There are many software packages out there that allow you to do your own taxes, however when it comes to tax preparation, you want the best. PC Magazine has given TurboTax the highest ranking for desktop software. TurboTax has been around for many years, and is easy to use. It walks you through interview questions to capture all your data, then files your return electronically with the federal government. Some versions of TurboTax include state tax filing, so be sure to check before you buy. If you are filing basic Maryland taxes, I recommend saving the extra money, and filing using the Maryland Comptroller’s Office i-file system. If however, you have a more complex tax situation, or have out of state filing, you should consider purchasing the state version.
As with financial management programs, internet based tax filing services are offered by companies like H&R Block, TurboTax, and even Certified Public Accountants (CPA) offices, just to name a few. All of these programs offer a wide variety of services. The fees are very similar for all the services, and your particular situation will determine the cost. The good news is that most people with straightforward basic tax filing will be able to use the online services for free. All of them use interview based questioning to collect data, and have tax help functions. No matter what service you choose, I recommend sticking with it and using the same one every year, so that the service transfers the previous year’s data to the new year.
One great filing option, is to use online programs hosted by a CPA’s office. The biggest perk, is that when using their services, most CPAs will answer your basic questions for free if the software does not, and will generally provide discounted rates if you need assistance with more complex problems. For example, a CPA friend of mine has a website called Diytaxesmadeeasy.com, that uses internet based software by Drake. She and most other services guarantee the results, and will represent you in the event of an audit. Even if you don’t have a complex tax situation now, there’s a good chance you may have one if the future. If you have used a CPA based program, you will have developed a relationship with a CPA, who can be better prepared to help you, should your tax situation change in the future.
A really great suggestion I received from a friend, was that no matter how you do your taxes, you should seriously consider scanning all your documentation and putting it in the cloud, on a flash drive, or on a CD. The Internal Revenue Service (IRS) will allow you to preserve copies of your documentation electronically, so you don’t have to maintain all the paper files. Storing your documents electronically is also a great way to make sure you don’t lose documents. I personally use a desktop scanner to scan and organize our files. You can also use a note taking program like Microsoft OneNote to do the same thing.
No matter how you choose to do your own taxes, it is definitely much easier today than when you had to make a trip to the public library to pick up the forms you needed and the instruction manual, and hope you got the right ones on the first try. Then you had to fill all the forms out, and do all the math to make sure your calculations were right. I’m definitely grateful for today’s options, and I personally don’t ever care to go back to that era of doing taxes.