capsule review

Tax-Preparation Software

At a Glance
  • Intuit TurboTax Premier

    Macworld Rating
  • H&R Block TaxCut Platinum

    Macworld Rating

It could be Americans' most dreaded task: filing taxes. Even if filing your taxes is simply a matter of filling out IRS Form 1040EZ, it can be a trial if you think maybe you should be using Form 1040; add investments, itemized deductions, self-employment, children, and property to the mix and you've got the makings of a nightmare. No wonder so many people run to their local CPA at tax time.

Now that tax-preparation software programs for the Mac—Intuit's TurboTax Premier Home and Business and H&R Block's TaxCut Platinum—are well established and available on OS X, we decided to put them through their paces using the ultimate test: real life. Because the experience of tax preparation is entirely subjective, Macworld asked four people with very different tax situations—from a simple 1040 to many various forms and tax credits—to use both programs to calculate their actual 2002 tax returns. The reviewers didn't always agree; two filers with more-complicated tax situations, freelance writers Jeffery Battersby and Scott Love, got the sweats just thinking about using either of these programs to actually file their taxes and ran off to their accountants, while the two with simple returns, Macworld senior editors Philip Michaels and Jennifer Berger, decided that of the two programs, TurboTax was the better choice.

Jeffery Battersby: Astounding Complexity

Once audited, twice shy—I have no problem admitting that I'm a timid tax filer. Schedule C, Schedule A, K-1, W-2, 1099, capital gains and losses, self-employment tax, child dependent care expenses; feel free to name an IRS form or deduction and, chances are, it's going to make an appearance somewhere in my tax return. It's this level of complexity that makes me a firm believer in tax professionals. And, after going a couple of rounds with both TurboTax and TaxCut, I'm a believer still.

Installation and Software Updates

Installing both of the programs was a snap, but when it comes to installing the updates that appear throughout the tax season, TurboTax is the hands-down winner. While TaxCut requires you to download and then install any new program updates, TurboTax's OneClick Updates feature makes the process completely seamless. I was also a little annoyed that TaxCut forced me to purchase, download, and then mail in a rebate form for my state tax program, especially since TurboTax allowed me to download my state program free of charge with no strings attached.

Importing Other Information

I don't do Quicken and neither of the programs would import any data from MYOB FirstEdge, the program I use to keep track of my business finances. And I couldn't import W-2 information because neither my wife's employer nor my own offers this option.

Interface Design and Interview Process

I don't think either of the two programs had a real advantage in this regard—but that assumes that I know enough about taxes to have a clear idea of what a bad interview might be like. Suffice it to say, both programs asked me enough questions to get me to enter all my financial data. Whether it was entered correctly or incorrectly is another question altogether. When it came to basic information, such as details from my 1099s and W-2s, both programs were great. But when it came to questions about child-care credits, K-1 income, home-office write-offs, or any other potentially ambiguous aspect of the tax-calculation process, I was often flummoxed.

Ease of Use

Neither of the programs educated me sufficiently or made me confident that I was assessing my situation correctly. No matter what, when dealing with complex tax issues, I always had the lurking suspicion I was making some kind of mistake. The end result? TurboTax said I had an overall federal and state tax liability of $2,700. TaxCut said I owed only a total of $255. That's a pretty significant difference, especially when neither of the programs flagged any obvious problems.

Extras (Videos, IRS Documents)

I found the TurboTax videos to be interesting but not necessarily enlightening. After looking at the first one or two I didn't watch any more. And were those IRS documents? They seemed more like Croatian engineering texts.

Filing the Return

I will definitely be visiting my accountant to file my taxes. With a $2,400 disparity between the two programs, it's pretty clear that I need professional help.

Technical Support and Customer Service

TaxCut's tech support was fast, attentive, and, except for the fact that I had to pay for the call, free. Unfortunately, it wasn't able to resolve a problem I had viewing the program's help documents. But I was told the problem should be resolved in a future update.

TurboTax's tech support was either expensive or online. I opted for the online, chat-based version and a representative came online within a matter of seconds. When I posed a question about fonts that weren't displaying properly, I was told to reinstall the program, which didn't solve my problem. Fortunately, the issue was resolved in one of the program's subsequent OneClick Updates.

Are These Products Worth It?

It takes me about 20 to 30 minutes to sit with my accountant and go over my tax information. Both TaxCut and TurboTax took me a minimum of two hours to enter all my information and then a paranoid hour or so to double-check to see if I'd entered all the original information correctly.

There's no question that using either program is easier than doing your taxes by hand, but if you have a complicated return, you're far better off paying a professional to handle your taxes. Unless, of course, dragging a box full of canceled checks and receipts to your local IRS office for an audit is your idea of a good time.

Philip Michaels: Simple Return with Freelance Income

Tax software is different from most other programs I use on my Mac. Unlike iPhoto, say, or even Word, where I'm happy to spend hours experimenting with each feature, when I use TurboTax or TaxCut, I want to spend as little time and energy as possible. I don't need a lot of features and extras to help complete the joint return for me and my wife; I just want something that accurately walks me through the process of filling out a 1040 with a Schedule C for my wife's freelance work so that I don't have to fear being thrown into leg irons by the IRS.

Installation and Software Updates

I agree with Jeff that TurboTax is the clear winner here. TaxCut's download process is unnecessarily inefficient and increases the chance of user error. And when you register the product, you have to navigate through several screens asking you for personal information, as well as an offer of a free EarthLink trial—and if you click by this page too quickly, you may find yourself signed up, as the preselected default response will will signal your acceptance of the trial. Even if you click on No, TaxCut will install an EarthLink Trial icon on your desktop that you'll have to trash. It left a bad taste in my mouth about TaxCut before I'd even entered one item off my W-2.

Importing Other Information

I used TurboTax last year, so it was extremely easy to import last year's data into this year's TurboTax return. TaxCut also handled this process with a minimum of fuss—when it's time to import data, you're able to choose whether to import from TaxCut or TurboTax. In scanning through the imported data just to check for accuracy, I found TaxCut's report view somewhat difficult to read.

While my payroll provider, ADP, prominently stamps its name on the W-2, I appreciated the TurboTax feature that allows me to use my employer's identification number to access my downloadable information—it made the process much easier.

However, I'm not sure that importing that information saved me a whole lot of time. I wound up double-checking each entry anyhow.

Interface Design and Interview Process

TaxCut did a better job of walking me through each part of my return. One area of tax preparation I've always felt ill informed about is itemized deductions: TaxCut's explanation of what does and doesn't qualify as a deduction was so clear, I was able to go back and adjust the deductions on my TurboTax return. TaxCut's Take Me To feature also makes it easy to jump around to different parts of your return; TurboTax has a similar feature, but it's not as elegant.

One knock against TaxCut in this area—when you launch the program, it doesn't automatically open your tax return. You have to open it through the File menu. TurboTax automatically opens the last return you were working on.

Ease of Use

Despite TaxCut's more helpful wizards and better interface, I have to give the nod to TurboTax for ease of use. TurboTax seemed to work better and more smoothly. My experience with TaxCut was riddled with technical snafus. I originally started my return on my OS X-powered desktop at work, but whenever I tried to download any TaxCut updates, I received a connection failure. When I tried it using OS 9, whenever I clicked on the More Info items throughout the program, I received a "Page Could Not Be Found" error message. The inability to use major features of TaxCut immediately disqualifies it in any ease-of-use showdown.

Extras (Videos, IRS Documents)

As you might have guessed from my less-is-more approach to tax preparation, I'm not all that interested in the videos and IRS documents. It's the basic functions, not the extras, that I consider when I want to go to buy one of these programs.

That said, since I've become somewhat dissatisfied with the annual panic over my taxes every spring, this year I paid extra attention to the planning features that come at the end of both programs after you've finished your return for the past tax year. I found TurboTax's tax-planning features to be more satisfying than TaxCut's—not by a wide margin and certainly not enough to alter my overall opinion about either program, but I was impressed with what TurboTax had to offer.

Filing the Return

I haven't filed my return yet. When I do, I'll mail it out. We all have our psychological blocks, and sending important tax documentation over the Internet is mine.

Technical Support and Customer Service

TaxCut's tech support was friendly and professional. It wasn't always helpful. I had a problem where the error-checking page wasn't rendering properly. TaxCut's tech support suggested that I update my Carbon Lib file—that took care of the problem. However, tech support was unable to help me solve the program's inability to use the More Info features on the OS 9 version of the product. As for the inability to download the TaxCut updates on my OS X machine, TaxCut tech support suggested this was a problem with the firewall on my end; my IT department responded that TaxCut's tech support was mistaken. Either way, I wasn't able to resolve the problem. Both of my tech-support calls to TaxCut were answered promptly, which is good, since TaxCut doesn't provide a toll-free number.

I can't speak to the quality of TurboTax's tech support because I never had a problem with the product that required me to use it. And for a program that I want to spend as little time as possible using, that's exactly how I like it.

Are These Products Worth It?

I'm not sure any do-it-yourself program will ever match the ease of handing over your tax documents and receipts to a trained professional. But since my return is pretty straightforward, I don't think I can justify the cost of hiring someone to do my taxes. In that case, then, it's absolutely worth it for me to pay a few bucks for a tax-preparation program rather than slog through my return using scratch paper and a calculator. And of the two Mac products, I found TurboTax the easier to use. It didn't exacerbate the pain I normally associate with filing taxes and walked me through the process in about two hours. TaxCut took a little longer, with much of that extra time spent troubleshooting and working around the program's assorted quirks—that's not how I want to invest my time.

Scott Love: Investments, Trusts, Self- and Other-Employed

I'll admit, I've always thought taxes were one of those problems in life you solve by throwing (more) money at them. Let me dump a disorganized folder of miscellaneous paperwork on someone else's desk, and a few weeks later tell me where to sign. I have a fairly complex situation with various investment accounts, trusts, and a non-U.S. citizen in the family. To boot, I'm both self-employed and a partner at a consulting firm.

I'm a total coward when it comes to money; however, I've always had this nagging sense of guilt for not being man enough to do my own taxes. Unfortunately, my experience with both TurboTax and TaxCut leaves me even more firmly committed to helping keep my accountant's BMW in good repair.

Installation and Software Updates

As Jeff and Phil said, TurboTax came out well ahead on this front: updates were automatic, and getting my state forms was a straightforward step in the process of beginning a new return. TaxCut's registration application unexpectedly quit on me during installation; updating was a more complex, manual process; and I was irritated by the EarthLink ads. Getting my state program required more digging than it had for TurboTax, along with having to purchase the state program and then mail in a rebate—for a download .

Importing Other Information

I don't use Quicken's tax features, so I didn't have anything to import. I also wasn't able to import my W-2 information because my payroll company wasn't one of the companies listed, but I do think entering W-2 info is a trivial part of the process.

Interface Design and Interview Process

TurboTax's interface seemed much cleaner to me, and followed a more logical one-thing-at-a-time approach. TaxCut put more text on each screen, which might be welcome save for the fact that these programs are meant to make doing taxes less complex. In both cases I was irritated with the QuickTime movies that were sprinkled throughout the process: I could read and skip information that didn't apply to me, but caution led me to sit and watch the movies in case I missed anything important.

Ease of Use

I found TurboTax easier to use than TaxCut. It held my hand through the process better, but both programs dropped the ball in the end.

Both were fine with the easy questions: straightforward W-2 information, interest earned from bank accounts, and so on, but neither gave me a clear understanding of what to do with my quarterly bonuses from consulting work. I called the tax advice lines for both programs and got completely different answers. I dug through help files and even braved the IRS Web site for assistance. Ultimately I ended up guessing. While the end result was completed returns, I was shocked to see that there was a difference of $3,500 between the two, further reinforcing my feeling of being lost in the wilderness.

Extras (Videos, IRS Documents)

The videos were unnecessary and didn't apply to me, and I couldn't make heads or tails of the IRS documents, but that's not the fault of these tax software packages.

Filing the Return

I'm going with an accountant.

Technical Support and Customer Service

Neither package's tax advice support solved my tax problems, but their tech-support lines were fine. TurboTax was more expensive than TaxCut, but I didn't run across any real technical difficulties, so this was a wash.

Are These Products Worth It?

Taxes are hard. The IRS speaks some obscure dialect of its own, and then it piles on math. Doing my taxes by hand would be a nightmare, so both applications are a big improvement there, but I'm still going with an accountant. An accountant may be fallible, but humans who make a living doing taxes are going to be better able to deal with any unusual situations. At the end of the day, that's what matters most: after I mail the return, I want to sleep easy.

Jennifer Berger: A Pretty Darn Simple Return

Doing my taxes is one of my least favorite tasks, which is why using my Mac to do this chore really takes the edge off. As the song goes, a spoonful of sugar helps the medicine go down. I have no good reason to hire an accountant, since all I needed to do this year was file a 1040 based on my W-2, report dividends from a money market account, take a credit for a job-related higher-education course, and see if my donations made to charity would help me out. Oh, and submit California state taxes. Basically, I want a tax-prep program that helps me through the process enough that I feel confident I'm not violating any tax laws, and a little entertainment never hurts. That's why I liked TurboTax so much better: it didn't rely on me to decipher taxspeak like TaxCut did, and it threw in short videos that explained the basics well.

Installation and Software Updates

My experience was no different from Jeff's, Phil's and Scott's in this regard. TurboTax did all the installation and updating for me, going to the Web when needed. Better yet, it confirmed that updates had been successfully installed. TaxCut complicated both processes unnecessarily.

Importing Other Information

Like Phil, I was able to import my previous year's return. I used TaxCut last year, so this worked well when I tried this year's TaxCut program. The import saved me some time because I was able to update last year's information, but this was easier said than done. The program didn't tell me what to do with the information once it was imported; it just presented me with my W-2's fields compared with the amounts from last year's return. This window's design was not very smooth, either; when I clicked on a field lower on the screen, it suddenly and jerkily appeared at the top. Later I found out that I could have filled in this information using the interview process. TurboTax will import TurboTax files only, so it was no help with my old TaxCut return. But that's OK because TurboTax imported this year's W-2 electronically, which saved me some time and anguish.

This was my favorite thing about TurboTax—since I work at Macworld like Phil does, it was also easy for me to import my W-2. Checking over all the import information is fine and good, but I find entering it fraught with possible problems—like my own human transcription error. So this feature eased my mind considerably.

Interface Design and Interview Process

I'm a sucker for a well-designed interface (I'm a Mac devotee, after all), so to me, TurboTax was much friendlier than TaxCut. Its interview was so simple and easy that it didn't make me worry that I was doing something wrong. When I needed help, there was a video or a clearly written FAQ on the topic. I agree with Phil, though, that navigating to points earlier in the interview was much easier with TaxCut than it was with TurboTax. For the most part, TurboTax asked questions leading to the answer it needed; in one place, TaxCut rattled off a bunch of restrictions about the tuition and fees credit and then asked me, "Do you want to take the tuition and fees deduction?" I had no idea. That's why I was using it—so it would ask me the right questions and decide for me.

Ease of Use

My measure of a good tax-preparation program is whether I understand what I've done when I'm about to file. TaxCut's Web-browser-based help baffled me further and had me sweating bullets. TurboTax offered videos of kindly tax experts soothing me with bulleted points next to their talking heads. It was just enough information to help me understand what I needed to, and it was organized such that I knew when I could skip the video and move on.

My only real complaint with TurboTax is that it doesn't show what you owe to the federal and state governments side by side like TaxCut does. If you're in the state program, you can't just check quickly to remind yourself of what you owe the feds.

Extras (Videos, IRS Documents)

I enjoyed having the QuickTime videos available for variety and my own comprehension. For me, the only thing that can make taxes more interesting is a multimedia presentation.

Filing the Return

I ended up filing electronically through TurboTax. It was so easy—the directions are very clear. Then I got some good tips for lowering my taxes next year.

Technical Support and Customer Service

I tried to see these programs from a nontechnical user's point of view, and I'm happy to say that my only experience with tech support was secondhand through Phil, who had to call it about his update-downloading problem. Overall, the two programs seem to have better customer care than they did last year, based on reports we heard from many disgruntled readers.

Are These Products Worth It?

TurboTax is a nice middle ground for me, between doing my taxes by hand and hiring an accountant, which would be overkill. I'll probably use it next year, too.

At a Glance
  • Macworld Rating
  • Macworld Rating
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