NERDS ON CALL: TAX DAY 2012, ISN’T THE 15TH Tax Resources for April 17th
California, (March, 2012) – We hate to bear bad news, but April is going to be here before you know it. If you haven’t already tried electronic filing your tax returns, it doesn’t take a Nerd to tell you it’s the way to go. With so many choices that offer roughly the same service, how’s a tax e-filer to choose? NERDS suffered the headache of checking out some of the most popular options available to file your returns electronically.
We’re not sure if it’s intentional, but the pricing plans offered by the major tax preparation services are pretty confusing. Their homepages are emblazoned with “Free!” but the reality is that it’s typically only to file a basic federal 1040EZ form. Filing state forms costs more, additional federal forms often cost more, and they all offer different support structures based on the package you choose. We’ll try to break it down into some common categories to help with the confusion.
The Budget Do-It-Yourself Pro: If you’ve paper filed your own taxes in the past and have a pretty straight forward financial picture, you’re probably just looking for an easy, inexpensive way to file electronically. FreeTax USA (www.freetaxusa.com) is one of the cheapest options with few bells and whistles. The basic version is free and includes a tutorial walk-through to complete your forms, the ability to file individual deductions, and print PDF copies of your returns. State filing is $9.95, and upgrading for an additional $5.95 gives you the ability to amend your return later and get access to audit support should you need it in the future.
The Confident but Cautious: The two largest names in online tax preparation are TurboTax (www.turbotax.com) and TaxACT Online (www.taxact.com). Both will store prior year returns which, depending on the package you choose, you can access for reminders of what you’ve deducted in the past. They each offer a “Maximum Refund Pledge” that will refund the cost of the product you purchased if another preparer uses the same information and generates a larger refund, but seriously, who’s going to do their taxes twice, just to check?
Backed by Intuit, TurboTax is one of the largest names in online tax preparation software and unlike FreeTax USA it gives you phone access to tax professionals to help you through your filing should you hit a snag. They’ll even spot-check your return
before you file. TurboTax also has the most mind-boggling bevy of packages ranging from “free” to a $129.95 Business Edition. Most users will be well served by the $29.95 Deluxe Edition, plus $36.95 per state filing. The included audit support (via phone or online chat) is a comforting feature.
TaxAct Online offers many of the same perks as TuboTax, but only their audit support seems to be provided by a tax professional. The Ultimate Bundle ($17.95) includes a single state filing, phone; email and audit support, but if you think you’ll want access to a tax professional while you’re working on your returns, stick with TurboTax.
The Nervous Newbie: Those who are considering trying online filing for the first time and break out in a cold sweat at the word audit should consider H&R Block’s $79.95 “Best of Both Worlds” option (state filing is an additional $34.95). It includes their Premium version (good for the self-employed or owners of rental property) and a personalized review of your taxes done by an H&R Block tax professional. You’re matched with a single tax professional for unlimited help & support, instead of sent to a general call-in service, and if you’re audited they’ll provide you with legal representation, a benefit unmatched by other programs. If an error in their calculations results in IRS penalties and/or interest, they’ll foot the bill.