Guest Author - Cate Brizzell

For most Americans it's a February ritual. We gather up our forms, stubs, receipts, papers and sticky notes and head out to the accountant's office. We pay fees upwards of $100 or more, consoling ourselves that our large refunds (which are really nothing but zero-interest loans to the U.S. government) more than offset the preparer's fee. It's tax time!

What most Americans may not know is that the advent of the internet has made it easier than ever to do your own taxes. Yes, you can do it yourself, in very little time for a lot less money than most accountants charge.

You may even qualify to do your taxes online for free, as long as your adjusted gross income (AGI) is $54,000 or less. All you have to do is click through to an online tax preparer from the IRS website at www.irs.gov. The information is on the home page. Not sure whether your qualify? Check your 1040 form from last year. Look at the last line on the first page. That's your AGI from last year.

What if your AGI will be well over $54,000? You can still prepare your taxes online for a lot less than an accountant's fee. The three major online tax preparers are 2nd Story's TaxAct (www.taxact.com), Intuit's TurboTax (www.turbotax.com) and H&R Block's Taxcut (www.taxcut.com). I've used them all, and find them relatively comparable. The key is to find one you like and stick with it, since you can import last year's data as long as you stay with the same program.

Generally, TaxAct is a solid bargain choice for those with relatively simple returns. You can't beat the price--free, or less than $20, including state returns and e-filing. TurboTax and TaxCut are very similar, so it's really a matter of personal preference or budget in deciding which one to go with. To help your decision, it's a great idea to take the time to run your numbers through both services using the "try for free" feature. You'll figure out which one you're most comfortable with.

The online tax preparation is very similar to software you can buy at any discount or office supply store, except you may have access to online tax experts and free e-filing included. Typically, the software will take you through the 1040 forms using an interview process. As you answer and enter your data, the software will calculate a running estimate of your tax refund or liability. Help is available as well as links to the IRS website for additional, "official" information.

There are various levels of online preparation options and help available, from 1040 EZ to more complicated business tax preparation. Each step up in complexity involves higher fees, but none of the fees exceed $90, a pretty good deal compared to a typical CPA's bill.

E-filing is always available and usually included in the preparation fee. State returns are also available at an additional cost per state.

If you're a typical 1040 filer, you'll probably anywhere from $0 to 65 to prepare and e-file both your federal and state income taxes.

Dependent upon your accountant's advice? H&R Block's TaxCut offers the opportunity for one online chat session with a tax expert as well as audit assistance if you complete and file through their website. TurboTax charges $40 for audit assistance but does offer slightly lower fees for tax preparation overall. All companies offer online and toll-free help.

Worried about security? The online tax preparers use secure session technology, similar to what you'd expect when purchasing online. When transmitting your data to the IRS the companies use encryption technology very similar to what banks use. You create a password-protected account that can only be accessed by you.

Afraid you won't have the time to start and finish all in the same day? Online tax preparers allow you to begin, save your session, and return at your convenience. Need to find a form? Need to consult your spouse? Need a sanity break? Just save your interview and finish later.

Leery of working online? You can purchase and download TurboTax or Taxcut software directly to your computer, working only off your hard drive, or have a CD-ROM sent to you. You can also pick up a copy of the software at most retail outlets. TaxAct lets you download their software for free. Build your confidence by working with the products offline; then perhaps you'd be willing to try the online version in future years.

One final thing to keep in mind is that you can usually begin to calculate your taxes for free, paying only when you wish to print or file. Take advantage of this to do a "practice run" and build your confidence, or to quickly estimate what your refund or liability will be. You'll still be able to save and return to your session, if needed.

If you have relatively simple taxes and have toyed with the idea of doing your taxes yourself, give online tax preparation a try. You might be surprised at how easy it is--and how much money you'll save!