Sunday, January 22, 2006

Filing Taxes in 2006.

Several blogs and business week articles are discussing the availability of free or dirt cheap tax software to use this tax year. I found these two blogs useful - one from 2million and the other one from boston girl.

Good links and good pointers. I too hate paying for tax software and would rather do it by hand ( tedious ) or use software for free. You are also in the camp where doing taxes by hand induces a headache and spoils an otherwise nice weekend.

As 2million mentioned, I found that if you hold an account with Vanguard, you can do the basic federal tax and state tax for free if you hold a flagship account. I found out that as a basic mutual fund holder, I can get this package for $9.95. It is a bit on the more expensive side so I went looking at my other broker Fidelity.

From fidelity, I could only get the same deal as Vanguard. I would need to pay $9.95 for fedaral income tax return using turbo tax for the basic edition or $19.95 for the turbo tax premier version.

After failing to get a no cost deal in both places, I went site. The site welcomed me with a big sign called "Check Out Free File". When checking it out, the IRS site said there is no such thing as free lunch!

Whoever said there is no such thing as a free lunch may have been right. But for millions of eligible taxpayers, with an Adjusted Gross Income of $50,000 or less, there is Free File. Free File is online tax preparation and electronic filing through a partnership agreement between the IRS and the Free File Alliance, LLC. In other words, you can e-file... free.

Since my AGI is greater than 50K, I figured the IRS option wouldn't work for me. So, checking around the site, I found,,id=101223,00.html. This offers several tax packages none of which are free. Some have the free printing option but e-filing is going to cost money.

So I thought I would have to settle for the Free Tax Cut Standard suggested by 2million. Turns out that this download is not free and costs $9.95. So, my last hope to find a deal to get efiling options for free disappeared for this year.

1 comment:

2million said...

Just started reading your blog - thanks for the mention. I really like your stock analysis - I will be checking back to catch up on more of these. Thanks!