Yes, it’s tax time. In the past couple of weeks, you probably have been receiving the various forms you will need to file your taxes. By law, everything should be mailed out by January 31, 2009, including your W2. Most people usually dread filing taxes and wait to the last minute. I personally enjoy it. There are so many resources out there to help you file your taxes, and if you do it electronically and use the direct deposit option, you can receive your refund from the IRS within 8 to 15 days. No longer do you have to wait for a paper check in the mail. I have used the following two websites to file my taxes, they are very helpful and make the process relatively painless. My taxes are already filed and I have also received part of my refund, more on that later. I also use the Illinois Department of Revenue site to file directly with them, and I have already received my Illinois refund as well. There are many places online that you can use, but I have actually used these two websites myself.

Turbotax.com This is by far my favorite and I have recommended it to many people. Years ago, I would purchase the actual software from year to year, but now everything is online. You can even view previous year’s tax returns, if you used Turbo Tax to file them. This is the easiest to use. To begin you go through an interview process that asks questions like did you change jobs, did you contribute to your 401K, did you sell property? (all example questions are not verbatim). When you answer the questions, the info is then put where it needs to go on your tax form. It also helps with any forms that you might have received in the mail. For example the bank sends a 1099-INT form of any interest you earned. Turbo Tax will ask you, did you receive interest, as reported on form 1099-INT? One year I did a person’s taxes for them using Turbo tax and they had a form for their contributions to their 401K. I would have never known where to put that on the tax form. But Turbo Tax asked about it, referring to the form number it was reported on, and then they take you step-by-step in where to put the information. This increased this persons refund by $400. They now use Turbo Tax themselves every year.

Turbo Tax can also file your state returns as well. My favorite part of Turbo Tax is the little box it has at the top of the screen that shows your refund amount in green and your payment amount in red. As you enter numbers in, it will scroll up or down and then stop at the amount of your refund/payment. It’s so exciting to see those green numbers going up and up. Cha-Ching!! At the end, Turbo Tax checks your return and sees that there is nothing that the IRS will question and gives you and opportunity to make changes. They also have a program that maximizes your deductions; it looks for all possible deductions for you. It is a very thorough program. Also another advantage is, you can literally complete your whole tax return for free to see if you will receive a refund or have to pay. You do not pay for the use of this program until you are ready to file your return. You also have the choice of paying by debit card, or you can have your fee deducted from your refund check. This involves a third party bank, where your IRS refund is sent to the bank, and then they deduct any fees due, and then they deposit the balance of your refund into your checking or savings account. I have also used this option without any problems.

You also have the option of printing out the forms and mailing them in, or filing electronically where you can have a check sent to you or have it direct deposited into your checking or savings account. Like I said earlier, doing it electronically will have your refund to you within 8 to 15 days directly from the IRS. I have always done it this way without any problems, and it usually takes about 14 days to be deposited.

Using Turbo Tax is really the best way to file your taxes, especially if you just file the standard return. But I have also used it when we had a home business, and it walks you through everything and has a lot of help topics as you go along. After using this program for a couple of years, I did go to a place to have them done, I don’t remember the circumstances why, but I realized that I could of done them myself, it’s like the same program that the tax preparation places use. **BUT…these programs do not replace the advice you can receive from a tax professional. If you are in doubt or have any questions, please consult with a tax professional.

One year I waited to the last day to file, close to midnight, and it took a little longer to download all the info, but it was still filed on time. I think this was back when everyone was still using dial-up. But I have not had any problems using this program. I showed my dad how to use it one year and he now uses it every year. I also told a friend of mine about it, because she also put it off to the last minute, and she couldn’t say enough about it. They also have other services you can pay for such as Audit Defense, where they will assist you if you get audited. You can also have a professional review your return to get you your biggest refund. They have different editions of the program to use for your different needs, and they vary in price. There is a free edition for filing simple returns and the 1040EZ. Use the Deluxe program to maximize your deductions, Premier for investments and rental property, Home & Business for personal and business filing in one or the Business program for Corporations, Partnerships and LLCs.

Rapidtax.com  This is the website that I used this year to file my taxes. The reason I didn’t use Turbo Tax this year is because I needed to take advantage of a Rapid Access Loan (RAL), and Rapid Tax had this available. A Rapid Access Loan is essentially a loan you receive from a specific bank, Santa Barbara Bank & Trust (SBBT) based on your refund amount. So if you need your money within 3 business days, this is the way to go. What happens is, you will receive up to $3000 minus all fees due from SBBT once you file your tax return. The IRS then sends your refund to SBBT. If your refund is more than $3000, when the IRS sends your refund to SBBT they deduct the amount of the loan, and then direct deposit the balance into your account. The rates for this are: to receive $300 to $2857 it is 3.5% of the loan. From $2857 to $3000 it’s a flat rate of $100, there is an additional $30.95 handling fee. Using Rapid Tax, you will also have the cost of the program that you used to file your taxes deducted, so there is no out-of-pocket expense to you. I used Rapid Tax this year to take advantage of the RAL.

As far as the functionality of the process, it was user friendly, but I felt like it wasn’t as thorough as Turbo Tax. Rapid Tax also has different programs to use. The Basic has unlimited email and live support, unlimited W2, above the line deductions (e.g. moving expense, teaching expense, student loan interest, alimony). The Standard program has all the basic features plus itemized deductions, joint tax returns, unlimited dependents, adoption credit, earned income credit for child and education expenses and child tax credit. You can also go through your whole return for free to see if you will receive a refund or have to pay. It is in the final steps where you will pay for the program once you file your return. Also available are additional services such as professional review of your return, professionally bound file copies, or a 3-year audit protection plan, these are all at an additional cost. I was satisfied with the process, and receiving my money was not a problem. So I do recommend this site as well. My tax returns are not that difficult to do, so that is why I felt confident in using another program. I feel that Turbo Tax is the better choice from the two.

Hope this has helped, and let me know what you think if you happen to try any of these websites.