Tax Software for the 2000 Filing Year
If you’re a U.S. resident, the 15-Apr-01 tax date is most likely starting to weigh on your mind. Fortunately, this year you have one extra day (since the deadline falls on a Sunday) and two options for filing your tax return without engaging the services of a costly accountant. H&R Block’s Kiplinger TaxCut Deluxe and Intuit’s TurboTax for Macintosh (formerly MacInTax) are the two contenders for the Mac-minded.
Although you may question the sanity of someone who voluntarily chose to do his taxes twice, my situation – filing as a single individual with enough odd deductions and credits to require the standard IRS 1040 form – proved to be a good test of how each program dealt with an average situation. Both products performed the job of preparing taxes admirably and calculated the same refund amount. However, the programs’ interfaces and processes made each shine in different areas.
Installation and Startup — Installing TaxCut and TurboTax was painless, with both programs offering a brief introduction of features upon initial startup. TaxCut then cut to the chase and encouraged you to download any available update, while TurboTax waded you through a few sales pitches before doing so. In this case, both programs had updates that were comparable in size. TurboTax downloaded its update from within the program and automatically ran the update, though the "few minutes" claimed as the download time was actually a little over half an hour on my 56 Kbps Internet connection – with no download progress bar to indicate status. In contrast, TaxCut launched my default Web browser and took me to a page with links so I could download and install the update manually; also included was a list of update changes and federal calculation alerts. I preferred being allowed to download manually and run TaxCut’s update over TurboTax’s vacuous automatic download.
No Deposit, No Return — TurboTax can import static data from last year’s MacInTax return, including your address, financial institution information and employer information. Though I couldn’t test this, TaxCut can also reportedly import from a previous year’s TaxCut return. Importing data from Quicken was similar in both programs and can be helpful if you download mutual fund and stock information into Quicken. Be careful, though, because Quicken exports every tax-related transaction without summarizing and includes unnecessary details such as check number, date, etc. I found it preferable to summarize and enter transactions myself.
Shake Your Money Maker — Unless you’re comfortable wading through IRS forms, it’s likely that you’ll use the programs’ interview processes to enter information. Essentially, the programs ask you questions (for example, "Do you need to report farm income?"), and you answer and fill in the amounts. For the most part, the interview interfaces of TaxCut and TurboTax show numerous similarities. Both present relevant FAQs on the right sidebar, quick access to equally relevant help screens, and in-line informational videos.
TaxCut’s overall look is less gaudy and less animated than TurboTax, which also includes numerous offers from partners (thankfully, these can be turned off from the EasyStep menu). Both programs give you instant access to a tax summary, where you are in the interview, and the option to jump to other sections of the interview. TaxCut made these features, along with access to the forms, much more obvious than TurboTax.
Both programs include a review process at the end of the interview that looks over the information you have entered. Both warn you of missing or invalid data, possible audit flags, items you may have overlooked, and they offer suggestions for saving money on your tax return. I particularly liked TaxCut’s capability to mark an item as tentative by clicking the entry-info button (a green "i" next to an entry field). Any fields marked as tentative then show up in TaxCut’s review as a warning; you can easily jump to that field to edit the information once you have your updated numbers. Like TaxCut, TurboTax allows you to edit fields it flags during the review process.
Take the Money and Run — You can spend hours using each program, but at some point you have to send the results to the IRS. You can use either TaxCut or TurboTax to file your return electronically over the Internet (e-file), which requires a fee paid to the clearing house that processes the return (of course, you can print and mail your tax return for free). I was unable to find a way of submitting electronically without a clearing house, but both TaxCut and TurboTax include one free e-file (after rebate). TaxCut’s clearing house charges $12.95 and TurboTax’s clearing house charges $11.95. If you owe additional taxes, the IRS will withdraw funds on 16-Apr-01. If the IRS owes you a refund, they will deposit funds into your bank account approximately 10 days after accepting your return. If you request a check, it will take 30 days to arrive.
After filing your return, TaxCut and TurboTax both offer planning features such as a comparison of your return to U.S. averages, planning for next year’s filing, estimating next year’s return, and adjusting your W-4 form (which dictates taxes withheld from your paycheck by your employer).
Both programs make short order of preparing your tax return. Watching every video and checking help and FAQs as I proceeded through the interviews took about 90 minutes to prepare my return in each program. At least to my non-accountant eyes, both programs produced identical IRS forms, summaries, and tax returns.
The deluxe versions of TaxCut and TurboTax include a free (after rebate) version for state tax returns, available as an Internet download. TaxCut had 26 state programs available and TurboTax had 45 state programs available; I did not evaluate these state tax return programs. TaxCut Deluxe sells for $20, while TurboTax Deluxe costs $50 (a standard version with no state tax return support is available for $30).
Overall, I liked TaxCut for its price, no-frills interface, and its capability to mark an entry as tentative. TurboTax had an elegant interface, but it is difficult to justify the price difference unless you need a state version not offered by TaxCut. TaxCut also works on older Macs – at minimum, it requires only a 68030-based Mac with System 7.1 versus TurboTax’s requirement of a PowerPC-based Mac running Mac OS 7.6 or higher.
[Jack-Daniyel Strong is a Geographic Information Systems (GIS) Technician for the County of Spokane and a student of Eastern Washington University.]