New fillable tax forms: Putting in my 22 cents[SIZE=-1]Call me overcautious, but I?ve resisted using free online tax filing or tax preparation software for years because I?m not comfortable handing over my personal information to third parties, even if they?re approved by the IRS. But my boss asked me to test the new free fillable online tax forms*promoted on the IRS Website, so I let go of my fears and gave them a try.*
The new forms are not tax preparation software, like the free or pay version of TurboTax and TaxAct, that walk you through your return. Instead, they?re aimed at the do-it-yourself crowd, those with simple returns or who at least think they know what they?re doing. They are a step up from the fillable PDF tax forms available from the IRS. While you still enter information manually, the forms perform the basic calculations for you, just like a spreadsheet application.
Along with the return itself, you can add and fill out schedules and other documents, such as an online payment voucher. For example, on line 8a of Form 1040, which asks for your taxable interest, there?s a button that you click to bring up Schedule B ?Interest and Ordinary Dividends.? Once you fill that out, the necessary data automatically transfers over to the proper line on your Form 1040. Every form also has a button you can click to open the related instructions.
You can access your return from a handy index box that includes all the documents you?ve added. You can even start your return, save it, and come back later to finish up.
Once you?re done, you can print your return and either mail it in or file online, all for free, no matter now much you earn. The flash-based application includes most federal forms and schedules (it doesn?t handle state returns) and works on PCs and Macs.*
The service comes with a ?Calculation Guarantee? that pays any IRS penalties and interest that might result from a calculation error. (You?re on your own if you enter incorrect information.) Keep in mind that you still have to pay any owed amount once the error is corrected.
To test it, I first did my return manually, using a downloaded PDF version of Form 1040 and Schedule B, Interest and Ordinary Dividends. Then I redid it using the new online forms. They worked flawlessly, importing data from Schedule B and calculating my income, adjustments, and the amount I owed. I even discovered a mistake I made while filling out the PDF version.
I had two nits to pick:
- As you add or change data, the forms don?t automatically recalculate. Instead, you must click the virtual ?Do the math? button to update everything, or your return will be incorrect. But you?re reminded along the way.
- The forms automatically rounded the numbers I entered and calculations to the nearest dollar, boosting my tax payment by 22 cents. That?s fighting money for us cheapskates! But then again, I was so pleased with the new forms that I think I?ll file online this year, saving the cost of a 42-cent stamp and coming out 20 cents ahead.?Anthony Giorgianni
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