So it’s that time of year that I hate (tax time), but luckily it’s always followed by the time of year I love (NBA playoffs). We had our small-business taxes done by Ann over at Bayley Davis, but I decided to give it a try for my own taxes again. I was mostly satisfied with the online version of TurboTax last year, but this year I thought I’d try some of the others. After all, H&R Block was running millions of web ads for TaxCut (including on our site Menuism) so they must have a somewhat decent product to spend all that advertising. John mentioned that he’s been pleased with TaxAct in the past.
Here are my pre-trial thoughts:
- TaxCut – So much advertising, it better be good. Anyways, “you got people” right? I used the brick and mortar H&R block service in the past and was not too impressed with it since the people didn’t seem too great and it was expensive. But, a few years has passed and they’re pushing the consumer side more so I figured it should be usable. Also, TaxCut is cheaper than TurboTax so that’s another plus.
- TaxAct – The cheapest one out there. You can even do your federal for free!
- TurboTax – Tried and true. TurboTax is the priciest one out there.
My intention in the beginning was not to try all of the tax services. I was pretty intent on using TaxCut this year since I had also read some other positive reviews. Here’s what happened.
- Started using TaxCut. All is good so far. They have a nice clean interface and it’s very wizard-driven. They try to break things up in the small simple chunks and questions. Entered in my W2 from HP and K1 for Two-Bit.
- Things get complicating. I get to another K1 I have for a fund I’m invested in that’s structured as a partnership. It has some special code on one of the lines. TaxCut is asking for what codes there are, so I figure it must handle it. I put in the code and hit Next. Here’s basically what it tells me (my words, not theirs – it transferred my account to the “online office” service so I can’t get back to the do-it-yourself screen):
- TaxCut doesn’t handle that particular code!
- If you want to continue your taxes, we’ll have to transfer you to your nearest H&R Block office.
- If you don’t do this and try to complete your taxes, they will be incomplete (and bad for you).
- WTF. Did they not finish the software? Is TaxCut just a way to funnel people to H&R Block where they can ream you on the prices? I wasn’t about to find out. NEXT!
- TaxAct. I normally love free stuff so I was curious to see how good free tax software could be. Surprisingly, TaxAct is pretty decent. It’s very straightforward. Not as wizardy or scenario-based as others, but it seems to get the job done. Apprarently, they show ads while you do your taxes so as you fill in your mortgage interest you can look to the side and see an ad for a lender that has a lower rate than yours. Great lead generation I’m sure. It handled both of my K1’s fine, but it didn’t seem to ask for too much information which was disconcerting. Maybe it only asks for the relevant and required things? I don’t claim to have any tax knowledge, but if I’ve got a form that has numbers entered in it that look important I would hope my tax software thinks it’s important too. Time to try TurboTax. NEXT!
- TurboTax. TurboTax is pricier indeed, but let’s give it a shot. It’s very much wizard and scenario-based, which is pretty cool since it starts asking questions you might not even think about, like the Long-Distance Telephone Excise Tax Refund. The thing I always loved about TurboTax is how it can electronically download W2s and other tax documents (like my E*Trade tax forms). When I get to the K1s, it handles my weird one just fine and it asks for all the info on my Two-Bit small business K1 – how exciting! I’m sold!
My Conclusions
In my opinion, the extra money you pay for TurboTax shows. It’s an impressive web app that’s quite easy to use and navigate. The scenario and question driven wizards make you feel like everything is covered and the electronic downloads of tax forms really help streamline the number entry process.
TaxCut.com needs more work to compete head-to-head with TurboTax. It’s nice that “you got people”, but there are sometimes when I’d rather just do things myself.
TaxAct seems to be a great solution for those that have simple tax situations and even better for those who don’t have to file state taxes.
There’s my 2 cents on taxes. What did you use this year?
Happy itemized deducting!
Justin
Other Two-Bit Posts
If you enjoyed this post, make sure you subscribe to my RSS feed!
on Apr 9th, 2007 at 1:02 am
Having just finished my taxes (phew!), I can vouch for the quality of TurboTax. I tried both TaxAct and TurboTax this year, and even including the cost of TurboTax’s deluxe services my overall refund came out better than TaxAct. The wizard flow of TurboTax was nice and straightforward. The only downside was that it was hard to navigate back through your previous forms – TaxAct was much easier in that regard.
on Apr 13th, 2007 at 4:05 pm
I hear you on the K1 entry screen! Obviously, everyone’s tax situation is unique. The challenge is matching you up with the right solution to your unique tax situation.
In the case of K1 Trust & Estates, TaxCut Online currently supports the majority of Trust & Estate structures. But for the more complex structure of the second K1 you entered, TaxCut Software would have been the better choice(the software product is tuned to handle more complex business returns).
You’re absolutely right in that the “Forms Not Supported” answer you were given is not the most intuitive or friendly. My apologies!
K1 handling is a topic that we’re improving on now in both our Online and Software products — using your feedback as a guide.
on Apr 14th, 2007 at 2:46 am
@TaxCutK, thanks for listening to the feedback. I haven’t had great experiences with tax software on the mac in the past so I like sticking to the online versions. I look forward to seeing the improvements next year!
on Apr 13th, 2009 at 1:53 pm
Hi Justin,
This is extremely helpful. As a yuppy who’s taking the DIY approach to taxes this year, your break down and feedback were very informative. I’d been going back and forth between Turbo Tax and Tax Cut, so I really appreciated having your thoughts on the effectiveness, cost and overall coverage of the three competing software versions.
Thanks to your post I plan to go with Turbo Tax and feel good about making the final decision.
Thanks again,
Gretchen