Free Online Tax Preparation Software Offers Value, and E-File for Fast Returns

Several free or inexpensive, accurate, and fast methods to get taxes prepared and e-filed are available for purchase or online. There are many tax preparation software programs available for purchase at stores. All of the advertisements from office supply, electronic, and media stores this time of year have full page adds with the popular software packages.

Doing your taxes with the software is convenient and with the E-file option a tax refund is obtained more quickly than sending in taxes by mail. The problem with the tax software is that the packages are becoming a bit pricey for what they offer. They are definitely a better value than going to an accountant. With all of the software available it is almost foolish to not prepare taxes yourself. The Q&A tutorials can walk a complete novice through the tax e-file process.

As a person looking for the best deal and not wanting to sacrifice the rapid refund that comes from E-filing I began to look at alternatives to purchasing software from a store. There are several online tax preparation sites that offer free to inexpensive services. Here is a list of a few.

WWW.TaxAct.com Software use = Free, Federal E-file = Free, State E-file = $13.95

WWW.FreeTaxUSA.com Software use = free for Federal E-file if adjusted gross income is less than $56K. Otherwise Federal E-file is $9.95, State E-file = $9.95

WWW.esmarttax.com Software use = Free, Federal E-file = Free, State E-file = $12.95 WWW.Taxslayer.com Software use = Free, Federal E-file = Free, State E-file = $9.95

TurboTax online offers free preparation and filing for Federal E-file with State E-file offered at $25.95

I personally have used FreeTaxUSA, TaxAct, and Taxslayer. I used TaxAct again this year. For my current situation I found it to be the best value to accomplish my tax preparation goals for the 2008 tax year.

Here's what is offered. Most of the sites offer free preparation of the Federal Tax Return. A few charge for the E-filing. The sites I have used provide free Federal preparation and free Federal E-filing. These are businesses so they do look to make a sale on printed copies, CD copies, or extras. The next sale that they attempt is to allow use of the State Tax Return online software and charge you to E-file. The state e-file charge ranges from $9.95 to $25.95 depending on the choice of software used. My goal was to receive a fast income tax refund. I wanted to e-file both my federal and state tax returns for the least amount of money possible.

By declining all of the up-sell offers for services that are not needed, a person could prepare and e-file federal and state returns for $9.95 using Taxslayer.com. I started down this route. The software was easy to use until I had to stop and come back to the return. It wasn't very user friendly at that point. I elected to use TaxAct.com. The software was easy and allows for a person to pick up where they left off. My federal and state e-file costs using TaxAct.com were $13.95.

Although not a tax professional, I was able to use the software to prepare my own taxes, as well as returns for my brother and sister in-law. I've done six returns with the software and experienced no problems. The refunds came within three weeks with the quickest in eight days.

I found spending 13.95 for online preparation and filing to be a great value. The alternatives are costly accountants or store purchased box software packages with TurboTax and TaxCut being two of the most popular. Spending $59.95 for a deluxe software package that would still require paying for state E-file is not for me. A premium package that would include the state e-file would cost about $89.95. These packages are a good purchase for an individual filing a complex return with multiple stock transactions and a business or two.

I found the free online software to be adequate for moderately complicated returns. My return included income from a home business as well as income from my regular employer. The online software handled it without any issues.

My recommendation for the best value in tax preparation with e-file is to use TaxAct.com if your income is over $56K. If you earn less than $56k, then FreeTaxUSA is a great choice and even better value.