Other Online Tax Options
Editor's Note: As prominent a place as both Intuit's TurboTax and H&R Block's TaxCut enjoy, they're not the only places where you can prepare your taxes online. Several other alternatives exist that any Mac user can take advantage of, using either Safari or Firefox.
Our colleagues at PCWorld.com have reviewed five online tax preparation sites, including TurboTax and TaxCut. Since Macworld has its own reviews of TurboTax and TaxCut for online, we wanted to include reviews for three other services--TaxAct, CompleteTax, and TaxBrain--so that you can get a full picture of the online options available in advance of the April 15 tax-filing deadline.
2nd Story Software TaxAct Ultimate
At US$10 for a federal return under the Deluxe version and about a mere $17 if you upgrade to TaxAct Ultimate (federal and state), 2nd Story Software's TaxAct is a real steal. At that price, customers can usually expect little more than basic entry forms, but with its good navigability and ample instructions, TaxAct offers huge bang for the buck.
As I worked my way through my test return, tabs across the top made the crucial act of backtracking easy, and the refund ticker kept me updated on how much Uncle Sam was going to either cough up or wring out of me. You can import W-2 forms electronically if your employer is hooked up with W-2 eXpress, an Equifax-owned company that provides W-2 forms for some businesses. TaxAct can also import investment-transaction information from the GainsKeeper financial services site.
A good piece of tax software doesn't just tell the user how to make entries; it makes an effort to actually advise the taxpayer. That's one reason TaxAct is one of my favorites. For example, instead of just telling me to enter my IRA contributions for the year, TaxAct advised me that the contribution limit on traditional IRAs may be different than the Roth IRA limit. For those pondering opening or contributing to an account by April 15 (IRA contributions made by then can often be counted as 2008 contributions), little pieces of advice like that can affect the bottom line.
When I indicated that I had sold a house during the year, TaxAct did me the favor of saying up front that the loss on the sale wasn't deductible; other sites made me go the long way around the block by asking for pages of information and then breaking the news. TaxAct also noticed that my Social Security and Medicare withholding amounts weren't the right percentage of my wages, and it noticed that I didn't enter any property taxes even though I owned a house.
The main help section, called TaxTutor, is fueled by famed tax-guide publisher J.K. Lasser, and those interested in reading chapter-and-verse rules have easy access to the actual IRS form instructions. New this year is the Donation Assistant, which finds the resale values on 700 items that you might have donated to charity this year. The module is very similar to TurboTax's ItsDeductible module, but be aware that the categories and values aren't the same (for example, a hardback book in good-but-not-fabulous condition warrants a $1 deduction in TaxAct versus $2.50 in TurboTax--not a big difference, but it adds up quickly if you've cleaned out the attic).
Don't get me wrong; TaxAct has some flaws. For example, the talking heads who appear in videos to offer guidance are basically useless, and the layout of the manual W-2 entry form seems like it's begging people to make a mistake. The sales tax deduction section also has room for error; I indicated that I lived in a state that doesn't impose a sales tax, but TaxAct still let me input a sales tax rate (which I made up; many will be tempted to take a similar step, given that the site doesn't offer local rate tables). Two screens later, it simply told me that it was better to deduct the state tax withheld on my W-2.
PC World's Bottom Line: A super deal for people who don't need the depth of help and advice in TurboTax, or the human backing of TaxCut.
CCH CompleteTax Premium
As a site for preparing your tax return, CCH's CompleteTax is a lot like TaxBrain, but at half the price. CompleteTax Premium is best suited for people who have a solid working knowledge of taxes and are confident preparing their own returns. Novices and worriers may find themselves taking longer than they would with other sites because they'll likely have to do more research to understand many of the questions they're answering--CompleteTax doesn't place very much instruction or guidance on the questionnaires themselves.
This isn't to say that CompleteTax isn't worthwhile--it just has its niche. For instance, though the site design has gotten sleeker and more sophisticated-looking since last year, it still has a lot of white space and a sterile feel. Clearly, when it comes to taxes, function is more important than form--but some users may balk at the no-frills look and the lack of hand-holding guidance.
Nonetheless, the tabs across the top are very good for navigation--it was fairly easy to jump around to different parts of the return. When you're not sure where to go, the search tool is helpful: When I couldn't figure out where to enter student loan interest, typing a few keywords into the search function of the help column (on the right side of the screen) quickly produced what I needed to know.
There was little up-front assistance on more complicated matters such as determining how to classify a stock sale or what may be included under "other deductible expenses," though digging through the site's Tax Guide 2009 answers many questions if your eyes don't glaze over first. Users who scour the help section and still have questions will have to swallow a $5 charge just to chat online with a support person.
CompleteTax can import W-2s from W-2 eXpress, ADP, and Ceridian, which saves time. The site offers a W-2 input screen that, of those in the services reviewed, looks the most like an actual W-2 form, which considerably reduces the chance for keying in errors if you must enter the information manually. Other sites should take a cue from CompleteTax in this regard.
Overall, sophisticated users will probably do just fine with CompleteTax and should take a look at it if they're also considering TaxBrain, but the rest of us will likely have a harder time. At $30 for a federal return and $20 for a state one, CompleteTax is fairly priced.
PC World's Bottom Line: This site offers a fairly priced choice for tax-savvy filers who don't need much help.
Petz Enterprises Taxbrain 1040 Premium
If you live what the IRS considers an uncomplicated life and you just want to crank out your return rather than try to understand why the numbers are what they are, then the TaxBrain tax-preparation site will probably get the job done.
TaxBrain's questionnaires (with a bigger font this year) allow you to answer several questions on one screen, saving time and making it easier to navigate or start and stop than on some of the other tax-prep sites.
Green checkmarks helped me see where I was in the overall process, and at the end TaxBrain offered the rare treat of letting me see my completed 1040, as well as my Schedule A and Schedule D before I paid--something other sites I reviewed don't permit.
TaxBrain still cannot import W-2s (the manual entry form is good, though, and TaxBrain can import investment transactions from GainsKeeper). It also has not installed a refund ticker to keep you posted on what you're getting back (or what you owe) as you make your way through the process.
Independent types might not mind that TaxBrain seems to have de-emphasized its help offerings this year. Its interface no longer has a column with links to the Live Chat function, important support pages, FAQs, or prior-year returns. (These items still exist; they're just not as obvious anymore.)
I am a big fan, though, of that Live Chat function; whereas most other sites either require you to call during bankers' hours or worse yet, to e-mail and in some cases pay for the help, TaxBrain lets people like me, who want to talk to someone now, get some attention. That's exactly what I did with "Jacob" one day, though in the end we never did figure out why the site kept saying "Invalid Currency" on one of the itemized deductions pages.
In most cases, the "More Info" link next to many of the input boxes is your best friend when it comes to searching for instructions with TaxBrain, but it's a hit-and-miss aid. For example, when I needed help entering information about the sale of a house, More Info did a great job explaining that real estate commissions were considered part of the selling expenses, but in many cases it only offered broad advice. When asked if I'd like to deduct "certain legal and accounting fees," I was hard-pressed to find a definition or list of what exactly counted.
Alternatively, a tiny "Help" link will redirect you to a separate site that offers more IRS instructions but little strategic advice. This just-tell-me-the-number-and-I'll-tell-you-what-you-owe approach may turn off some users.
Overall, TaxBrain is decent, but it has relatively high prices ($70 for a federal return, plus $30 for a state one), compared with other tax-prep sites.
PC World's Bottom Line: TaxBrain gets the job done, but it's way overpriced.