TaxCut, TurboTax Offer More

In the past, selecting a tax program was a lot like choosing an accountant: Your options were limited and invariably cost more than you wanted to spend. But this year, things are different. The top tax packages, Intuit's Quicken TurboTax and H&R Block's TaxCut, face new challengers: Microsoft Corp.'s first tax product, TaxSaver, and 2nd Story Software's TaxAct.

The products are easier to use than ever, and in some cases less expensive.

They all expedite refunds by letting you file electronically, and one vendor even lets you get a cash advance within two business days. Web-based versions of TurboTax and TaxCut deliver many of the features you get with the shrink-wrapped versions -- at half the price or less.

Missing the Cut

Microsoft's entry into the tax arena, TaxSaver Federal Deluxe, makes a flawed debut, but the product has promise. TaxSaver shares the attractive, Web-style interface of Money, Microsoft's personal finance package. And importing tax data from Money into TaxSaver is exceptionally easy. (TaxSaver also imports data from other personal finance programs.) You get the same features offered by the competition: instructional videos, tax guides, Web links and a choice between using an interview-style approach or working directly on electronic tax forms that perform the calculations automatically.

Unfortunately, TaxSaver offers no state editions. So if you use it to prepare your federal return you'll have to download your state income tax forms, fill them out, and perform your own calculations to pay those taxes. This is the sort of work tax software ostensibly helps you avoid. Moreover, at a street price of US$45 ($25 after mail-in rebate), TaxSaver is no bargain. Comparably priced editions of TurboTax and TaxCut include at least one set of relevant state tax forms. TaxSaver will be available in a scaled-down version for $20, which is expected to be comparable to competing products.

Cheaper, Easier

Intuit's Quicken TurboTax, historically tax software's top dog, looks stronger than ever this year thanks to across-the-board price cuts and a slick new Web interface. This year, TurboTax Deluxe costs $30 ($20 less than last year) and includes mail-in rebates for one free state edition and one free federal electronic filing.

TurboTax looks much tidier than it did last year. Among other things, Intuit replaced the navigation bar (which occupied much of the left side of the screen) with a nifty pop-up window. TurboTax also adds a new Life Events planner for users anticipating the birth of a child, the sale of a home, or other major occurrences with tax implications. And Quicken users can export TurboTax data to their personal finance program to assist in financial planning after tax time.

Intuit still offers the widest range of tax-related products: Besides the flagship Deluxe edition, there's a $20 basic edition without the videos, tax guides, and state and e-filing rebates. Intuit's TurboTax lineup also includes a $70 Home and Business edition for unincorporated businesses, a $90 Business edition for partnerships and corporations, and the $90 Quicken Suite 2000 bundling TurboTax Deluxe with Quicken 2000 and Quicken Family Lawyer. All of the products except TurboTax Deluxe sweeten the deal with $10 to $20 mail-in rebates.

Following Intuit's price cuts, H&R Block Financial's Kiplinger TaxCut Deluxe Multimedia is no longer decisively cheaper, as it was last year. And it's the only deluxe package that charges a $10 fee for each tech support call. But TaxCut Deluxe, which costs $40 in stores but $25 after mail-in rebate, offers several unique features. First, you can download as many state editions as you want for free, which makes it a much better deal for the small minority of people who file in multiple states. (TurboTax Deluxe users get the first state version for free after a $28 rebate, but then must pay $20 for each additional state return.)In addition, if you need a refund fast, you can't beat Block's new Electronic Refund Advance service. For $20, you can receive up to $5000 of any refund within two business days after the IRS accepts your electronically filed return. That substantially shortens the usual two-week waiting period before you get a direct-deposit refund from the IRS. The same service is available with the $70 TaxCut For Your Home & Business edition ($50 after mail-in rebate), but not with the $15 basic edition ($8 after mail-in rebate).

Cheapest Option

For even lower-priced tax software, consider 2nd Story Software's TaxAct, a 5M-byte download that delivers everything the basic versions of TaxCut and TurboTax do -- and the standard version is free. You can print and send in your finished federal return, or pay $8 to file one electronically.

This year, TaxAct also offers a $10 Deluxe edition, which bolsters help, adds planning features, supports up to five returns, and includes the capability to import data from TaxAct 1998. Under the name TaxAct Plus, CD-ROM versions of the Deluxe edition will be available at retail stores for $10. TaxAct state editions cost $13 each, far cheaper than state editions to accompany basic versions of TurboTax and TaxCut.

Which One's for You?

If your return is simple and you don't need much advice, the free version of TaxAct is your best bet. If you use Microsoft Money and live in a state that doesn't impose income taxes, consider using Microsoft's TaxSaver for your federal returns. For the best deal on a full-featured product, TurboTax Deluxe is a solid choice. And finally, if you file in several states or want a return ASAP, TaxCut is your best option. Choice is a beautiful thing.

Why Don't We Do Our Taxes on the Web?

If convenience and a low price are more important to you than lots of advice and handholding, consider a Web-based tax prep program. This year, H&R Block will introduce its first Web-based offering, becoming the second major vendor to offer an online service. True, Web-based software doesn't provide all the features of deluxe shrink-wrapped packages, but the latest editions should be more capable than ever and at most will cost half as much as their prepackaged counterparts.

Neither nor TurboTax for the Web, the online version of Intuit's popular tax package, were available for testing at press time. But vendors say the products will closely resemble their desktop counterparts. Both and TurboTax for the Web will store your return on secure servers. This is safer than sending it back and forth over the Internet to the Web program when you work on your taxes. And you can try out the software for free: You pay only if you decide to file electronically or print a return.

When a Web version of TurboTax launched last year, it was the most full-featured Web-based program. Pricing details were not set at press time, but this year's product is expected to include at least one new feature: It will permit you to download finished tax forms in Adobe Acrobat .pdf file format, simplifying the process of saving and printing returns. promises most of the features of its shrink-wrapped sibling TaxCut.

You can also access the service via MSN's MoneyCentral. Filing or printing a federal return costs $10; state returns cost $5 each. As with TaxCut, if you file electronically, you can pay $20 to get an advance of up to $5000 on your refund two business days after the IRS accepts your return.

For more on Web-based options, check out the IRS's Web site (

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