If you're submitting to Papertank, using something simple like Notepad might actually be better. For the purposes of online submission, you don't need the kind of complex formatting that Microsoft Word offers. In fact, most of that formatting will not carry over to Papertank, which means that your paragraphs will not be indented or aligned the way they are in Word.
Not that you want your paragraphs indented in the first place. The online standard for paragraph separation is to double-space between them, like I'm doing in this post. Even with the paragraphs indented as they are in a book, a "wall of text" is a "wall of text" and no one wants to see that on a computer screen.
I use Microsoft Word for writing my stories, but when I copied my first Papertank submission from Word into Firefox, I had to go through the story and add an extra space in between each paragraph anyway.