Personal Software
Most of us seem to put the dreaded tax chore off untill the last moment and then find ourselves faced with incomprehensible IRS forms, shoeboxes of receipts, check registers, antacids and headache pills. The return must be filed by Monday, April 16, 2007. (You can file an extension to delay filing to August 15, 2007. But payment, without P&I, is due April 16, 2007).

Fortunately, help is on the way in the form of a couple of good tax preparation programs from Intuit – TurboTax, H&R Block – TaxCut, and 2nd Story’s TaxACT. This review covers the two most popular programs.

In addition to well-crafted interfaces and good online help, both TaxCut and TurboTax include Microsoft’s Internet Explorer Web browser for seamless integration with the World Wide Web for updating. An Internet connection is required to obtain updates as the software is released in December, before the IRS has completed all the forms, etc.

TaxCut Even if you think that you need the skills of an experienced CPA in the preparation of your return, either of these programs will help you to become better organized and possibly keep accountant fees to a minimum.

I found the following software tax packages for the 2006 tax year: TurboTax Basic, TurboTax Deluxe, TurboTax Premier, TaxCut, TaxCut Deluxe, and TaxCut Premier, for Windows 98, 2000, ME and XP, and MacPowerPC Processor. Most of the local office supply stores and other retail and software outlets stock the software.

TaxACT There are free tax preparation programs on the web. Go to a search engine and enter “free federal income tax programs”. TaxACT is a good free program. The program is easy to use and includes forms most tax payers require. A paid version is also available for more complex returns.

Features
TurboTax Basic is the basic package needed to file all individual returns including professional or sole proprietor, and includes Internet Explorer 6 on the CD. TurboTax Deluxe includes all the features of TurboTax Basic and one free e-file (after rebate). Plus extra help for deductions – the deduction finder (library resources, tax planner, on-screen references and IRS publications, video advice and a financial planner). TurboTax Premier includes all the feature of TurboTax Deluxe plus help for investments, complex taxes, Schedule C business and Rental Property.

TaxCut Deluxe is almost identical to TurboTax, including Internet Explorer 6 on the CD. TaxCut Deluxe includes all the features of TurboTax Deluxe-- tax tips, on-screen IRS instructions and publications. All the programs will import financial data from most popular financial programs, and include details on preparing a return, reviewing a return, electronic filing (e-file) via a second party, planning for next year, plus help locations.

Installation
All packages were easy to install following the given directions. TurboTax Basic requires 175 MB of disc space without the installation of Explorer. TaxCut Deluxe requires 170 MB of disc space without the installation of Explorer

Manual

Both TurboTax and TaxCut include an on-screen user guide with typical screens of the described function. All the usual files, edit, forms, tools and help are in the tool bar.

General Overview
All of the packages have an easy step-by-step program to walk the taxpayer through the various steps required to do a return. The experienced taxpayer may prefer the forms method after completing a basic information page. The taxpayer selects the form and fills in the required information. Some have supplemental sheets for recording information, which is then transferred to the form. Help is available from any screen. All programs import from Quicken and Microsoft Money.

Details
The latest tax changes are incorporated in the packages (at the time of release). Each package allows the taxpayer to enter data on various forms after completing the basic information sheet. The return is then saved. Be sure to give the file a name if more than one return will be prepared using the same program. The programs may be used whether you are the organized type or the shoe box type. The shoebox type should organize the various types of entries first.

Printing
TurboTax and Tax Cut allow you to print an IRS return or select a form or schedule to be printed. The current computer printer setup does not have to be changed. Check to be sure you have the latest updates prior to printing the return for filing. Print a return for filing and a return for your records. The record return will contain detail sheets. I have no experience using these programs to e-file.

Summary
The Basic package of TurboTax or Deluxe of TaxCut is more than adequate for most users. The upgrade packages are great for users who like the “bells and whistles” that include lots of helpful literature, suggestions, etc. The street price for the basic packages is around $20; TurboTax Deluxe, and TaxCut Premier are about $40. Each company has an extensive business program for about $70 +. A new program is required for each tax year. TurboTax and TaxCut sites each sell the programs and it will cost more than the local stores.

Helpful Hints: I suggest the return be prepared in all caps since this is preferred by the IRS. All returns are mathematically corrected based on the input data. Most of programs have promotion tie-ins, such as a money program, anti-virus, etc. Read carefully the conditions before buying the program.
IntuitTurboTax, for more info go to: www.turbotax.com/support.
Block TaxCut, for more info go to: www.taxcut.com,and for TaxACT, go to: www.taxact.com.

Milton Gugenheim is a HAL-PC member and an AARP Tax Aide Instructor and Local Coordinator for over twelve years. He may be contacted at mgug@hal-pc.org.