Tax preparation software review
Cynthia E. Brodrick

Faster than filling out forms by hand ... Cheaper than a CPA ... Able to compute your taxes in a single bound ... look! On your computer: It's tax-prep software!

To find out who can save your (tax) day, this intrepid reporter and novice tax preparer obtained and put three tax preparation software programs to the test: Quicken TurboTax, Kiplinger TaxCut and TaxAct.

These tax titans each took on a heroic challenge: my 1999 taxes. Last year, my husband and I sold a house, bought a house and a computer, had a baby, paid for child care, did some freelance work and sold some stock. Obstacles such as these might slay any ordinary mortal, armed with only a pencil and calculator.

On to the battlefield ...

TurboTax

Likes:

• The progress bar at the top was terrific. If your taxes involve as many forms as mine, then you'll find yourself going back for something. TurboTax made this simple.
• The layout and design of the program is clean and easy to understand intuitively.
• TurboTax asks for a list of charitable contributions, then totals them. I know this is a small thing, but I get tired of adding this stuff up.
• After entering all the tax information, Turbo Tax offers the option of four kinds of reviews besides an error check. These reviews look for possible deductions and potential audit triggers, compare your taxes with national averages and assist you in planning for next year.

Dislikes:

• When I was ready to file, I couldn't find the cost of e-filing ... except on the outside of the box the software came in.
• I couldn't figure out the What-If form. This feature is supposed to allow married couples to compare filing separately and filing jointly, or allow you to look at this year's taxes against your projected taxes for 2000. It's complicated, and harried tax filers probably won't take the time to figure it out.

Overall impression:

TurboTax is easy to use. It guides a novice through the process and explains things well.

TaxCut Deluxe

Likes:

• Only TaxCut noted that our occupations give us the opportunity for freelancing. The program suggested that if my husband or I do any work at home, we could qualify for a home office deduction. Sweet.
• Taxes are dull, so it was mildly amusing when TaxCut tried to lighten the situation with comments such as: "Now we come to the part the IRS likes best ... your income."
• This is the only program that prompted me to deduct a portion of my husband's computer expenses because he uses it to track our investments.

Dislikes:

• Like some cheesy superhero, TaxCut played obnoxious music every time I opened the program.
• At first, TaxCut wouldn't give me a child credit. I never figured out why, and I had to override the program to get it. Also, because the program was not up to date, it skimped on my child care tax credit. Once I took the time to update it, the credit was corrected. Pity the poor fool who relies on the software to figure this out.
• When "interviewing" me, TaxCut skipped all over the place. It asks about income, then deduction, then more about income, then back to deductions. This is confusing.
• I could not find information about deducting fees for last year's tax preparation. Using the search function to find this information kept bringing me back to the Audit Buster. Is that a bad sign?
• For my charitable donations, I had to add them up myself and enter the total. It'd be nice if TaxCut put its computer calculators to work for me on something this simple.
• Half the problems I had were because TaxCut wasn't up to date. It wanted me to update it before starting -- and I'd just bought the damn thing!
• At the end, TaxCut really pushes the rapid refund, though it acknowledges that this is actually a loan with bank fees.

Overall impression:

Initially, I thought that comparing this Deluxe version to the Standard editions of the other two really wasn't fair -- I was doubly disappointed when this program turned out to be the most confusing. Deluxe doesn't necessarily mean deluxe service.

TaxAct

Likes:

• It's free!
• The interface is familiar, similar to AOL or Word, with a row of clickable icons across the top.

Dislikes:

• The "payment" for this free software is clicking through several ads for the deluxe version, which costs $9.95. The option to upgrade was also mentioned whenever I tried to use certain tools or buttons that appear on the Standard Edition, but they only work on the Deluxe version. TaxAct also promotes its state income tax program ($12.95). I got their message, and it was annoying.
• When I wanted to go back to check or amend an entry, I got lost. Sometimes the program got stuck in a loop of pages, and I had to go back to the beginning to get back to where I was.
• It never asked me about the deduction for tax preparation fees.

Overall impression:

Not as jazzy and not as user-friendly as the other two. But it's free -- what more do you expect? If your return is straightforward, then this tax software can save you a few bucks. The deluxe version, which can handle more, would still be a bargain at less than $10.

To the victor belong the spoils

In the end, all the tax superheroes survived the onslaught of W-2s, home-sale documents and receipts. As the dust settled, one hero stood out clearly: TurboTax. This program looked good in its costume and held my hand through the process. Even though it is the most expensive, it is the least hassle for a novice tax preparer.

The others left me a bit more bruised and battered. The freebie TaxAct made a valiant effort, but wasn't quite up to snuff. Sadly, TaxCut was little better than a sidekick whose bumbling gives the good guy a headache.

As I get ready to mail off my taxes without the aide of a professional, I send out this little wish: I hope whatever magic these programs performed can withstand a potential assault from the greatest of threats -- an IRS audit. Eeek!

-- Posted: Feb. 17, 2000