The Best Way to File Your Return

Free, fast and accurate

By Kaye A. Thomas
Posted February 29, 2008

The way to go unless you need professional help.

Some people need professional help with their tax returns. Yet despite all the talk about complexity, most of us can still do our own with a little patience. It helps to use software that guides you through the process, speeds the preparation of forms and eliminates the possibility of arithmetic errors. It helps even more if you can do this online and transmit the form electronically, or "e-file" as the IRS says.

Because of an offer from TaxACT, one of the leading providers of tax software, you can prepare and file your federal income tax return online free of charge.

Software softens the blow

Few people enjoy preparing income tax returns, but good tax software makes the process a lot less painful. All the leading providers offer programs that take you through an "interview" where they gather basic information and then ask questions that determine your income, deductions and credits. The programs are smart enough to ask for more detail when your answers indicate the need, but skip ahead when it's clear a particular type of income doesn't apply to you. They're thorough enough to gather all the necessary information without making you answer a lot of unnecessary questions. It's a lot like sitting down with a smart, well organized tax professional, but without chitchat about how bad the weather's been lately.

In my judgment there is no significant difference in quality among the three leading providers: TurboTax, TaxCut, and TaxACT. There's a difference in price, though: TaxACT offers a version that can be used even for complicated returns, free of charge.

Online versions

You can still buy shrink-wrapped tax software packages that allow you to prepare a tax return without an Internet connection. Nowadays, though, all the major providers offer an online version. Just use an Internet browser — the same one you're using to read this page. You'll go through the same friendly interview process and arrive at the same result without having to load software on your computer. When you're done you can print the return and mail it in or, better still, zap it directly to the IRS over the Internet.

Some people worry that using the Internet involves risk that their information will fall into the wrong hands. Yes, the risk is there, but it's probably smaller than the risk you take when you file a paper return (those can get lost or stolen) or have a tax professional handle your return. It's similar to the issue you face in using a charge card. Online shopping isn't risk free, but it's probably safer at this point than handing your charge card to a sales clerk in a store.

If you still don't like the idea of preparing your return online, you can download a fully functional tax preparation program from TaxACT entirely free of charge and use it offline to prepare your return.

Free deals

There are several ways to prepare and file your returns free of charge, but the TaxACT offer is superior to the others.

The Free File program offered by the IRS is intentionally designed to be inconvenient and limited in scope, as a way to protect the revenues of tax software companies. Services offered through that program don't provide any assurance of correctness: IRS doesn't test the software offered through the program or otherwise provide any special blessing for the service.
Industry leader Intuit offers a free edition of TurboTax Online, but only for Form 1040EZ and "simple returns." If you need an upgrade you'll pay at least $29.95.
TaxACT isn't as well known as TurboTax but they've been at this a long time and offer a first rate product. Their free offering prepares all the same forms as their deluxe product, so you won't be forced to upgrade in order to complete your tax return. The deluxe version adds helpful features for only $9.95. State filing is available as well at a reasonable added cost.

It's fair for us to disclose that we receive consideration from TaxACT for advertising their products. We agreed to accept their ads, though, only after determining they are offering a high quality service free of charge, with no strings attached. Their offering is the best deal around.