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CNN Sunday Morning
Interview with Vera Gibbons
Aired March 17, 2002 - 11:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: Welcome back everyone. It's St. Patrick's Day and I'm taking a lot of grief here today for not wearing green, so they've decided to animate a little clover here, but to everyone out there, Happy St. Patrick's Day.
Speaking of abuse, let's talk about taxes, just a little less than a month to go until tax day. You don't have to make a last minute sprint to the post office though. You can file your taxes online and Vera Gibbons is here from Smart Money Magazine to help you try and decide if e-mailing, e-filing rather, is the way to go and thank you for being with us Vera.
VERA GIBBONS, SMART MONEY MAGAZINE: Hi, Catherine. You know I was going to ask you why you weren't wearing green either.
CALLAWAY: You can not imagine how much abuse I'm - I was here to almost midnight last night. I didn't have a lot of time to plan out my wardrobe this morning, but I do apologize and Happy St. Patrick's Day.
GIBBONS: That's OK.
CALLAWAY: But let's get back to the topic at hand, taxes. I like the idea of filing online. I'm a little frightened by it though. I know there are some software programs out there, Vera, that can help us, can help people like me who haven't done it before.
GIBBONS: Right.
CALLAWAY: Can you go through some of those, because I think that's what people really want to know is how to do it, you know. Certainly the benefits are, it's fast.
GIBBONS: Right, you get your refund back in a matter of days. You know, it takes the average filer about 12 or 13 hours to do their taxes manually. With a software program, you can probably do them in just a couple of hours, and the error rate for e-filers is less than about one percent, as opposed to 20 percent for those who file regular snail mail.
Now Turbo Tax and Tax Cut are the two leading programs. These are the ones you probably have seen everywhere. They really dominate the market. Functionally, they are similar. You can download your W- 2, your 1099. You can import data from last year's return. You can import data from both Microsoft Money or from Quicken.
And while Turbo Tax does have the overall edge, it is more popular than Tax Cut, one of the benefits of using Tax Cut is that you can actually talk to a representative from H&R Block if you want them to actually review your taxes. It will cost you an additional $30 but it is a good idea.
CALLAWAY: Yes, Vera. One second. I want to put up this graphic for everyone.
GIBBONS: OK.
CALLAWAY: If we have it. OK, here you go. Here's what you're talking about. No wait a minute. This is Taxes on the Web.
GIBBONS: That's another option also.
CALLAWAY: Yes, I don't know if we have the other one on the software programs. There we go. Here are the software programs that you can go out and buy, and as you said, there's Tax Act, which you can download. Then you can get the deluxe at $9.95. And tell us again about Turbo Tax.
GIBBONS: Well, you'll see, Turbo Tax is the most popular of the three. It's definitely very easy to use, and as I say, it is functionally probably the best one out there, certainly the most popular. Tax Act is the least expensive of the three. It's fine for someone who has relatively simple returns, doesn't have a very complicated financial life.
So those are the software programs. You'll notice that you see the standard version and the deluxe version on your screen.
CALLAWAY: Yes, why would you want the deluxe version?
GIBBONS: Well, the deluxe version offers video help that the standard versions do not. They'll walk you through a number of scenarios that the standard versions won't. But if you have relatively simple returns, you're probably just fine getting the standard version and saving yourself a few dollars.
CALLAWAY: Are these user friendly? I mean do you like Turbo Tax better than Tax Cut or vice versa?
GIBBONS: You know, Turbo Tax has a nice interface. It's sort of a friendlier interface, as opposed to Tax Cut. Tax Cut has a more industrial look to it, but it's largely a matter of personal preference. And then, of course, there are the web-based programs, which are even less expensive.
CALLAWAY: Yes, let's look at those now. This is when you log onto the Web site. Is it Tax Act?
GIBBONS: Yes, those are your options on the screen now, and those prices are both for federal and state. One of the biggest benefits of doing a - using a web-based program is that you don't pay a single cent until you actually go and file your return. But keep in mind there are some downsides. One of the downsides is that -
CALLAWAY: Security.
GIBBONS: You are - yes, security is a huge issue, and you are at the mercy of your modem speed. So it can get a bit clunky moving from one part of the return to the next, and if you have to file a multi- state, you can't do that with a web-based program, but you can with a software program. But I think more people will be using the web-based programs this year, in particular, simply because they're less expensive.
CALLAWAY: Well what about the security on the web-based programs?
GIBBONS: Well, I actually went ahead and asked the tax place managers, the HR people that very question, and they all insist that the sites are in fact secured, no worries kind of thing. But personally, I would feel a little bit uncomfortable doing my taxes on the web, just because tax information is highly personal information.
You certainly don't want that floating around in cyberspace, and every so often you do hear about a hacker bucking the system all together. So security as far as I'm concerned is, in fact, an issue. But again, they insist that the sites are secure.
CALLAWAY: So I would imagine after you do it once though, either with your home computer program or on the web, it's a lot easier the second time.
GIBBONS: Oh, yes.
CALLAWAY: Yes.
GIBBONS: Yes, you can probably do it in just about an hour if you wanted to use one of these programs before.
CALLAWAY: I would have to allocate about eight hours the first time, however. What about an accountant now? You know, you get all this independence,which we all like, but aren't there some situations where you need an accountant?
GIBBONS: Yes, there are 440 new tax law changes this year.
CALLAWAY: Wow.
GIBBONS: It's very confusing. I mean some of them are retroactive. Some of them take effect in 2004, 2006, 2008. So it is very confusing, while the software programs will, in fact, just walk you through the process and alert you to the changes if they're relevant to your situation.
They don't take the place of an accountant. If there are gray areas in your mind, if you want additional information about the tax law changes and how they affect you, then all the more reason to sit down with your accountant and figure this out, because it's very confusing this year.
CALLAWAY: Nice to have someone to cry with too.
GIBBONS: Yes, if you can actually schedule any time to meet with them. They're a little bit busy this time of year.
CALLAWAY: They certainly are. Vera Gibbons, thank you for being with us, Smart Money Magazine, also for making me look really bad by wearing lots of green. Happy St. Patrick's Day to you.
GIBBONS: Same to you.
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