KELLNER: Two extra days for tax prep, but time to get serious

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Procrastinators across the land get a break this year: Tax filing day is April 17. It’s normally the 15th, but that falls on a Sunday this year. The next day is Emancipation Day in the District of Columbia and Patriots’ Day in Massachusetts. So, we all get 48 more hours to sweat over our returns.

Or not - if you’re using online tax-preparation services such as Intuit’s TurboTax or H&R Block At Home. Boxed versions of each firm’s tax software are available at office-supply stores and many warehouse club stores, but I’m told that doing this online is far more popular.

Although a number of providers are out there, I’ve returned this year to two favorites: the Block firm and TurboTax. These two are arguably the industry leaders, and with good reason. Each has a long history in the field, each is a respected brand name, and each has such a large user base that the providers do a lot of research and development each year to make things work well.

Both companies will charge equal amounts for your returns: $49.95 for their “deluxe” products - aimed at users who need more than a simplified 1040 form, but don’t have rental properties or are solely self-employed, and an extra $39.95 to prepare and file a state tax return. I wish the latter price were lower at either TurboTax or Block, since almost all of the information used in a state return is entered in the preparation process for the federal return. But even at a total of $90, that is generally less than you would pay walking into an accountant’s office, and whatever you spend is deductible on next year’s return.

The big advance this year is for those with very simple tax needs: Both Block and TurboTax will give you an app for your smartphone that will allow you to take a picture of your W-2 form, enter some additional data and - presto - have a federal tax return ready to file electronically, free of charge. The state returns are extra, usually about $30.

Now, this is for people who normally would file the basic 1040-EZ form, which omits most of us earning above a certain level, who have children, are homeowners or itemize deductions. That group is in the “you get to pay for all of this” category.

Both the TurboTax and Block online versions work in an interview format. You fill in information, answer questions - “Did you buy a home last year?” - add numbers and come up with an expected refund (or payment). Both firms’ systems are easy to follow and are difficult to mess up. Up until the moment you click to file, both systems are rather forgiving and let you retrace your steps to change things and correct mistakes.

Both also will examine your return for potential audit problems and offer advice on how to handle things. H&R Block offers a “live” service that allows you and a preparer to work together online; TurboTax has people online to help, too.

With both services rather equally matched, what’s a user to do? In this case, I really believe it boils down to which firm you’re most comfortable with, and if you’ve had positive experiences with one, you’re likely to return. I’m leaning toward TurboTax this year because it has given me good service in most years. But H&R Block’s offering is also appealing and is certainly worth investigating, especially if you are new to the online tax-preparation scene.

One word of advice, no matter which you use: Be sure to password-protect your files as much as possible. Income-tax returns contain enough data for an identity thief to practically clean you out before you even know it. If there is any situation where safeguarding data is crucial, this is it.

Mark Kellner can be reached by email at mkellner@washingtontimes.com.

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