If you're looking for a great deal on Web-based tax software, start your search at the IRS's Free File Alliance page: You'll find offers from all major tax-software vendors for free online tax preparation and e-filing.

In almost all cases, no restrictions apply: All you need to do is link to the vendor of your choice from the IRS Web site. All the major vendors are listed, along with a brief description of what the company is offering (typically, it's their basic Web-based 1040 software). When you've made your choice, you simply click on the product name to leave the IRS Web site and then land on a special page where you can sign up for the Free File offer.

The savings on your federal return vary: Intuit, for example, is offering the basic version of TurboTax for the Web (plus e-filing) for free to those who arrive from the IRS's site; all others must pay $20. H&R Block's standard Web-based service is free when accessed via the Free File Alliance site, $30 when you go straight to H&R Block's Web site. TaxAct offers its basic Web-based software for free to all, but if you sign up via the FFA site you don't have to pay the $8 that other users are charged for e-filing.

There's also a Free File program for state returns, but most vendors still make those returns available only to some taxpayers; Intuit Inc., for example, doesn't offer a free state return for California.

(PC World last month evaluated a number of these Web-based tax services. Find the review here.)

The e-file imperative

So what's the catch? For newcomers especially, there is none. For those who've used tax software services in the past, however, the free-file offers have at least one significant drawback: You can't import a previous year's data file, which means you have to manually enter every last bit of information - a potentially time-consuming task, especially for people with lots of investments or assets to track.

The only other caveat is that Free File Alliance members can change their offers up to twice during the tax season - so if you're interested, you should probably enroll quickly just in case the vendors decide they've been too generous. The IRS says taxpayers filed 3.5 million returns through the Free File program last year - a little more than 5% of the total 61.5 million returns filed.

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