The Tax Man Cometh

For those of you last-minute slackers or avoiders out there, it is now time to get your taxes done. The last thing you want is to be slapped with some huge penalty or have to go through a byzantine procedure to sort out your mess. As the saying goes, prevention is the best cure.

With e-filing, gone are the days of rushing to the post office. Many people buy Turbo Tax and get a tax write-off for it, but if you you're poor like me and don't even make enough to use that deduction, there are free and very good options out there. For federal returns, the IRS has a list of websites that allow you to e-file for free, provided that you are below a certain income threshold. Many of the sites sound like no-namers, but there are couple of reputable players: TurboTax and H&R Block. I've filed using the H&R Block one and I give it a thumbs up. It is very easy to use, and you can save our information and come back anytime. There's a sidebar for helpful FAQ's if you're unsure about something. It even handles more complicated things such as Schedule C calculations. It's a breeze to e-sign and send it off, and you have the option of saving and printing a copy of the return. These commercial websites try to make money off of you when you file your state taxes with them. It's very easy and certainly tempting, but since state taxes are easy to do, I'd rather pocket my $25.

I don't know about other states, but I know that the state of California offers free e-filing for low-income taxpayers through its own CalFile system, instead of third party vendors like the IRS does. However, CalFile is limited to very simple returns; if you have income from sources other than a W-2 and a few common sources, you'll have to use other options, which are free only if you file your federal taxes with them. However, the Orange County Legal Aid Society does have a free biligual (English/Spanish) program for both federal and state taxes, but you can't use it to file state taxes alone.

This has been a Hot Off the Sales Rack public service announcement. If you know of good, free options, feel free to share.