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Question:


I plan to file my own taxes this year instead of paying a tax preparer. Where do I begin? Any preferred website or tax preparation software?
-KhalidQ


Answer:


The place to begin is the drawer where, if you're like many taxpayers, you have accumulated dozens of scraps of paper throughout the year - pay stubs, banks statements, credit card slips and other receipts, forms like W2s and 1099s that your employer, bank or brokerage firm sent you. Gather all the confetti together and organize it into two big piles, one for income and one for what you hope are deductible expenses. If your income consists of your salary and little else and you take the standardized deduction, then you probably don't need outside help, either a software program or a flesh-and-blood accountant, to fill in the forms. On the other hand, if your affairs are that simple, you might as well use TurboTax or one of the other popular programs because the barebones editions are typically free.
 
If your finances are more complex, especially if you have business income and expenses, then tax software will cost you, but you could find it money well spent. The price tag for programs for federal taxes tends to be in the range of $25 to $75, depending on the frills, and the ones covering state taxes run about $25 or $30. That's not much if you divide it over the number of hours you're likely to save by using the software instead of backs of envelopes and a hand calculator, plus the programs are good at finding deductions that you might not have thought of, and they are updated with the latest changes to the tax code. As for which one to buy, TurboTax gets high marks from reviewers for adept use of social networking; you can throw particularly thorny tax questions out to the company's online community. One point in favor of H&R Block's program is that, old-school style, it allows free access to the living, breathing tax experts that work in the company's offices.
-Conrad de Aenlle



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