Federal and State forms and allows up to five Federal e-files at no extra cost. (It does cost $9.95 extra to file the State form online, but I usually mail that one in via the Post Office for the cost of postage.) I purchase this version because I also prepare the taxes for my two daughters, which I can then file by e-file at no extra cost for the Federal forms.   

I usually pay between $30 and $35 for the combined version – the best deals have been found at Amazon, which allows you to download the program directly from the Amazon site and provides a key code for the free Federal e-filings.

If you have used a computer program in the past (either from H&R Block or TurboTax from Intuit), your information from the previous filings can be easily accessed on your computer and downloaded into the new forms. The program even automatically updates the latest information from both the IRS and the State before allowing you to file your returns.

The program works by asking you a series of questions (in a logical order) and walks you through the forms that you have to file, based on your situation. And, best of all, it does all of the calculations! At the end, you have a choice of either e-filing or printing out your returns to mail in. In addition, it allows for direct deposit of refunds directly into your checking (or savings) account or, if you owe a tax, it will prompt you to allow for direct payment to Uncle Sam or the State from your checking account.

If you have a simple tax situation (only W-2s and little else) and plan on taking the standard deductions, both H&R Block and TurboTax will allow you to download and prepare your returns for free and also allow you to e-file the Federal form without additional cost. (It will still cost you extra to file the State tax form – but you can print it out and mail it in for minimum costs.)

In any event, it’s time to get going – and good luck.