Updated: May 3, 2013 12:14PM
Originally published: February 17, 2002
In the coming months Americans will file 120 million tax returns--a national nightmare and, for many, a personal trauma. About 30 million of those returns--both long and short form--will be created by people who simply sit down with the tax forms, the IRS booklets, and a calculator to figure out the best and most correct answers.
Those tax returns will be filled with mathematical errors, and are bound to overlook some deductions or changes in the tax law. For some people, these errors will result in a higher tax bill or cut into their tax-refund checks. But determined do-it-yourself tax preparers can avoid all those hassles, simply by preparing their returns on their home computers--and getting the help of a simple and inexpensive program such as TurboTax from Quicken.com or Tax Cut from H&R Block.
Do-it-yourself pays for itself
If you’re brave enough to do your own tax return, certainly you should be brave enough to create it using your computer. The TurboTax software program costs $29.95, while Tax Cut retails for $24.95, and the odds are they will save you at least the cost, not to mention the emotional costs. And it’s deductible!
TurboTax is the best-selling tax preparation product for a reason: It uses an interview process to guide you through the process. It knows the questions to ask, and from your answers it suggests deductions you can take. This personalization removes the need for you to search through tax forms and booklets, wondering if this issue or that one applies to your return.
It’s estimated that more than 15 million returns were filed last year using TurboTax--and that doesn’t count the millions of returns created by tax preparers using a professional version of this software. Of those, about 5 million actually filed their returns electronically, while the others printed out the forms, signed and mailed them.
Why should you join them this year? Here the top 10 reasons to create and file your tax return using your computer.
1. The tax law changed. You want your full share of deductions.
2. It’s faster. It cuts tax preparation time in half, say the TurboTax people.
3. It’s easier. It guides you through the process, just like an accountant would.
4. It’s more accurate. Computers don’t make subtraction errors.
5. It’s less expensive. Professional tax preparation could cost double the $19.95 basic software cost.
6. It’s complete. You don’t have to go to the post office to pick up forms. (State forms are available at an extra charge, or you get one state form free if you buy TurboTax Deluxe for $39.95.)
7. It’s neater. The IRS likes neat returns!
8. You get your tax refund sooner--especially if you file electronically (10 days vs. eight weeks for paper filings.)
9. It reduces your chance of an audit. The software flags possible audit risks as you complete your return.
10. It helps with future returns. The new tax law phases in over the next 10 years, so you need to plan ahead. And this program will do that.
Once you complete your return, you’ll have two choices. You can print it out and mail it in. Or with a click of your mouse, you can actually file electronically at no extra charge. If you owe money on your taxes, you can file early electronically, but wait until April 15 to send your check. That’s a simple process: You’ll print out a small voucher form that’s part of the software to sent to the IRS with your check.
Create a return online for no charge
In fact, if you really want to be in the forefront of electronic tax filing, you don’t need to buy the software. You can simply go online to www.TurboTax.com and create your return online (security highly guaranteed). Then you can either download or file electronically for $19.95 for the federal return, plus $10.95 for your state return if you file before April 1.
Tax time is coming. Tax returns are inevitable. Using your computer makes it easier. And that’s the Savage Truth!
Terry Savage is a registered investment adviser and is on the board of directors of McDonald’s Corp. and Pennzoil-Quaker State Co. Send questions via e-mail to firstname.lastname@example.org. She appears weekly on WMAQ-Channel 5’s 4:30 p.m. newscast.