There are lots of advantages to using a computer to do your taxes. First of all, the software does all the arithmetic for you, eliminating a lot of human error. Also, tax preparation programs can automatically sort and add all of those receipts youíre keeping in shoe boxes. Once the receipts are entered in the program, the program keeps them all straight.


Another useful feature of tax programs is that they include all the forms that most taxpayers need. You donít have to order forms or even search around your desk. You just bring them up in the program, fill them out onscreen, and print them to send them in. Most programs can also be used to file your returns electronically, although that requires paying a small fee to another company.


The programs carry forward data from each form and schedule to the appropriate line of the 1040. If you use a personal finance program such as Quicken or Microsoft Money to keep track of your finances during the year, you can import your financial data into any of these tax preparation programs.


The leading tax preparation programs are TurboTax from Intuit and TaxCut from Block Financial Software. Itís hard to recommend one program over another because each developer upgrades the software annually to try to outdo the competition. TurboTax and TaxCut almost always come out the top two in reviews, so Itís probably safe to go for either of them.


Although these programs have a lot of help features, donít expect quite the level of strategic advice you can get from a good tax professional. Nevertheless, they will help you better understand which deductions youíre entitled to and how to enter them on the forms.


The Internal Revenue Service doesnít mind you using a tax preparation program. In fact, the IRS likes it when people use tax preparation software because that tends to cut down on errors. Nevertheless, the tax payer, not the tax preparation software company, is responsible for any errors in a return.


Both TurboTax and TaxCut also offer a service that allows you to do your taxes on the Web. The process is similar to using the software, but all of your data and the programs youíll use are on a Web site. There are some advantages to doing it this way.


There are also some advantages to buying the software.


Regardless of whether you use the stand-alone software or do your taxes on the Web you can now file electronically which not only saves paper, it also saves time. Some online tax services charge a small fee for electronic filing, but in return, youíll get your refund faster.

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