Find Out The Best Way To File Your Taxes

March 30, 2008 — -- For Andrew and Amanda Glasgow, life is hectic. The young Brooklyn couple juggles time with their new baby, Jacob, full-time jobs, even a new home and mortgage.

Amanda says they agree on pretty much everything … except on how to file their taxes. "We have this argument every year. I'm always on the side of Turbo Tax. … He's always pushing for an accountant."

Amanda, a PR consultant, likes the flexibility of the do-it-yourself approach and Andrew, a marketing manager, admits he has trust issues and likes to leave things to the professionals.

So we gave them a challenge: prepare their taxes three times in three different ways. For Andrew it will put to rest their long-running friendly feud. "It will end our eternal debate."

At-home tax software is a booming business. In 2007, 40 million Americans used it to do their taxes, an increase of 17 percent over 2006.

Turbo Tax cost the Glasgows $44.95 and came with an audit risk meter that analyzed their return before they filed and assessed the odds the IRS would come calling. Turbo Tax says as a whole, the IRS audits less than 1 percent of the people that file -- 0.93 percent to be precise.

Total Time: 2 hours
Turbo Tax Cost: $44.95
Total Tax Refund: $699

For Amanda, it was a winner, "It's quick. It's easy. The one con to it, it's just you and the computer. If you were nervous or had a weird thing on your return maybe you'd want to have a real human." For Andrew, "You kind of feel like it doesn't let anything fall through the cracks. It prompts you."

Next they were off to find a real human at H&R Block, where tax pro Vincent Vasquez worked on their tax return.

The average cost to file a return at H&R Block is $200; an extra $30 will buy what's called "The Peace of Mind Guarantee." The company will represent you if there is an audit and pay up to $5,000 if an error is made.

Total Time: 50 minutes
H&R Block Cost $438.75.
Total Tax Return: $699 (exactly the same as Turbo Tax)

Cost: $300

Total Tax Return: $698.00 ($1 less than the others)

In their whirlwind tax tour, the Glasgows ended up with $655 in their pocket -- after fees -- with Turbo Tax; $261.25 with H&R Blcok; and $398 with the CPA.

The Winner: Turbo Tax

"I wasn't surprised at all," Amanda said.

"I got to say I'm surprised," Andrew said." Maybe it's the case of for our needs come tax season; it's simple, it's clear cut, we don't need to spend big money to get the money back."

"Say I was right!" Amanda said.

"You were right, you're always right," Andrew responded.