Doing your taxes online: Easy, secure, fast, and cheap
Back in 2001, I stopped using pencil and paper, switched to software for preparing my taxes, and started e-filing. This year, I even ditched the software. All I needed was my browser.
------------------------------------
My taxes are pretty simple. I file a 1040 and itemize my deductions. I have income from only a single employer, I don't have too many complicated investments (just a 401-k through my employer), and my deductions are primarily limited to interest on my mortgage, property taxes of various kinds, and charitable donations to my church and other organizations. In the days of pencil and paper, it took me a full morning, a pot of coffee, and some moderate frustration to do my taxes. Usually, a phone call to the IRS was required to order a form or get some clarification, which could add considerably to the preparation time as I was treated to at least 30 minutes of muzak waiting for someone to help me, then at least a week waiting for the form to arrive in the mail. Finally, everything would arrive, I'd slog through the forms, go down to the store and make photocopies of the finished return, fold everything up and try to jam it into those special envelopes the IRS provides, mail the whole shebang off to Ogden, UT, and usually within 6 weeks I'd get my check in the mail.
I've always planned my withholding fairly carefully each year to minimize my refund. I don't like the idea of Uncle Sam using my money for 12 months, only to give me the excess back without paying interest on it. So for me, a smaller refund is always better. Still, when it does come time for me to collect my refund - even if I've planned it to be only a few hundred bucks - I don't like waiting around for it. So, when I learned that I could e-file and get my return faster, I decided to ditch pencil and paper and go with TurboTax desktop software, That was in 2001, and I've been using it ever since. It manages to catch little mistakes and deductions that I might otherwise miss, and this year allowed me to get at least an additional hundred dollars through deductions and credits that I probably wouldn't have been aware of. Thus, the last five years, the typical tax preparation process involved the following:
- Drive to Staples or Office Depot or Costco and buy a copy of TurboTax
- Load it on my computer
- Do my taxes
- e-files my taxes
- Wait 2-3 weeks
- Get my refund
Total cost was usually about $30 for the software plus $14.95 to e-file (I live in a state without income tax so I only have to file a Federal return). However, I realized somewhere along the line that buying the software was sort of pointless since I use it once, generate my return, and then never use it again. As long as I can print out a copy of my return and save it as a PDF, it suffices for my archives.
So this year, I decided what the heck - I'll dispense with the software altogether and do the whole thing online at turbotax.com. It looks and feels almost exactly like the desktop version of the software. You can pause and save your work, returning later via password to finish your return. You can e-file your return, of course, but you can also save it as a PDF file, so it can easily be accessed and printed later. In all, I found that it was just like using the version that comes in a box on a disc, but with one big difference: it was cheaper. The price was $14.95 and that includes the e-filing fee. In other words, I saved about $30 because I didn't have to buy a piece of software that I'll use only once.
Would I recommend it? Absolutely. It took me about two hours to do my taxes, it cost me $14.95, and my refund was electronically deposited to my checking account 13 days later. That's fast. Come to think of it, I think I've sometimes waited in line at the DMV longer than 13 days. I didn't have to sharpen a single pencil. The only CD I used was the one to burn a backup of everthing and throw it in a little mylar pouch along with my W-2 slips and some other hardcopies of donation receipts and IRS forms. And since everyone I have found charges at least $14.95 to e-file, the price at turbotax online is about as good as it gets. Bottom line: It doesn't get much faster, cheaper, or easier. In fact, I think it was actually more work back when I was a teenager making barely above minimum wage and filing my taxes by hand using a 1040 short form. It certainly took more stamps and I had to wait longer for my refund.
No, taxes are never fun. But I think I've finally found a way to make filing my return reasonably painless. If you've been thinking about taking the plunge and doing the whole thing online, I can tell you that my experience with nothing but the net was nothing but positive.
