An Ode to Tax Software

I've been doing my own taxes for years, and for much of that time, I used pen and paper. But four years ago, I turned to tax-preparation software and I've never looked back.

If all you're filing is a simple Form 1040, you could probably stick to the old-school method. But if your tax situation is more complicated, tax software can ease the pain of figuring it all out -- which forms to file, whether or not you should itemize, etc. The only thing I dislike is having to type in the information from your W-2s, but that annoyance is worth making the rest of the process a breeze. I've used Tax Cut and TurboTax -- both are pretty good and walk you right through your taxes step by step with a series of questions. Be sure to have all your tax documents handy before you begin, and you should be done in no time.

What's even better is that, if you qualify, you can use tax-preparation software free through the IRS's Free File program. To be eligible to use the service, your adjusted gross income has to be $54,000 or less for 2007. I found the service fairly easy to use the year I tried it, though I did have to consult the FAQs several times to clarify some of the rules. But if all that's holding you back from using software is the cost of buying it, this is a great way to use it free — and if you use e-file you don't even have to pay for a stamp. (Note that with paid-for software, generally you have to pay a fee to electronically file. In that case, mailing the forms is usually the cheaper option.)