This is a quick plug for TaxSlayer, the online tax service I've been using the last several years. I don't get anything out of it if you use them. I just like saving money and I suspect you do too. TaxSlayer is $9.95 for filing both State and Federal (check first to see if your state is supported if you need state filing). A very cool thing is they let you prepare, view and print a watermarked copy of your returns for free. You only pay when you file it online, or if you want to print an unwatermarked copy (which you can also do after online filing). I guess if you were really cheap you could copy it all by hand and mail it in. It's well worth it to me to give them the $10 and be done with it. When you're comparing tax services, remember the price at TaxSlayer includes State and e-filing of both Federal and State (for supported states). Many services charge extra for State.
I've been doing my taxes on the web for several years. I usually print the watermarked returns to review with my wife, then I e-file them and save the unwatermarked PDF. I don't usually print those unless I need them for something.
In the Doing-the-Right-Thing department, TaxSlayer's online service is free for active duty military. They've done this as long as I've known about them. For the 2001 tax year, TaxSlayer offered free filing to people in New York and the Washington, DC area who were affected by the terrorist attacks. I asked them whether they had considered doing the same for Katrina victims. They said they had wanted to, but could find no way to programatically restrict it to those immediately affected as they had for 2001. They pointed out that many of the people affected by Katrina, even those who were not in the devastated areas, already qualify for the IRS Free File program, which TaxSlayer also participates in. If your Income (AGI) is below 50K, check if one of the providers has an offer you qualify for. According to the IRS site, 75% of taxpayers qualify for free filing.
TaxSlayer is no fly-by-night newcomer. They've been in the professional tax preparation software business since 1992, and have had web-based tax preparation since 1998. They also have the coolest name and logo of any tax service.