Advice for preparing your return is as close as your mouse.
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Advice for preparing your return is as close as your mouse.
One is the loneliest number when you're facing a blank 1040 form or preparing to meet with your accountant. But why sweat it out alone? Dozens of Web sites promise to deliver the information and advice you need to complete your return.
To find out which sites deliver on that promise, we've spent time at many of them. The ones listed below contain the most complete information and are easiest to navigate. Each has its own personality and shines in certain realms.
Most of these sites provide tax tables, answers to frequently asked tax questions, and links that enable you to download IRS forms and file online. Some also have message boards where you can post questions and get answers. But be wary: The sites don't vouch for the accuracy of those answers.
If you own equities or mutual funds, you'll appreciate this guide, which covers in simple language the tax implications of selling fund shares and capital gains. The site also offers tax rules for traders, plus information on how to plan investment transactions to help lessen next year's payment to Uncle Sam.
Despite unabashed plugs for its offices and products, the giant accounting firm's Web site has much to offer. Its extensive frequently-asked-questions section is well organized by topic, for example, and the answers are thorough and in layman's language.
Some advice is arranged in a logical progression of life events. You'll find sections that deal with the tax implications of occurrences such as adoption, buying a primary or second home, and income fluctuation. The site also provides tips grouped by lay-language topics, though some are contrived ("Summer" includes a discussion of the deductibility of plastic surgery, which some folks may have had done so they'll look good in bathing suits.)
The site includes links to state tax-law information, as well.
The IRS has a split personality: It can be a frustrating bureaucracy, but on its Web site, the agency goes out of its way to be cheery and user-friendly. The screens are easy to understand, though tracking down what you're looking for can be difficult, even with the search engine.
A unique feature is Tax Trails, an excellent interactive question-and-answer tool that helps you determine whether a tax rule applies to you. If you select "Can you deduct business use of the home expenses?" the subsequent questions elicit yes-or-no answers, each of which activates a link to a related question. The chain of questions continues to rule out various options until you end up with the right answer.
Other useful features include a Taxpayer Rights Corner, which lets you know when to stand your ground against the IRS, and a Taxpayer Help and Education section.
You'll also find answers to more than 175 frequently asked questions, such as "Can I take a deduction for business use of my home?" and "For business travel, are there limits on the amounts deductible for meals?" Chances are, your problem's covered there. If not, try Tele-Tax Topics, an online version of the IRS voice-response system that supplies tips and guides you to resources grouped into 17 categories, including Types of Income and Tax Credits.
This site's great for those who want quick overall advice without searching for information on specific topics. Catchy headlines such as "Top 7 Taxpayer Mistakes," "The Top 10 Overlooked Deductions," and "Save a Ton on Taxes in Just One Hour" lead to informative articles. And if you're not sure something will pass muster with the IRS, don't miss "Strategies that DON'T Work."
MSN's Deduction Finder uses information you supply to identify deductions you can claim. And in the US Averages section, you can compare your income and deductions with those of other taxpayers in your income bracket.
You can e-mail questions to experts such as tax attorney Jeff Schnepper, the author of How to Pay Zero Taxes. Technically, Schnepper just hosts a message board where anyone can post questions or reply to others' queries, but he reviews the postings and answers the tough questions himself.
A leader in personal finance and tax software, Quicken provides a lot of tools and information in the tax section of its Web site. If you plug your numbers into the calculators at its site, you can get answers to such questions as "Should you hold your shares for 12 months?" and "What are your tax savings if you contribute to a 401(k)?"
The Taxes Step-by-Step sections explain several line items as you'd encounter them on your tax form. These sections tell how to prepare for doing your return, how to find commonly overlooked deductions, and how to determine whether you're better off itemizing or taking the standard deduction. You'll probably appreciate Avoid Audits, which warns about home office deductions and charitable contributions that trigger IRS interest.
The Tax Rates and Rules section discusses such topics as education-loan interest deductions, home ownership, and child tax credits.
This site, developed by Gary Klott, former tax columnist for The New York Times, is comprehensive. Not surprisingly, since a journalist created it, it's also strong on news. It has sections on bills pending in Congress, news headlines, links to IRS publications, and a library with details of recent Congressional tax acts.
Noteworthy features include the Year-Round Tax Guide, which offers tips, analysis, and explanation of personal tax issues. The Tax Season Guide 2000 features tips in 66 categories, such as Real Estate, College Breaks, and Business Equipment. The Procrastinator's Tax Guide provides last-minute tips for filing, getting an extension, and paying your taxes.
Quick Reference provides a guide to tax rates, credits, and retirement account tax information. Hot Tips concerns deductions and tax code items you may not know about. You can also sign up for a free e-mail newsletter.
Yahoo!, one of the premier Web directories, packs an enormous amount of information into its comprehensive, well-organized Tax Center. It's excellent for tax novices and folks who appreciate simplified explanations. Start with the Tax Preparation Checklist, which notes all the pertinent papers and forms you'll need before beginning your return.
The Tax Center's sections are thorough, but not overwhelming. For example, the Tax Guide for Investors simplifies the rules for reporting investment income or losses. The section on Roth IRAs claims to be the Web's most complete guide to the subject. You'll have access to over 150 screens of information about the retirement vehiclealthough you may prefer the site's brief overviews on the topic.
The Tax Center's mutual funds section covers most taxable occurrences involving funds, such as how to use foreign tax paid by your fund to reduce your income tax and how to determine your basis in shares that you've sold.
Money-saving tax tips on divorce, family/education, retirement planning, and more are provided, as well.
Leslie Kane. Need help in a hurry? Hit the Web.