Having a friendly machine file our taxes for us rather than a human accountant sounds so promising. You can take your time, you can let some algorithms do all the work, and you can do it in your pajamas. What we love about online tax-filing software is the same thing that drives up what you'll pay, however. Just because you're giving money to the government doesn't mean you should stop acting like a consumer.
Video of the Day
Alessandra Malito at MarketWatch reminds us that companies like TurboTax may present a friendly face come tax season, but you could wind up paying more than you would with a person. The problem likely isn't an accountancy firm trying to keep up with the new tax code. A barebones online return usually has a beguilingly affordable price listed. That's so you're more likely to say yes to its slate of extra services, each a la carte feature piling up fast.
Some other hassles are baked into the software. For instance, rather than allowing you to compare prices throughout and at the end, if you change your mind about which plan to choose, generally you have to start over and re-file entirely. Online filing services may also say that your state return is free to file, but sock you with a processing fee at checkout. Think critically about whether the various upgrades are worth it, especially for features like audit defense (you probably won't need it). Finally, if you do wind up paying out the nose, there is an upside: Last year's tax filing fees can be deductible. They may not top the standard deduction, but it's worth remembering just in case.