+1 for Turbo Tax. I use the service that's a step above the basic package because I have a couple of stocks and bonds, I live and work in separate states, and I have to make quarterly estimated tax payments to the state of New York rather than having them deduct my taxes straight from my paycheck. It works just fine for me; much cheaper than paying someone to prepare them for you and a whole lot easier to fill out forms by hand. The first time I filed taxes I paid an H&R Block rep to do it for me. It was $300 and the rep screwed it up so I had to file an amended return at additional cost. Totally not worth it... it's much better to go it alone unless you're worth millions and have multiple income streams and you need someone to sort through piles of paperwork for you.
If you end up doing Turbo Tax or H&R Block online, check about bonus offers from your credit card company if you have one. I have the Chase Continental Airlines Mastercard, and by going through the Shop Onepass website and paying with my Continental card, I get 20 air miles per dollar spent - so if my Turbo Tax service costs around $100, I get 2,000 air miles which goes a long way towards a one-way flight. If you have a cash back or points rewards card that has similar deals with these online tax prep companies, you may be able to score a 10-20% discount. Think about it!