2nd Story Software TaxAct Ultimate (2009)

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.

--Tina Orem