File your taxes electronically for free

No matter what your income for 2008, you can file your taxes for free online. If you make less than $56,000, read the section about Free File, which walks you through each step of the process.

If you make more than $56,000, you want Free File Fillable Forms, which are designed for people who have completed their taxes before and basically know what they are doing.

Here are links to both free e-file programs.

Have you ever used an online tool to file your taxes?

There has always been a debate between using tax software versus an accountant. My dad is an accountant, so I’ve had a pretty sweet set-up where he would do my taxes for me for free (I know I’m lucky!). In my opinion, the main difference between tax software and an accountant is the human touch.

Unlike a good accountant, your tax software can’t offer tips on how to reduce taxes in ways that apply to you.  Your software also can’t answer your year round tax questions. The additional savings that you receive from meeting with an accountant can end up being much more than the price of the consulting an accountant.

There are also benefits to using tax software, though. You will pay less for tax software than for hiring an accountant. The cost for software ranges from free to $120. You can also get your taxes done extremely quickly if you have all of the necessary paperwork. In one hour your taxes are done. Woolah! If you buy good tax software the process can also be very easy. This is especially true of people with few investments and deductions. The software will spell it all out for you and you’ll have no need to meet with an accountant.

I don’t know if it’s because I’ve always been able to rely on my dad, but the idea of doing my taxes alone terrifies me. Even if I used software at home, I’d want to make sure that my Dad was nearby to make sure it all made sense. I think that if your finances are not complicated using tax software may be your best bet. By “not complicated” I mean that If you are employed by one person and have few investments you may be able to save by doing your own taxes. (I’d still want to factor in the stress of doing my taxes before deciding on this option). If you own a business, more than one property or have multiple investments, using an accountant may be worth the cost. What do you think?

Would you rather use tax software or hire an accountant?