Should I File My Taxes Online?
I recently realized, while reading the Bible, that the closest thing we have to the Old Testament system of tithing and sacrifice is the U.S. tax code. Basically at the end of both everyone just throws up their hands and says “I don’t understand what this means! Have mercy on me!”
Thankfully we’ve come a long way from paper 1040’s. Now, more and more people are filling out their taxes online using Web-based forms, alleviating the need to download or install anything.
Income tax services, including TurboTax and H&R Block, now offer online filing of tax forms without any download. The benefit here is that you can work on your taxes from anywhere: home, work, even your phone. Furthermore, if you’re taxes are simple and you only need to file a 1040EZ, filing is free.
I’ve been a TurboTax software user for years, and decided to give the online Deluxe version a try. I was surprised to see that the online version of TurboTax Deluxe was nearly identical to what I remembered from last year’s software version. If you’re familiar with the software, you’ll walk right in and feel at home. The online version is $29.95 (same as H&R Block online) which is about $20 less than the retail software version. TurboTax also offers online help and support, including support from the TurboTax community. The web version also calculates your refund or payment on-the-fly, which is great.
A big draw of TurboTax online is the fact that you don’t need to pay until you file your taxes, so if you just want to give it a try you’re not out anything.
On the down side, I was disappoinited to find that I could not import my tax information from the prior year as I could with the software version. Everything had to be put in from scratch. The online help is also a bit sketchy, and while live help is available it is not always helpful or easy to come by.
The biggest issue came later. I spent a couple hours filling in my income and deductions and was relatively satisified…until it lost all my data. Either a cookie was deleted or I accidentally hit the “clear all” button, but somehow my hours of work had all disappeared into the cloud. That big green “$0” in the refund box just seemed to be laughing at me.
That said, I still see the benefit of online filing. If your tax situation is simple and you file a 1040EZ, online filing is a no-brainer. If you need to add deductions and want to save money, filing taxes online can also be a good option. However, if you typically have business deductions and other more complicated situations, or have questions about specific tax situations, stick with either the software version or go to a brick-and-mortar office.
If you do file online, make sure you create a secure user ID and password and keep them handy in case you forget them.
So what am I doing this year? I already have my appointment at the H&R Block office next week.