'Consumer Reports' Offers Tips For Doing Taxes Online
Tax day is looming and taxpayers are scrambling to gather receipts, W-2 forms and other documents. For many, gone are the days of paper ledger books and calculators, now that there's software to figure out how much they owe.
Tobie Stanger, a senior editor at Consumer Reports, tells NPR's Renee Montagne that when — sometimes free — online programs and smartphone apps are available, they're worth a try. "People should take advantage of it and not be afraid to try doing it yourself because you could save yourself $200 [to] $600," she says.
Stanger says Consumer Reports hasn't tested every software program and app out there, but many of them make tax preparation easier and more efficient.
Consumer Reports lists these few things to look for when preparing taxes online:
- Investigate what documents the website supports.
- Make sure the site can handle your state taxes.
- Check out the complaints the site may have.
- Don't get sucked into floating pop-ups.
- Think about the cost.
Here are edited highlights of the interview with Stanger:
On available digital tools
If you expect to have an adjusted gross income of $57,000 or less, the easiest thing to do is use the IRS website — they have a section called Free File. You can prepare and file your federal income taxes for free with one of 15 companies that have signed up with Free File. If you think you're going to have an adjusted gross income that's greater than that, you can use the search engine, type in tax preparation and a number of names should come up. One that everybody might know is TurboTax. H&R Block has its own online version, and TaxAct is a good one because everybody can file their federal return for free.
On the best and most helpful software
There are charitable deduction trackers like ItsDeductible. It works with TurboTax but you can also use it online even if you don't use TurboTax. If you have receipts throughout the year there's something called Shoeboxed. You actually send the company your receipts and they scan the documents for you and upload it. Then, you can then download it to your tax software or use it however you want.
On online identity theft
[Tax software developers] say they use bank-level security encryption. If you're comfortable with online banking, you can be comfortable filing your taxes online. If you find that you have trouble getting your refund because the IRS tells you somebody else took it, you should definitely contact the IRS right away.
On smartphone apps
There are apps to file 1040EZ — which is a very simple form — through TurboTax or H&R Block At Home. You photograph your W-2 form with your smartphone and it will import your information directly into your 1040EZ; it goes into your return and then you're able to file it directly from your smartphone or you can go online and do it.