How to Choose the Right Tax Software

Editor's note: As a special feature for March, TheStreet.com offers an ongoing series on everything you need to know about taxes. Today is Part One.

So you've made the decision to prepare your tax return on your own. Bravo! I'm proud of you. While you will most likely need a drink (not coffee) during the process, you will gain invaluable information about your tax situation.

But which tax preparation software should you use? Should you use the Web or download the software? What are some things to look for when picking a product?

In a nutshell, the products are generally cheaper on the Web than if you purchase them at a store or download them onto your computer. And the perk to the Web is that you can then access your tax return anywhere, so you're not confined to the computer you used to download the product.

Some Things to Look For

If you don't know your way around a tax return, you need a solid interview process. That's basically a big ol' Q&A session. The product will ask you a bunch of questions, you fill in your tax info and it will automatically plop the numbers on the proper forms. So you don't have to deal with the forms at all.

Also make sure the product is properly updated with the current tax law changes.

Now before you consider buying a product, first see if you qualify for the Internal Revenue Service's Free File program.

In its continued effort to have 80% of all tax returns electronically filed by 2007 (73 million, or 57%, were e-filed last year), Free File services are available again this year for lower-income taxpayers.

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