CompuBug by Larry Blasko for Business Wire.

SUMMIT, N.J. -- 'Tis the season when the Feds fish your wallet, and two tax-preparation software companies have long dominated the field. But TurboTax and TaxCut had better watch out - a 2004 startup called TaxNet is about to eat their lunch.

TaxNet is online (www.taxnet.com), and starting January 15, it'll be available for you to do your taxes online. (You have to wait until January 15, because Congress has an awful habit of last-minute jiggery-pokery with the tax laws.)

I've used a competitor (TurboTax) for years and two things distinguish TaxNet:

(1.) It's free for federal returns.

(2.) It's very, very easy, or at least as much as the word "easy" can be applied to our bizarre tax process.

TaxNet was founded by three guys who left TurboTax to do their own thing. Tom Allanson, David Murray and Fred Grant seem to have done a good job of identifying and exploiting an emerging market of younger people who are used to doing things online and who expect an excellent user interface, a thorough job and a low price. And who, for the most part, aren't trying to claim tax-deductible losses on Antarctic rutabaga farms.

TaxNet will charge you $19.95 for a state return, and $9.95 to zip your federal 1040 return to Uncle Sam electronically, but their web site shows that's still overall less than the competition, even their online efforts.

The interface has three windows, a primary window, where the work gets done, a feedback window that tells you how you're doing, and a help window. In the primary window is a headshot of a smiling young woman who looks entirely too sweet to be hanging around tax people. She should call her father.

A nice feature about TaxNet is it tries not to ask you questions that really don't pertain to you and that only a Seventh Level Tax Adept might hope to answer. After years of using desktop tax preparation software, I have yet to see a checkbox titled "Beats The Heck Out of Me."

A particularly interesting feature of the web site is the analysis of the competition. Look at the links on the bottom of the page. You'd expect each competitor would be profiled as completely evil.

Instead, what you get is a fair analysis of what's right with the competitor, what's wrong with the competitor and how TaxNet might be better. That is so heartening in itself that even if your Uncle Accountant does all your taxes, you ought to visit taxnet.com just to understand how a competitive market is explained and explored.

TaxNet's primary market seems to be young folks with relatively simple tax situations. It seems geared to those whose tax situation may be summarized as "the feds took it and I want some of it back." That doesn't exclude the over-50 set, of course, who are comfortable with the web and electronic filing and payment.

Advice: Try it on the federal forms. If it works, use it on the state and you're still ahead of the game. And if you're one of the lucky few who don't have to file state income taxes, you're way ahead of the game.

Larry Blasko has been covering consumer technology in his CompuBug column for more than 20 years. Questions and comments are welcome at [e-mail] or, via snailmail, at 135 Tulip St., Summit, NJ 07901.