This year, more than any other, you want to save every penny you can on taxes. One of these top-notch tax packages can help.
Although doing your taxes is never an enjoyable experience, the good news is that the 2008 tax code includes changes that may save you money. Some new perks include a new first-time homebuyer credit, an increase in the standard mileage rate, and lowered taxes for many investors, to name a few. The better news is that the new editions of the top tax-preparation packages include these changes. To save you even more money, it turns out that choosing one of these suites may not cost you a dime. A partnership between the IRS and the Free File Alliance LLC (an organization of several private-sector tax software companies) provides free access to online versions—minus some of the more advanced capabilities—of the companies’ tax software. If you meet the criteria outlined at IRS.gov, you’ll be able to prepare and file your taxes online at no charge through the IRS Free File program.
If you don’t qualify, or want the extra features, you have a lot of options. Overall, the three tax packages we review have not changed drastically. Those new to tax-prep programs will find what veterans already know: These programs are easier to navigate than most software. All the products reviewed here use a question-and-answer interview approach to collect the necessary personal and financial information from you. They also break the 1040 down into manageable bits and take you through them in a pretty natural order. They have you provide personal information, and then launch into sections where you enter your income and deductions. And though you can often file federal taxes for free, you usually have to pay for a state filing (typically less than $20). In the long run, the money is well spent to get the highest refund (or lowest payout) and avoid an audit.
TaxACT 2008 Deluxe Edition
For years, TaxACT has been the tax program of choice for the budget-conscious. It lacks some of the bells and whistles of the premium services but is significantly cheaper than TurboTax and TaxCut. In the areas it covers, it’s a strong competitor. The biggest change this year is the addition of a tool to help you determine the fair market value of non- cash charitable contributions. There’s also a new customer import report, and overview screens for income, deductions, and credits. The average filer will probably want more help, but if you can handle 1040s and other forms without the additional sup- port, this is the app for you.
On pages that require data entry, TaxACT uses a split screen. The question-and-answer fields are positioned above, with several help options in a tabbed window that can be toggled below. Neither TurboTax nor TaxCut employs a split screen; they position help tools elsewhere.
With TaxACT, the tax interview questions are thorough and clear, but the program lacks some of the navigational guides that make TurboTax and TaxCut superior. Nonetheless, TaxACT’s interface is simple, fast, attractive—and works in much the same way as those of its competitors. For the cash- strapped, TaxACT is certainly an acceptable option.
H&R Block TaxCut Premium
Year after year, H&R Block continues to publish an exceptional personal tax-preparation program with excellent help tools and audit support. This year, the big news is a $20 price drop from last year (with the package I reviewed, Premium Federal + State + E-File). With TaxCut you get one help session with an H&R Block tax professional covering one topic, audit support, and the additional programs WILL- Power and Deduction Pro. Not even TurboTax can match H&R Block in terms of sheer bang for the buck this year. But is the core TaxCut program the best personal tax-preparation program for 2008?
Not quite. Given that the old paper and snail-mail system still works just fine, the most important thing a software and e-filing approach can offer (besides a faster refund) is ease of use, and that means a better UI and better help. TaxCut trails TurboTax a bit on both counts. For example, TaxCut’s interface has too much white space, which means extra pages and tedious extra mouse clicks to go from page to page. Also, TurboTax puts more help resources within reach during the process. However, TaxCut oversees the review of your return just as well as the competition. Though TaxCut is an excellent bargain and a solid package, TurboTax is still the best choice if you want the most thorough, well-guided, elegant tax- preparation experience available for the desktop.
TurboTax Premier 2008
TurboTax and H&R Block’s TaxCut wage a mighty battle in the premium personal tax-preparation soft- ware market every year, with TaxACT mopping up the more budget-conscious and knowledgeable filers. This year, the outcome is the same as in recent years: TurboTax is our Editors’ Choice. Though TaxCut wins points for its more reasonable pricing and remains a formidable foe in terms of functionality, it hasn’t evolved as skillfully as TurboTax has. Both premium apps continue to do a commend- able job of exploding the 1040 into palatable chunks that can be more easily digested and processed, but TurboTax—the more versatile of the two, especially in the Premier version—takes apart complex topics and eases you through them with a greater variety of at-the-ready guidance.
TurboTax’s designers have put together an application that’s—arguably—as elegant and deft as any in the universe of desktop productivity applications, though it runs a bit more slowly than the competition. Granted, a program’s interface is just window dressing if it isn’t backed up with solid innards, but TurboTax has that in spades, too. TaxCut’s look is old in comparison, and that detracts from what is a very capable program. TurboTax does a better job of using screen space, whereas TaxCut displays too much empty real estate, which leads to more clicking. TaxACT’s UI falls somewhere in the middle— better overall than TaxCut’s, but not in the same league as TurboTax’s. This package saves time by letting you import W-2 info directly from employers who use ADP, Paychex, and ProBusiness, as well as import tax-related income and expenses directly from Quicken 2007–2009 and major financial institutions. In a nutshell, TurboTax Premier 2008 pro- vides the most cohesive, intuitive, well-designed tax-preparation experience out there, with more understandable and accessible help than the com- petition offers.
Source: Kathy Yakal - PC Magazine