On the Internet: Tax Resources
by CI Staff
Tax Resources On-Line
The Internet has become a valuable source of reference and help for tax preparation. Whether you plan to file your own taxes or seek the help of a professional, the Internet can help you make the right choices.
Internal Revenue Service
In addition to the helpful advice and articles found on the government-sponsored Web site, the IRS has added some features to ease the burden of tax preparation. The site provides a number of free publications and forms available for download in Portable Document Format (PDF), which is viewed using Adobe Acrobat Reader (available for free at www.acrobat.com).
New to the site this year is the ability for anyone to file taxes electronically for free (e-filing). In the past, only those who met certain qualifications were able use this time-saving service. Because it is cheaper for the IRS to process electronic returns, many of the software providers have disposed of any restrictions. To gain access to one of the 19 programs offered, go to any IRS home page, click on Free File and choose the link best suited to your tax status. If you instead go directly to a tax preparers Web site, you may be charged to e-file, but the IRS offers this service for free through their Web site.
Caution must be used, however, because most companies offer the free filings for federal taxes only and will charge for state e-filings. A handful still impose restrictions based on income and other factors for the free federal filings. These free filings may not be suitable for high-income investors with more complicated returns. Such investors might be better off purchasing software equipped to handle their complex tax scenarios.
The IRS site also maintains sections devoted to individuals, businesses, charities and non-profits, government entities, tax professionals and retirement plans. Individuals can learn if they qualify for credits such as an earned income tax credit (EITC) or a health coverage tax credit (HCTC). There is information about late filing and payment, extension time, abusive tax shelters and tax scams to avoid. A withholding calculator can tell you if your employer is withholding enough from your paychecks. For those with special circumstances, such as farmers, household employees, foreign nationals and retirees, specific site sections provide forms and information for each situation.
Finally, a frequently asked questions (FAQs) section offers answers to common tax questions that visitors can browse by category or keyword. Answers include links to related Web sites, forms and publications. The newsroom has the latest news from the IRS as well as an archive of past releases. Links to hot topics, facts and figures and national news are included as well.
State Tax Forms
Federation of Tax Administrators (FTA)
The FTA provides services to state tax authorities, administrators and individuals including research, information and links to state income tax forms in PDF format. The site links to state e-filing services, available for free in 43 states, along with state tax comparisons and information on excise, sales and motor fuel taxes.
SisterStates Tax Directory
The SisterStates Web site claims to be a one-stop source for all state tax sites. Links to tax forms for all 50 states, the District of Columbia, New York City and U.S. territories are included as well as federal tax forms, instructions and mailing addresses.
Commercial Tax Sites
1040.com provides resources and articles for taxpayers about important tax issues, such as traps that taxpayers can fall into while using the Free File provided by the IRS. Visitors can download federal, state and fill-in forms by searching for the year, form type and state. The site also has a tax estimator and a tax calendar to assist with filing. Taxpayers can file on-line through the site or find necessary mailing addresses and other tax site links.
Although many use this site for finding news stories, graphs and statistics relating to their investments, CBS Marketwatch also has a section devoted to taxes. Under the Personal Finance tab, the site offers tax information through up-to-date news articles and links to tax sites. Articles range in topic from how to file taxes electronically to handling deductions for charitable donations.
CNBC at MSN Money
CNBC at MSN Money continues its partnership with H&R Block by providing an abundance of information on tax filings and a link for filing directly with H&R Block. Visitors can download IRS forms and publications as well as H&R Blocks TaxCut software program. A free 30-day trial of GainsKeeper is also available for download. GainsKeeper is a portfolio tracking software program that tracks the cost basis of investments by lot and provides a completed Schedule D for tax filing. It also offers a tool for checking the tax impact of trades before actually buying or selling. A free 90-day trial of Microsoft Money 2005, which can be used to track tax-related expenses and import data into tax preparation software, can be downloaded as well. Visitors to the site can also read articles about tax law changes, calculate deductions, estimate taxes owed and view a tax calendar and checklist. Questions can be sent to the sites tax experts and are answered through a message board.
H&R Block offers three options for filing taxes: on-line, with the help of a professional at an office or using TaxCut software (page 4 of this issue for full a description of the software program). Do-it-yourself on-line filing is offered for a fee ranging from $29.95 to $79.95. For an in-person consultation, the site helps you find an office near you. Or, you can download the software for a fee of $14.95 to $39.95. In addition, H&R Block lets visitors check the status of a refund, view articles about tax returns and use a tax preparation checklist. The latest tax news and changes can be found here as well. New to the site is a withholding calculator and a 2004 tax estimator.
This site gives advice on how to deal with common tax issues such as forgiveness of debt, audits, problems with tax collection, lowering your taxes and avoiding tax problems in the future. An Ask the Expert section allows visitors to ask questions and get answers via E-mail, a fee-based consultation, by reading recommended books or through links to other Web sites. Taxpayers can also find tax preparation professionals in their area.
In addition to the TurboTax software described in this issues Products Update column (page 5), the TurboTax Web site offers many helpful tax tips and resources that include: tax information about buying and selling a house or inheriting property, and tax planning and saving advice. Additionally, tax calculators are available to calculate withholdings and estimate returns or payments and deductions. A support center for the software program is available on the site as well.
Yahoo! Finance Tax Center
This Web site offers links to both TurboTax and H&R Block as the featured tax-preparation providers of the site. Visitors can find tax-related articles, tax guides for investors and tax tips ranging from handling a divorce and getting the proper deductions to the effect of retirement on taxes. Tax tools to help with tax preparation include tax calculators, checklists, calendars, tax rates, state tax profiles and a tax glossary chock full of useful terms and definitions. Links to check your refund status, find an accountant and read tax message boards are included as well. As with most of the tax sites, federal and state forms are available for download.