TurboTax Deluxe Online is one of five online tax-filing systems offered by Intuit. It starts by creating a secure connection between the Intuit servers and your computer, the same type of connection that many online stores use to encrypt data and keep it safe from unauthorized users.

Once the secure connection is created, TurboTax Deluxe Online operates almost the same way as download or CD versions of TurboTax. It uses a basic interview approach to gather the information it needs to complete the various forms and schedules for a federal tax return. The interview process starts by asking you what's new for the 2007 tax year; for example, did you buy, sell or refinance a home, change jobs, get married or get divorced? The answers you supply help TurboTax determine which forms and schedules you need to complete. The interview process also helps you get any deductions or credits to which you're entitled.

When you're done, TurboTax will check your return for errors, missed deductions or missed credits. If the IRS should decide to audit your return, a TurboTax representative will explain the process and suggest the best way to respond. If an error occurs because of TurboTax's calculations, Intuit will pay the penalty and interest.

Once everything has been checked, you're ready to file. You can either print a standard return to submit via snail mail or take advantage of the included opportunity to e-file.

TurboTax Deluxe Online provides an easy-to-use interface, plenty of help and a good collection of tools that are designed to help you minimize your tax liability. The only real downside is that if you need to file a state return, it will cost you an additional $29.95, although that does include a free state e-file. In terms of cost, TurboTax Deluxe Online is in the higher bracket of tax filing software this year.


Pros: Interface is easy to navigate, deduction/credit finder works well, includes e-file of a federal return
Cons: State return is a separate fee