|From the Kenosha News on 2-25-07
Doing your taxes on-line can be a good choice
I’ve been using tax software to do my taxes myself for over 10 years. This year, one of my work colleagues – Matt – showed me how he had done his taxes using an on-line service. Both offer advantages and disadvantages. Below are criteria to help you choose which strategy is best for you.
There are multiple on-line products as well as desktop products (which install on your computer.) The two major brands are Intuit’s TurboTax and H&R Block’s Tax Cut. Their web sites are www.turbotax.com and www.taxcut.com, respectively. I tested out the TurboTax on-line product but opted to use their desktop product as I usually do.
The first thing I compared was the price. TaxCut has less expensive on-line options starting at $9.95 up to $39.95. TurboTax on-line options start at $14.95 up to $74.95. All of the TurboTax on-line products charge extra for the State portion of the return: $29.95 for the state return in addition to the $14.95 base package, bringing the total cost for my usual return to $44.90. The TurboTax Deluxe Federal+State package costs about $44.95 on-line or in local stores.
With TurboTax on-line, you can begin your return without paying. It will prompt you to pay before you can e-file or print your return. You can, however, export your tax data from the on-line version to a .tax file, which you can then import into the desktop software, at no cost. The cost of the on-line services is per return, whereas you can use the desktop software to do any number of returns. Since I’m doing returns for my son in addition to my own, the on-line option is not cost-effective for me.
A second item to consider is that the on-line version will store your data on their server rather than on your computer. So, if you have doubts about the reliability of your computer, or you plan to change computers soon, you may want to use the on-line version so as not to worry about losing your data or migrating it to another computer. Of course, the whole on-line process is a secure transaction, so your data is encrypted to prevent internet snooping. If you have multiple computers, using the on-line version allows you to start the process on one and finish it on another. You can do your return in parts; it will prompt you to save each time you sign out. Don’t just close your browser! When you do your taxes next year, your data from this 2006 return will still be stored and prompt you to import it. The first step to completing a return is to get a login ID and password; use the same one next year.
If you have a dial-up internet connection, it is most likely too slow to consider using the on-line tax option since you need to be connected to their server during the entire process.
My previous tax article from February 6, 2005 further explains the desktop software option. You can access it at www.sabbarpublications.com; click on the News Archive link at the left and scroll down to that date.
By Carol Sabbar from the Kenosha News on 2-25-07