What You Need to Know Before Doing Your Taxes Online

Wednesday, February 4th, 2009 at 7:26 pm

What You Need to Know Before Doing Your Taxes Online

(ARA) – The tax code continues to get more complex — with 500 changes to the tax law in 2008 alone. So, if you’re like millions of other Americans, you are looking for help preparing and filing your tax returns. Using online tax preparation and electronic filing services continues to grow at record rates. In fact, nearly 27 million taxpayers e-filed their tax returns from home last year, according to the Internal Revenue Service.

“Online tax prep and e-filing can save you time and money and ensure accuracy. But you need to do your homework first to make sure you are using the program that offers you the greatest value for your dollar,” says Debra Gray, product manager for CCH CompleteTax, an online tax preparation and e-filing service created by the experts in tax law and software.

According to Gray, questions you should look to answer are:

1. Is the site secure?

You want to use an online program that encrypts your data using recognized security standards. Only use e-file programs that have been tested and approved by the IRS. These will display the IRS e-file logo on their home page.

2. Is it easy to use and can you try before you buy?

Online software can save time because you don’t have to download it to your computer. But make sure the program is easy to navigate and presents information clearly. Only choose an online tax program that allows you to try it out before purchase.

3. Does the program check your work?

Make certain the program automatically checks for errors or oversights. The program should provide links to the problems to help you quickly correct potentially costly mistakes.

4. Does it clearly show the cost of preparing and filing your returns?

The cost for using the program should be clearly displayed on the first page so that you can make an informed choice. Caution also needs to be taken to ensure you are selecting a provider that will not try to up-sell you to a more costly version. According to Gray, most do-it-yourself taxpayers should be able to find a good tax program for under $50, including costs for preparing both a federal and state return. Those with simple tax situations should be able to complete both a federal and state return for no more than $30. E-filing your returns should always be free.

5. What are the payment and refund options?

Some programs, like CCH CompleteTax, let you deduct the cost of using their program from your expected tax refund and allow for direct deposit of your refund into your bank account for even faster access.

6. What are the help options?

Ideally the program should be straightforward, allowing you to finish your tax returns on your own. But you will want comprehensive help should you run into a question you can’t answer. So make sure the tax program provides help resources on every page of its program and offers support via e-mail or live online chat.

“Taxpayers who spent hours last year doing their returns using pen and paper or who have been frustrated by the tax software programs they’ve used in the past, really owe it to themselves to take a look at the features available in online tax programs this year,” says Gray. “Using the right tools, you can save time and ensure you’re taking advantage of the right tax breaks to help lower your taxes and potentially increase any refund you are owed.”

More information on online tax preparation and e-filing is available from CCH CompleteTax at www.CompleteTax.com.

Courtesy of ARAcontent