In all cases, however, I have filed directly online for my state income taxes, since they tend to ask for entries from the lines on the federal return.

I see no reason to give any third party my name, my Social Security number, the name of my employer, my address, my phone number, my occupation, and of course my income and deductions.

I did go to H&R Block a few years ago when I had an unusual tax year, but I ended up feeling ripped off. I went in there with what I thought was the correct form from research I did on the IRS.gov website. When I told the rep that I was not sure about it, it was obvious she was not either, but she basically said “this looks right,” and after paying H&R Block’s $150 tax preparation charge versus the $22 I usually pay for the state e-file, I thought I’ll just do it myself from now on.

Another time I filed state along with federal, and thought the state would draft what I owed out of my checking account. However, the state could only deposit a refund. They didn’t have the capability to take money out and that wasn’t mentioned anywhere on the site. I received a notice from the state months later asking for my payment along with a late charge. I called and explained how I misunderstood and the fee was waived. After that I decided no more and I’ve snail-mailed it ever since. I don’t get refunds so I don’t care how long it takes my return to be processed. It’s a little more inconvenient now that the IRS doesn’t mail booklets anymore, but I strangely feel more secure doing it this way than online.

BTW, the link J.D. gave to states with free e-file left out California! I have e-filed free with CA for the past few years…just have to do it through the Franchise Tax Board website (ftb.ca.gov).

A word of caution: The tax code complexity has increased significantly in recent years, and in previous years the FreeFile programs seemed to do a better job of walking you through step-by-step. This year’s TurboTax version seems less interactive, and I would recommend it only for those who are tax savvy, otherwise you may miss out on deserved deductions/credits. I have not yet checked out TaxAct but will check it out along with other “brand name” vendors. I’m skittish about vendors protecting my private info, so I only go with the “brand names”.

I agree with Mike B. above–it’s always been worth it to me to pay a little bit for a computer program to save me the time in tracking down the right forms. Even with a home business and itemizing, it’s been accurate and quick.

The last few years, I’ve been using free online services. Taxact is the most aggregious of them, but all of the major free filing services will attempt at several points to get you to upgrade to a paid version.

As far as state income tax, I let the website figure out the amounts, and then I just fill out the forms myself. The Colorado return is pretty simple and can be filed online for free for all returns (although there is a credit-card processing fee if you pay a tax bill online.

One thing I would recommend for those nervous about using a free service to do their taxes, run it through a couple different ones to make sure you get the same numbers. This year, I prepared through TaxAct, H&R Block, and FreeTaxUSA

@Kate, Taxact lets you pay for free each year? I couldn’t use them last year, because I did the free return the previous year and wasn’t given the option of the free filing, it wanted to force me into Deluxe.

Really all most of my taxes are involve gathering up the various documents I get mailed and tallying them up to drop in the appropriate 1040 boxes. Also I find it pretty hard to ‘miss’ tax deductions if you just read down line by line since it pretty much goes over any and every possible tax deduction (from retirement contributions to several farmer only deductions, it’s all there). Only took about two hours (once all my forms were in front of me) of easy if somewhat boring or meticulous work.

Maybe if I had stock trades in more than the single digits, I’d want to hire someone if only to eliminate the drudgery of entering numbers on forms so many times.

Interesting note: Taxes are based on a table that step in increments of $50, so if your AGI is close to one of those levels, sticking an extra few bucks in a retirement account (or donating them if before the end of the year) could end up taking more off your taxes than you’re putting in.

I can see the advantage where you have a huge number of transactions and you just don’t want to deal with them. But I wouldn’t think that’s most of the population….

A computer program, like any good software, is useful automation for filling out very tedious forms, looking things up on tables, doing the calculations. Saves me enough time to be worth the $25 it costs.

Used Free File in college; I make too much now.

I immediately hired a tax guy (a recommendation from a friend) who resolved the $9,000 bill and turned it into a $9 refund.

Guess who will be doing my taxes this year?
Hint: not me. Not even for free.

I use the free version of Turbo Tax. My state has a free-file option through Turbo Tax for my income level, which is nice. For a few years, I managed to have W2s from more than one state each year, and Turbo Tax has done really well with helping me figure out exactly how much to pay. I’ve used Turbo Tax for 3 years, free file each time, and have been really pleased with my results.

Some people feel comfortable preparing their own tax returns, some don’t and thus look for professional help. Taxes are one of the biggest personal expenses we have, sometimes it makes sense to pay a pro to help reduce that expense.

Disclosure – I’m a CPA.

I’ve used free file before. Usually you get to file the federal tax for free electronically, and then they try to stick you with a $15.99 charge to electronically file your state taxes. Since its already calculated for you, most people just pay the money and off it goes, taxes done.

Free file worked fine for me, but my taxes were fairly straightforward. Last year I couldnt file electronically because of the homebuyer tax credit, and had to fill out tons of paperwork myself and mail it in.

That being said, however, there are a couple of occasions where it would be extremely wise to explore the accountant option:

1) You have a complex or uncommon tax situation. If you’ve got three LLC’s, two partnerships, 4 S corps, all of which are funneling money and real estate to each other… time to explore the accountant option. Accountants have the resources to continually keep up on new tax law (which doesn’t come out just once a year like tax software does). Tax law, and especially tax law regarding complex situations, is continually amended and modified. If you suspect these changes may affect you, I would definitely recommend thinking about an accountant.

2) You need tax help outside of tax season. If you have tax questions that arise in October or you need additional accounting or bookkeeping services (e.g. you own a home business and don’t know and/or care to bother with the books), you can’t ask the software box what to do. A CPA can be extremely helpful in getting everything in order, particularly in knowing which documents you will or will not need come tax time. If you have an accountant handling all of your financial documents throughout the year, tax time will be a very smooth ride.

We did a simple return and took the standard deduction, It was way quicker than doing the numbers on paper, which is always a nightmare because of the little boxes and where you’re supposed to fill them and you check and recheck and oh, surprise, you made a mistake and have to start with a clean form. Doesn’t happen here.

This is the first time in AGES that I don’t a) file on April 15 at 11:55pm, b) request an extension, c) spend money stupidly on a tax preparer using a computer program. I love it!

So I highly recommend it! If I wasn’t eligible for free file I’d probably go with Turbo Tax paid version. They seem to be great at doing all the work for you, including keeping up with State laws. And for Mint/Quickbooks users, it seems to be all integrated as well.