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Review: Software to ease tax paperwork
(IDG) -- Doing taxes isn't much fun, but tax preparation software makes it ever easier -- and in some cases, cheaper. This year's big innovations come from Intuit, whose latest Quicken TurboTax products can import some electronic wage and investment forms -- a tax software first. KiplingerTaxCut by H&R Block counters Intuit with aggressive pricing and a powerful new ally: Microsoft. Meanwhile, scrappy 2nd Story Software continues to offer its TaxAct federal tax preparation software as a free download. Not to be outdone by the private sector, the feds have struck a deal with a company called Official Payments that lets you pay whatever you owe by credit card. Less thrilling: This year's packages hit you more brazenly with marketing pitches. TurboTax places icons touting America Online and E-Trade on your desktop (in addition to its own icon). TaxCut touts a free download of Microsoft Money 2001 (the Standard edition) as well as MSN Internet service. TaxAct pushes its own state and deluxe federal versions, as well as NetSonic Web-caching software.
Intuit's TurboTax is by far the most expensive package. But to some extent the premium seems justified by new features, particularly the automated entry of some forms -- W-2 (wage and salary reporting from employers) and 1099 (investment income/loss from financial institutions). We couldn't test these import features, but Intuit says it expects about a third of TurboTax users this year to benefit from them. Pay more to do lessIf your bank, brokerage, or your employer's payroll service has partnered with Intuit, you can easily download and import the W2s and 1099s into the program. Check the TurboTax Web site to see whether your payroll or brokerage is playing along; this new feature alone might justify continued patronage of TurboTax or a switch to the program. TurboTax can now import your Quicken or QuickBooks financial data directly -- you no longer have to create a .txf tax data file first from within your personal finance manager, an extra step that is still required if you use other personal finance packages. TurboTax also offers a service that TaxCut introduced last year: If your electronically filed return is accepted and you expect a refund, you can get up to $5,000 of the money within two days as a loan. However, Santa Barbara Bank and Trust, which provides this service for TurboTax, will deduct fees ranging from $29 to $89 -- compared to TaxCut's $30 flat fee. TurboTax 2000's interface seems simpler and less cluttered than last year's. And the usual plethora of help options -- from videos to books -- reinforce TurboTax Deluxe's positioning as the Cadillac of tax preparation packages. TaxCut's Microsoft connectionTaxCut's major innovation is less dramatic: It can directly import tax-related data from Microsoft Money 2001, much as TurboTax can import data from Quicken. Likewise, TaxCut accepts .txf files created in earlier versions of Money or in other finance packages. A new Where Am I? button simplifies navigation: Click it to open a list of steps that highlights the step you are on. Once you've finished your return, TaxCut offers a beefed-up tax-planning section for organizing next year's return. But price is TaxCut's strongest selling point. After rebates, you pay $22 to prepare and electronically file one federal and state return with the deluxe edition, compared to a $42 fee for the comparable TurboTax product. TaxAct's free standard edition remains an unbeatable bargain for people who don't need multimedia frills or tax guides. The 5.25MB download provides the same sort of basic interview-style assistance you get from entry-level editions of TurboTax and TaxCut. A $10 Deluxe edition adds free online filing and such extras as the ability to import last year's TaxAct file and a planner to assist you with managing major financial events. Bottom linesWhich package is best for you? If your payroll service or brokerage offers the direct import of data to TurboTax, and you want help with complex returns, you might be willing to pay a premium for the deluxe edition. Otherwise, TaxCut Deluxe is a much better deal for about the same level of help. The Home & Business editions of both TurboTax and TaxCut offer additional Schedule C help for small-business owners. If your adjusted gross income is below $25,000, the Quicken Tax Freedom Project lets you prepare and file your returns online for free. If you can live without videos, extensive tax guides, or the ability to import financial data from personal finance software, consider TaxAct. You might also want to check out the companies' Web-based programs. Whichever tax package you choose, it will definitely beat the pencil-paper-and-calculator experience. RELATED STORIES: Filing taxes? It's automatic with TurboTax RELATED IDG.net STORIES: Donate online and save on taxes RELATED SITES: TurboTax Web site | |||||||||||||||||||||||||||||||||||||||||||||||
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