Updated: May 3, 2013 12:14PM
Originally published: January 27, 2005
Tax time is always tough, but this year there’s something new. It’s quick, easy, and free tax help filing for those who file the short forms, either 1040A or 1040EZ.
More than 54 million people file the short form each year, but no matter what the IRS calls it, the short form isn’t easy. In fact, the one-page 1040EZ form has 32 pages of instructions, and the 1040A packet comes with 64 pages of “help.” That’s why people pay professionals up to $120 to prepare these “short” returns.
The short forms were designed for those in a low-paying job, young workers just starting out, part-time employees or retirees -- taxpayers who typically have lower incomes and fewer deductions. Yet most people don’t realize that they could have income up to $100,000 and still qualify to file 1040A because they have only the limited allowable deductions.
Now you can find out whether you qualify for the short form, and get free help in filing. Using the expertise that has made TurboTax the most popular computerized tax preparation service with more than 10 million users annually, its parent company, Intuit, has decided to offer free help to the millions who file these supposedly simple shorter returns.
New view of the short form
Just go online to www.Snap Tax.com and you’ll be greeted with a new view of the IRS short tax forms. You enter your information into the spaces on the form at this secure site, but the data is saved to your own computer. So you maintain complete control and privacy for your information.
SnapTax will walk you step by step through the lines on the tax form, but without all the intimidating jargon. Just enter your name, address, Social Security number as prompted. And then you’ll be prompted to enter income and deductions.
If you start entering deductions that are not allowed on the short forms, you’ll be notified that you need to file the traditional 1040.
You don’t have to do any calculations, but a sidebar pops up to show you exactly what SnapTax is adding and subtracting. It will prompt you to take appropriate deductions and credits, including tuition payments, childcare credits and the earned income credit.
Within minutes, your form is filled out, showing whether you are entitled to a refund or must send a check to the IRS. While the IRS estimates people spend from one to three hours filling out form 1040EZ, you’ll be done in less than half an hour with this free online service.
Then you have two choices. Push “print,” and it will create the completed IRS form, ready for you to sign, attach your check and mail to the IRS. Or you can click on “file electronically,” and for a $5.95 fee charged to your credit card, you can securely e-file the return to the IRS. You also can print out a copy for your own records.
If you’re owed a refund, it will be paid quickly if you e-file -- far more quickly than with a paper return. If you owe taxes, your e-filing can authorize the IRS to deduct the money from your checking account on a specific date in the future, such as April 15.
If you’ve decided to e-file, you’ll be asked for an e-mail address, and you’ll be notified within 48 hours that the IRS received your return.
SnapTax.com keeps your personal information on a server only if you elect to e-file your return. And electronic tax filing is the most secure online service, using a dedicated line to the IRS.
Upper-income taxpayers have always had the advantage of professional help and computerized tax preparation. But the vast majority of lower-income wage earners have had to struggle with their paper returns, and worry about making errors in both filing and calculations -- or pay fees to have someone else do it. SnapTax.com is a revolutionary tool.
Why the favor?
Why would a company like Intuit, maker of TurboTax, decide to give away basic tax preparation services online for free?
Maybe the top executives feel sorry for all of the people who struggle at tax-time each year.
The better answer is that many of those people who qualify to file for free will ultimately become paying customers of TurboTax, which costs $29.95 for the software to file both a 1040 federal and a state tax return.
In the meantime, short-formers can save time and money -- and file with confidence this tax season. And that’s The Savage Truth.
Terry Savage is a registered investment adviser, and appears weekly on WMAQ-Channel 5’s newscasts. Distributed by Creators Syndicate.