Divorced and Doing Your Taxes?

A FREE ALTERNATIVE FROM THE IRS              

Much to the surprise of many people, the IRS actually offers something for free! For someone who has earned $54,000 or less during 2007, the IRS now offers its Free File service. As of January 2008, it allows users to file their federal returns online, via the IRS’ own website (www.irs.gov/efile).            

Using Free File, you can expect to receive your refund within 10 days (using Direct Deposit), and file your taxes anytime (day or night). Plus, you’ll benefit from the automatic accuracy checker built into this online application.            

The Free File service is a bit less user-friendly than TurboTax or TaxCut, and offers far fewer bells and whistles which make the commercial software more intuitive and easy to use. However, Free File does offer a cost-free option for filing your taxes, if you qualify to use the service.      

To E-file or not to E-File, that is the question. If you’re someone who would ordinarily prepare and file your own state and federal tax returns manually, using TurboTax or TaxCut will definitely save you time and probably some money. (You may discover deductions you qualify for that you wouldn’t have otherwise discovered on your own.)           

 If, however, you’re less confident in your number-crunching abilities and you’d prefer to have a professional help you prepare your tax returns, hiring an accountant (CPA), or a tax preparation service, continues to be your most viable option. For the average person, what you’d pay H&R Block to prepare and file your tax returns, for example, won’t be much more than if you’d purchase the H&R Block TaxCut software and do it yourself.            

Both TurboTax and TaxCut are user-friendly programs that offer an intuitive interface. Both require only the most fundamental knowledge of personal finance matters to benefit from using them. The trick, when using either of these programs, is to take your time and utilize the help functions built into either program when you run into questions. Never guess or purposefully input inaccurate financial information when prompted for something you don’t understand.           

Ultimately, using TurboTax or TaxCut, it should take you significantly less time to prepare and file your tax returns than if you were to do it manually. However,  plan on spending at least several hours using either of these programs once you’ve gathered all of the pertinent personal financial data needed to complete your tax returns. Finally, as any competent accountant will tell you, never wait until the last minute to handle this dreaded task.  


Jason R. Rich is the series editor and author of "Entrepreneur Magazine’s Personal Finance Pocket Guides." To learn more, please go to www.JasonRich.com.