TaxCut to Take On TurboTax

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It's good to be TurboTax. The Intuit product formerly known as MacInTax enjoys a 68 percent share of the market for tax preparation software. So, if you're a rival, how do you take on this software giant?

If you're Block Financial (818/779-7223, ), you start slashing prices.

Indeed, the major change to the 2000 tax-year edition of Block Financial's Kiplinger TaxCut can be found on the price tag -- it sells for $19.95. That's $20 less than what the company charged for the 1999 version.

More important to Block Financial, $19.95 is considerably less than the $49.95 price for TurboTax Deluxe announced by Intuit (800/446-8848, ) earlier this month. And Intuit may already be feeling some pressure from TaxCut -- TurboTax now sells for $39.95 at Intuit's Web site.

But a lower price isn't the only change to TaxCut this year. The program adds a bar that lets users gauge their progress in the tax preparation process. A Where Am I? button makes it easier for users to find their way through TaxCut, allowing them to jump to anywhere in the program. A new My Taxes interview feature collects user input to organize and customize tax forms. Block Financial also says its beefed up TaxCut's advice tools.

"We talk in plain English," says Sabrina Wiewel, assistant vice president of software marketing for Block Financial. "We make it very easy for our customers to understand."

Still, there's one feature where TaxCut falls short of what's offered by TurboTax -- Automated Tax Filing. The new feature downloads W-2 and 1099 data directly from participating payroll processors and financial institutions, rather than requiring users to enter the information manually.

Although Block Financial plans to add automation features to future versions of TaxCut, Wiewel doesn't see automated tax filing as a competitive edge for TurboTax. "We don't feel it's far along enough yet," says Wiewel, who contends that going online to download tax form information is as time-consuming as entering it in yourself.

Not so, Intuit officials counter. In a demo for Macworld in November, TurboTax senior product manager Todd Stanley walked through the automated tax filing feature, showing how to gather tax data electronically from Intuit's partners. TurboTax users who are able to take advantage of the automated feature while filing their tax returns electronically could, in theory, complete their returns in 10 minutes, Stanley insists.

Both tax preparation products are now available both online and on retailers' shelves.

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