Online Tax Prep: An Upgrade Year
TurboTax.com, CompleteTax, Taxcut
Here are my evaluations of the individual sites.
TurboTax.com: Still King (Total Cost: $45)
Intuit's TurboTax Web interview is now identical to the company's top-rated shrink-wrapped software interview. There's even a version of Intuit's ItsDeductible deduction management software included in the Web interview. TurboTax.com charges $20 for the federal return and another $25 for the state.
Like several sites this year, TurboTax provides excellent multilevel tabbed navigation: Top-level tabs let you choose the broad area you wish to work in (personal information, income, deductions, and so on); subtabs (which also appear in CompleteTax and TaxCut) identify specific topics within the top-level tab; and checkboxes or radio buttons then bring you to specific screens.
TurboTax offers additional navigation options. You can select items from the list of form categories. If you can't decide which to select, click the Walk me through all button to get the full interview. Or if you know what you want to do but don't know where to do it, click Where do I enter?
With its elegant and economical design, strong online help (including all IRS tax publications, a significant video library, and its own tax help), and an interview that goes into the depth any particular tax situation requires, TurboTax.com still ranks number one among the tax prep Web sites.
CompleteTax: Most Improved (Total Cost: $35)
CCH's CompleteTax interview rates as most improved from last year's version. One new and unique feature of this $35 ($25 federal, $10 state) service is its treatment of investment income, capital gains, and margin interest in a single interview topic. (Those who have had to hunt around for the margin interest deduction will thank CCH for this.) And its dependent status questionnaire is the best of any I've seen. Unfortunately, if you earned income in two states or need to file a nonresident state tax return, you can't. CompleteTax does not include that feature with its state products.
CompleteTax also differs from the others in that it sometimes adds new top-level tabs, depending on how you answer interview questions. For example, you won't see the "investments" tab unless you say you had investments. The state tab is shown only once you've said you want to submit a state return.
Using more tabs this way means there are fewer choices consigned to checkboxes. Checkboxes limit the interview but the interview itself remains linear once you've begun. Tabs let you jump around to different parts of the return whenever you want. This will appeal to those who like to make new entries as new tax documents arrive.
Others may find that the virtues of CompleteTax's user interface are largely negated by the product's many annoying quirks. For example, you can't enter a number that includes a comma: Typing $1,234.56 will produce an error message and require you to retype the number without the comma.
When you've finished the "dependent status questionnaire" you still must enter the result on the form by hand; the software doesn't do it for you. Sometimes CompleteTax wants dates entered in MM/DD/YYYY format and other times it wants MM/DD/YY.
And the asset classes in the depreciation schedule are too broad. I was left guessing whether cell phones belonged in "typewriters, calculators and photocopiers" or "business equipment and furniture." Worse, the online help was no help at all in sorting out where my newly purchased cell phone belonged in the depreciation schedule.
TaxCut: Not as Good as the Box (Total Cost: $45)
H&R Block's Web version of TaxCut ($20 federal, $25 state) includes even more second-level tabs than the company's shrink-wrapped software. The TaxCut.com interview style is also very similar to that of the desktop software. But using TaxCut online this year felt like using the shrink-wrapped product last year: Too many screens ask one or two simple questions, wasting desktop real estate. It looks as though the folks who redesigned the software user interface didn't bother to keep the Web site designers in the loop.
TaxCut cannot prepare your online return if you made contributions to a health savings account, a medical savings account or other tax-advantaged healthcare account. An H&R Block representative says the site should support these contributions next year; in the meantime, the company suggests that people in this situation use an H&R Block tax professional instead.
This contributed to my perception that H&R Block is trying to push people to either its shrink-wrapped software (which handles HSA and MSA contributions just fine) or its storefront service. In fact, when you exit the Web site, one of the options presented is "Let an H&R Block tax professional complete my taxes." (To be fair, you can also choose "Come back and finish my return" or "Prepare my taxes another way.")