Someday our grandchildren may be amazed to learn how Americans used to prepare their taxes.
They may have a hard time believing that anxious citizens paid hundreds of dollars to rumple-suited tax wizards who waved #2 pencils over arcane formulas and tax charts to navigate the Byzantine maze of IRS codes, loopholes and laws.
Technology and an abundant flow of information have taken the mystery out of the stressful annual task. Taxpayers now have several inexpensive alternatives including a host of Web sites, low-priced software and other services to get help with even the most complicated returns.
A quick jaunt around the World Wide Web reveals a multitude of sites that help taxpayers prepare and electronically file their 1999 tax returns without breaking the bank. These sites include www.e1040.com, www.fileyourtaxes.com and www.completetax.com, all of which advertise speed, ease and accuracy.
However, not all online sites are equal.
Some sites offer little more than a 1040 form on a computer screen, while others, such as www.preptax.com, provide free access to all forms, assistance while preparing the forms and general money-saving tips. The site will even crunch numbers and let users know if something doesn't add up.
Online tax sites charge a minimal fee, usually between $7.95 to $14.95, depending on whether you choose to print out the completed forms, or electronically file the tax return through the IRS's "e-file" program.
But online sites tend to offer almost no personal assistance, and tax consultants warn that just because you used an Internet preparation service, the IRS still will come knocking if mistakes are made.
Consultants advise those using online options to print out all forms. And those who have access to a financial professional, such as a certified financial planner, should try to have their taxes checked before hitting the "send' button.
While you save the hefty fee of paying a preparer to fill in the tedious boxes on your 1040, a professional can make sure the form is filled out to your best advantage, a human touch lacking from Web sites.
"The tax laws are just too convoluted," said Dennis Filangeri, a certified financial consultant in Metairae, La. "You may want to take it to a financial professional, just as a sounding board and to make sure you have covered all your bases."
Software - Tried and True
But it's not just a lack of personalized service that makes online services a little shaky. Many tax Web sites subject users to slow download times, annoying computer freezes and regardless of constant assurances from the companies, a lingering paranoia about sending personal financial information over the Web.
For those who want more bang for their tax preparation buck, but still not go into debt hiring a traditional accountant, several software packages are now on the market that help taxpayers through the IRS-induced maze.
Old standbys like Quicken's TurboTax and H&R; Block's Kiplinger TaxCut are complete, easy-to-use software packages that include an in-depth question-and-answer section to elicit all necessary financial information.
The programs offer expanded explanations of recent tax changes and a step-by-step guide to more difficult aspects of the dreaded annual task.
Intuitís TurboTax CD-Rom costs anywhere from $19.95 to $29.95, with a deluxe version ranging from $29.95 to $49.95. Both include step-by-step guides to prepare taxes, check for errors, and suggest overlooked
deductions. The deluxe version comes with additional bells and whistles, such as IRS tips, advice from Money magazine and other financial advisors, as well as a Roth IRA planner.
Kiplinger TaxCut can be found for as low as $14.95, with a deluxe version
retailing at $39.95. Both will guide users through their forms, crunch numbers and check for deductions. The deluxe version throws in free state tax preparation, provides video tips from tax
professionals, and offers what the company calls "a complete tax and
financial planning library."
The companies also offer online preparation and e-filing at their Web sites.
www.turbotax.com offers free online preparation for 1040EZ filers, and filers with adjusted gross income under $20,000. All other forms are $9.95, unless you have an account with Vanguard, Fidelity or E*Trade, in which case the service is free.
www.taxcut.com offers federal tax filing online for $9.95, but again, without the attention or detail available in the company's software package.
Come One, Come All
But the best deal may be one offered by the Texas-based money management boutique H.D. Vest.
The company is providing free online tax preparation at their Web site, www.hdvest.com, for anyone who asks, regardless of the filer's income or how complicated the return gets.
The company's Web site guides users through the tax preparation process, and will file returns electronically.
The catch? Those who need more advice than the program can support are directed to one of the company's tax professionals. That costs money. And giving financial information to the company allows them to send taxpayers a tailor-made pitch to convince them to buy their investment advice and money management services.
But that may be a small price to pay. You've mastered the dreaded 1040. Now it may be time to conquer new financial horizons.