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  •   Deductive Logic
    By Alan S. Kay
    Special to The Washington Post
    March 26, 1999

    Is there a task more burdensome than doing your taxes? That's why we've cheered the evolution of tax preparation software.

    But using software still means going to the computer store or enduring a long download, and it means paying the equivalent of a nice meal or two for a package you'll use only once (we hope). Surely, in these days of Web-based everything, you can dial up a site, plug in your numbers, and hit the send button to file it, can't you?

    Well, you can, but be warned: This means working out on the leading edge, where things can go wrong. Do you really want to treat your tax return like a beta test?

    FileSafe: As with all the sites we list here, you must register for free access. To file your return electronically and print a copy, though, you'll need to pay $14.95 by credit card. Rather than hide the tax forms behind a question-and-answer user interface, this system lets you directly fill in the forms you need. Calculation is automatic, and each form is tested for errors as you complete it. The site works well (aside from halting us for a day with an enigmatic error message); our moderately complex federal return took about an hour. FileSafe doesn't offer state returns. Now in its third year, this site also offers free preparation and charges $14 for electronic filing of the basic return, plus $3 per additional form used. It's a limited site, though; we weren't able to create a Schedule C to record rental income, for example, and you're required to choose which forms to use, something tax novices will find difficult. The forms here also are unforgiving – enter a punctuation mark in the wrong place and you'll get an error message. Recording a W-2 is a seemingly endless process. We did get a return prepared, minus the Schedule C information, in 25 minutes, though. State returns aren't available. This site uses the interview technique: your answers to a long series of questions fill in the return. Unfortunately, the on-screen questionnaires are visually as dull and fussy as IRS forms. A wayward period or comma earns you a snippy error box. Navigation among the input screens and forms is also a bit challenging. It took us an hour and 20 minutes to prepare both federal and D.C. returns; filing both electronically costs $14.95.

    WebTurboTax: This Intuit-owned site is the slickest – and most costly – of the bunch. It also took the longest, requiring almost two hours of our time. But WebTurboTax comes closest to working like traditional software. Its format is totally question-and-answer; you fill in the forms for free but can't access them until you pay your fee ($19.95 each for federal and state returns). It can import data from your Quicken file and offers lots of information and customized help. Be careful, though – a single incorrect answer might force you to start over from scratch.

    Storing sensitive financial data on someone else's server involves a certain degree of trust, and if that's not for you, other computer-based options are available. Two sites we found, 2nd Story Software's TaxAct and ElectroTax, allow you to download software to your computer for free, prepare your return, and then file it electronically through their sites. And major packages such as Intuit's TurboTax and Kiplinger's TaxCut (published by an H&R Block company) are available both in stores and online.

    © Copyright 1999 The Washington Post Company

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