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Where to do your taxes: an exhaustive guide

Of all the ways to prepare your taxes this year, read about what might be best for your situation. 

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    Tax help comes in many forms. Find out what's best for you.
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Whenever tax season rolls around, I have to come to terms with the fact that I've completely forgotten how to file. It doesn't matter how many years in a row I've successfully figured it out, or how much research I did the year before. Every year, without fail, I get my tax documents in the mail and suddenly realize I have no idea what to do with them. 

My annual tax-blindness is probably a product of my age and haphazard career track. At 25, I've only recently come into full-time, post-grad school employment. Sure, I've got about 10 years of tax-filing experience under my belt, but when every year is a different combination of minimum wage jobs, loan payments and full-time enrollment in school, it's hard to establish a routine way of doing things.

Despite my unique life path, I know I'm not alone in my struggle to decide which, if any, tax preparation service to use this year. Maybe you just got a new job, maybe you retried, or maybe you inherited a large sum of money from a wealthy great-aunt. Whatever your situation, there's a tax-preparation option out there that's right for you.

Recommended: Taxes in 2015: 7 changes and 9 weird deductions

With the help of my financially-savvy colleagues here at Brad's Deals, I've compiled a comprehensive list of the different ways to file your taxes, how much each one costs, and what kind of person should use them.

1. Free File with the IRS

  • Cost: Free for federal taxes, and some states offer state taxes for free too.
  • Who should use it: People with straightforward income streams of less than $60,000 per year.
  • How it works: Filers who earn less than $60,000 per year are eligible to use free, brand-name tax prep software to file their federal, an in some cases, state taxes for no charge. Go to the IRS website and click on Help me find Free File software. You'll be prompted with a few questions about your age, Adjusted Gross Income, residence and eligibility for tax credits, and after you answer you will be provided with a list of tax prep software you can use at no additional cost. Filers who earn more than $60,000 per year can use Free File, but will not get access to the complimentary tax prep software, and will instead be able to download fillable forms they can use to E-File on IRS.gov.

2. Tax Counseling for the Elderly

  • Cost: Free!
  • Who should use it: Individuals 60 years and older who need help on their taxes but can't afford to pay for an Enrolled Agent or CPA. Especially good for retirees living on a pension or government benefits.
  • How it works: Unfortunately if you haven't already applied for the TCE grant, you won't be able to take advantage of it this year. However, you can plan ahead for next year and apply for the grant between May 1 and 31, and you'll be notified about whether or not you got it before October 1. If you're accepted, you can get free tax counseling assistance for federal tax returns with certified volunteers who specialize in social security, retirement and pension issues. In all honesty, the website explaining all this is pretty confusing, so I'd recommend anyone with questions about this program call the grant program office at 404.338.7894 (not a toll-free number) or send them an email at TCE.Grant.Office@irs.gov.

3. H&R Block Online Filing, Turbo Tax Software or TaxACT Software

These three services are similar so we'll compare and contrast a little bit to help you get the best deal. In general, using an online filing service is best for do-it-yourselfers who have decently straightforward income streams, uncomplicated additions like charitable donations and student loan interest, and general tax knowledge.

H&R Block Online Filing

  • Cost: Free for federal, $9.99 per state filed (for a limited time, usually $27.99) with options to upgrade to Basic, Deluxe or Premium software for an additional cost. With the state filing discount, this is our pick for the best deal on tax prep software right now. This deal expires on Monday, 2/23, so grab it while it lasts!
  • How it works: Head over to their website, click on File Online, choose which online version is right for you and get those taxes filed! As previously stated, the free version offers state filing for just $9.99 per state, which is the lowest price for this service that's currently on the market. The free version also comes with the ability to automatically import your W2, and keeps you in the loop on what your refund looks like every step of the way with their innovative Refund Reveal service.

Turbo Tax Software

  • Cost: Free for federal returns,  $27.99 per state filed.
  • How it works: The free version is pretty bare-bones, but it gets the job done if you've got a pretty simple return process. If you're looking for something that will help you maximize your tax deductions, their Deluxe version is on sale for $34.99, the Premier version for $54.99 and the Home & Business version for $79.99 (plus $36.99 per state filed).

TaxACT Software

  • Cost: Free for federal returns, $14.99 per state filed.
  • How it works: The Deluxe version of this software is available for $19.99 total ($12.99 for federal + $7 for state), so if you're looking for a few more bells and whistles at a lower price than what TurboTax is offering, this is your best bet.

6. File In-Office with H&R Block 

  • Cost: $90+, for simple returns, it's $45 for federal and $45 for state, but it goes up from there depending on how complicated your taxes are.
  • Who should use it: People who aren't tech savvy, don't have the time to do it themselves, don't mind paying a little extra and have relatively simple tax returns.
  • How it works: Call up your local H&R Block, or go online to make an appointment to go over your individual tax situation. You don't have to pay anything until you know how much it's going to be, and an agent will talk with you to help you understand what kinds of forms you'll need. There is also an option to pay for your services out of  your tax refund. I did this last year and it was well worth the $90 I paid for it--I'd tried TurboTax first, but having H&R Block do it for me got me double the refund TurboTax told me to expect. As an added bonus, if you got your taxes done somewhere else last year, H&R Block is offering to charge 50 percent less than you paid their competition when you file between February 15 and March 15.

7. Enrolled Agents

  • Cost: Varies, most charge an hourly rate.
  • Who should use it: Individuals and couples who have complicated returns and who want to reduce their chances of getting audited, and anyone who wants helpful advice on future tax planning.
  • How it works: The IRS doesn't have any restrictions on who can prepare your taxes, but you should still be mindful about who you put in charge of any part of your finances. For peace of mind, make sure any tax preparer you're looking to hire is an Enrolled Agent--a tax specialist who's "demonstrated competence in all areas of taxation, representation and ethics before they are given unlimited representation rights before IRS." To find a list of Enrolled Agents in your area, do a quick search on the The National Association of Enrolled Agents.

8. Certified Public Accountants

  • Cost: Varies, average of about $200/hour.
  • Who should use it: Investors, small business owners, individuals or couples with complicated tax situations and higher-income people subject to the Alternative Minimum Tax.
  • How it works: Hiring a CPA is probably the most expensive option for tax prep, but if you've got a complicated tax situation or a lot of money on the line, it can save you some major financial headaches down the line. If you have the funds and want the protection (a CPA can represent you if you're being audited by the IRS), a CPA is well worth the money. To find one, check out the American Institute of CPAs or ask for referrals from friends and colleagues with similar tax situations.

If you don't want to pay extra to have your tax return directly deposited into your bank account, or don't want to wait for a check in the mail, Walmart is offering a way to pick up your tax refund in cash (!!) through their Direct2Cash program. For more information, check out our recent blog post on the subject: Pick Up Your Tax Refund in Cash at Walmart!

Finally, no matter how you decide to do your taxes this year, don't forget to file before the April 15, 2015 deadline. Happy taxing, everyone!

The Christian Science Monitor has assembled a diverse group of the best personal finance bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link in the blog description box above.

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