| BUSINESSWEEK ONLINE : FEBRUARY 1, 1999 ISSUE | ||||||||
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| PERSONAL BUSINESS
Time to Give Tax Software a Try? Still tackling your taxes with your trusty calculator, scratch pad, and government-issue tax tables? Get this: Most of the 300-plus tax reforms enacted by Congress over the past two years are just now kicking in--bringing the Internal Revenue Service code up to a back-breaking 9,471 pages. So maybe this is the year to turn your taxes over to your PC by using one of the leading tax software programs. Yes, tax software has its limitations--particularly if you're a high-roller with complex exemptions, deductions, and shelters. In that case, you'll probably need to consult a tax adviser. But even if you seek professional help, using tax software can help you organize your return beforehand. That way, you pay for just the advice -- not the time it takes the pro to sort through your receipts. The enhancements to the two leading programs--Intuit's TurboTax and Block Financial's Kiplinger TaxCut--are more evolution than revolution. There is a third entrant this year--2nd Story Software's TaxACT '98, a budget-priced program that lacks the depth of the leaders. TurboTax and TaxCut added a few features based on the new tax laws, including built-in calculators that help you determine whether you'd benefit by opening or converting your existing individual retirement account to a Roth IRA. Each is better than the Roth calculators on the Internet. Most Web versions were created by mutual fund companies or brokers keen on selling Roths, and thus are biased toward conversion. TurboTax's Roth calculator appears only in the higher-priced deluxe version. FEWER QUESTIONS. Intuit and Block Financial poured their resources since last April into simplifying the arduous task of data entry. The goal was to weed out hundreds of customary questions that don't concern you, thus sparing you from answering whether you have farm income, gambling debts, or are eligible for the earned-income tax credit. Nonetheless, if you're a veteran filer familiar with taxes and software, TaxCut is your best option. Its new interface is a model of simplicity, with the number of categories cut to three: prepare, review, and file. But there's a lot of power hidden beneath the hood. The big ''Navigator'' button yields a pop-up menu that lets you tool around the program at will. And TaxCut reorganized its jumbled ''help'' feature to make it easier to research thorny questions, though the dry answers often appear lifted from IRS manuals. In a concession to the 25% of users who ignore the Q&A process and simply fill out the onscreen IRS forms, TaxCut created a new ''Fast Forms'' feature. Fast Forms does require you to answer a brief Q&A, but then it gives you just the forms you need, and in the right order. That lessens the risk that entries in one form don't carry over to the others properly--something still more apt to happen in TurboTax. If you're a novice who would benefit from extensive handholding, TurboTax is your program. The new version adopts an Internet-style interface that rivals the busiest Web page you've ever surfed. TurboTax created a ''Topic List,'' for example, that shows every category ahead and behind you. Another Web touch is the more than 2,000 FAQs, or frequently asked questions, lining the right side of each screen. One such query: ''I own a home. What can I deduct?'' A simple click takes you to the relevant help screen, where you'll find answers in plain English. Novices will appreciate the clarity, but seasoned filers will be annoyed by the clutter. ALL IN ONE. Still undecided? This year, price may be the tiebreaker. In its $39.95 deluxe version--which is often discounted to $29.95--TaxCut gives you the requisite federal program, plus software for all 44 states with an income tax. TurboTax charges $49.95 for its deluxe version--though store prices are generally more like $30--and $27.95 for each state program. So if you're like many users and filing not just for yourself, but for your college-age kids or elderly parents, preparing more than one state return could easily drive your tab with TurboTax above $100. That's not a huge sum when it comes to your taxes, but why spend more than necessary? By Dean Foust EDITED BY AMY DUNKIN _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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