PILOT CONSUMER TESTS:

Pilot-Tribune Editor

A tsunami of advertising is bombarding taxpayers this season to use online tax preparation services - including urgings from the IRS, which stands to save time and money if returns are more error-free.

The feds tell us that about 20 percent of paper forms are screwed up, while only 1 percent of e-filed (electroic) returns are flubbed.

But is it really worth the effort to change from paper to electronic? We decided to find out.

We took a typical family of four, and did their taxes first in writing, keeping track of the time and the hassles. Then we did the same family using each of the two leading online preparation services - H&R Block Online and TurboTax.

TRYING IT OUT

All three methods worked fine, though we admit to using the pencil eraser once or twice on the old-fashioned form, and the delete button on both the online efforts.

Bottom line, all three methods came out with the very same dollar figure that our little family owes the U.S. of A.

A word of warning, though - no matter the method, READ the instructions before you start, especially the "what's new" sections. Deductions, credits and even the schedule form numbers have changed in a few key areas for 2009-10, and you're going to want to know what the Making Work Pay credit is about before you hit that blank on your form.

It surpised us how similar TurboTax and H&R Block online systems are.

One minus we found right away about TurboTax is that while they advertise "free" service, some of the company's websites have it and some don't, and that's not good business. The free version is at www.turbotax.com. Their competitor's free service is at www.hrblock.com. Other providers can e-file for you, too.

Basically, the two big companies offer the same choices for the same prices:

There is the "free" service for people who would normally file a 1040EZ form, but unless you are single, don't own a home, and have no kids or real investments, don't expect it to work for you. Note that both will charge you if you continue on and do a state form with this service.

Next is a "deluxe" model - which is what most people would need. It costs $29.95 for the federal filing and charges additional for a state form. A premium service, for people who are self employed or own rental property, is $49.95 plus an additional state fee.

TurboTax offers a CD/download for a much higher price that will let you file five forms, and for a hundred bucks H&R Block gives an online system with a real-time "tax professional" to work with you as you fill it out. Skip the bells and whistles.

The beauty of the online systems is that you can start for free - see how it goes and decide at the end if you want to pay for it. If nothing else, you can double check your old-style forms this way, and all you're out is the time it would have taken to watch an episode of "Idol."

THE RESULTS

When it comes to the traditional way of doing taxes, not much has changed. We used the 1040A form - as two out of every three taxpayers will likely do this year - it is about as long as past years. It took 45 minutes to fill it out, double check our math and gather all the necessary paperwork to send in.

Nothing is real frustrating at this point, except realizing how much of your pay Obama has - but it sure isn't much fun, either. About half the total time was spend paging back and forth through the instructions to do worksheets and chase down details on what we can and cannot claim.

Call us old-fashioned, though, there's a bit of a hormonal rush at getting that ugly form done, as if we have firmly planted our flag of monarchy on our little square of economic territory. Unless you have access to a copier or scanner though, making the needed copies for your records is a buzzkiller.

TurboTax shaved a little time off the experience, clocking us in at around 40 minutes. Soothing colorful screens make the process a bit more interesting, but it can get frustrating having to scroll down to get to the next page over and over, and having to answer questions that don't remotely apply to you. "No, I am not an illegal alien thank you!" The worst of it is having to type out all the long strings of numbers on your W-2 forms - you'll long for a stapler to just ker-chunk it to the screen.

On the upside, there's no doing math, the software does it for you and checks for errors (no help, of course, if you type in the wrong info or do a typo on a number.)

H&R Block is almost exactly the same experience. It took us longer with that software, about 55 minutes, because the web browser shut down in the middle and we had to retype all that data. Hey, it wouldn't be tax time without a string of creative cuss words. In HRB's defense, the glitch was no doubt on our end, and if you take time to do the registration up front it will save your data as you go. I expect the two software systems would time out about the same.

The online systems are pretty easy if you are at least remotely familiar with doing taxes and financial terminology, but we had to resort to searching help files a couple of times. The systems do a bad job of telling what a 401k "code" you're supposed to search for on your W2 is, for example.

The thrill with the software is sending it off with a triumphant stab of the button instead of a drive to the post office. And if you have a fat refund coming, you'll get it in your hot little hands faster.

CONCLUSIONS

All three attempts worked fine, and we have no lack of confidence in any of them, since all the numbers matched up right out of the box. The time savings is not extraordinary, but hey, it was our first time with online systems.

If you have a complex situation, we would suggest the online systems don't replace a local professional.

In the end, it will probably come down to whether you trust your own addition and subtraction, and if it's worth $30 a form to save the trouble of mailing. In our case, our tester family owes moola, so they're in no hurry to hand it over to the feds, negating the speed advantage.

And how will I do my taxes, then, you ask? With tomato sauce fingerprints on every form, as I happily work my number 2 Ticonderoga pencil while chewing on $29.95 worth of supreme pizza.