|Online tax preparation is easy,
but is it secure?
But Scott Gulbransen, manager of corporate communication
for TurboTax, says the figures don't mean the same thing to all
taxpayers. "A few years ago we decided to use fewer screens,
but customers complained because we had to put more information
on each screen and they felt overwhelmed with information,"
he says. "So we added in more screens."
The bottom line: Find a site with which you're comfortable.
And find out what guarantees the site makes if there's
a mistake on your return. "In our case, if we were to make
a mistake, we could actually compensate both the interest and penalties
that derived from our mistake," Taluy says.
Is the price is right?
Using an online site also won't bust your piggy bank. Most sites
charge around $20 for basic preparation and filing, generally comparable
to, and sometimes cheaper than, the similar computer software.
And now, thanks to a partnership between the IRS and
commercial tax sites and software companies, many taxpayers may
find they now can file
online for free. Last year, almost 3 million taxpayers took
advantage of the option. Though still far short of the estimated
78 million taxpayers the IRS predicted would be able to use the
service, the agency says this initial foray into expanded online
filing "has surpassed expectations." Some consumer advocates, however,
question whether the process might lead to aggressive marketing
of other financial products to free filers, as well as pose privacy
If you aren't eligible for free e-filing but still
want to do your return online, it pays to shop around. Actual charges
depend on what service you use and what options you pick. In some
cases, upgrades could push your tax prep and filing to near $100
-- and that's on top of anything you might owe the IRS.
Also beware of hidden charges, Rosenberg warns. For
example, find out before you commit whether there are additional
charges for filing your return, in addition to helping you prepare
One of Rosenberg's friends went to a major online
preparation site. The friend used some options and when she clicked
to pay, she found out her bill was $200, not the $17.95 that she
originally had been quoted.
Is online right for you and your return? Ultimately
only you can answer that question. It all depends on what makes
you most comfortable, how much expertise you have, and what your
individual tax situation may be. A taxpayer with a very complicated
tax return may be better off with some personal hand holding instead
of a Web-based solution.
Ironically, even if you decide that online tax prep
isn't for you, your return may still be Web prepared if you use
an outside preparer. Many smaller accounting firms go online to
"rent" the software on a site rather than buy it outright.
Jenny C. McCune is a contributing
editor based in Montana.