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Test driving tax prep software

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Here's a look at my experience with three better-known tax prep programs — TurboTax, H&R Block at Home and TaxAct — in preparing my family's 2012 return.

TurboTax The TurboTax desktop and online programs make doing taxes as simple as can be. I downloaded the desktop version of TurboTax Premier for $89.99 — though I learned later that I could have paid $10 less if I'd bought it on CD at my local Staples. The download took only a few seconds, as did the import of information from our 2011 return. All of the unchanged data from 2011 — names, addresses, federal ID numbers, even descriptions of business expenses — popped into the right places on the 2012 forms. Even the names of the charities we support carried over. The software also imported my wife's W-2 and all of the information on our investments from Vanguard, T. Rowe Price and Fidelity. All I had to do was key in details for a few local banks and update the amounts we had given to charity.

The online version of TurboTax, by contrast, didn't import as much. My attempt to transfer our 2011 return failed, and an import from one of the fund companies went awry.

Otherwise, the online program looked and worked much the same way as the desktop software. I didn't have to pay to try it because TurboTax, like H&R Block and TaxAct, doesn't require online users to pay until they file their returns. Had I filed with the online version of TurboTax Premier, I would have paid $49.99 for a single federal return — the price as it was discounted at the time. But TurboTax says it could rise to as much as $74.99, its list price, by today's tax filing deadline.

When I had a question about recording tax-exempt interest, I clicked on the help link, and TurboTax offered a choice between a call and an online chat. Within seconds, I was e-chatting with Marilyn G., and she pointed me to the right spot on the return. We were done in less than five minutes, and I paid nothing extra.

Where TurboTax irks is with its pitching of additional products and services.

H&R Block In past years, I've liked H&R Block's desktop software. It didn't import quite as much information as TurboTax did, and occasionally didn't provide some obscure piece of tax guidance that I could find in TurboTax. But I enjoyed its eye-pleasing, easy-to-use interface and concluded that, for most people, it could do a fine job. This year, I had problems installing it.

Stymied, I trundled over to Staples, where I bought Block's Premium software on CD for $59.99. After that 30-minute detour, I popped in the CD and set about installing the software and the latest updates. During the update installation, the program quit. I restarted. Finally, it worked.

Were the glitches my fault? Maybe. But I was working with the same Mac and antivirus program as last year, and if any software should be idiot-proof, it's a tax preparation program.

After installation, Block's desktop program was fine. As in years past, it didn't import as much information as TurboTax, but it otherwise handled our return without problems.

Block's online offering operated just as smoothly. And because it didn't have to be installed, it spared me a spike in blood pressure. Had I used it to file, I would have paid $49.95 for a federal return.

Block's assistance also impresses. If you use its software to file your return, the company promises that one of its tax experts will represent you, free, if you're audited.

TaxAct TaxAct's selling point is price. The desktop version of its Ultimate Bundle, which includes electronic filing of a federal and a state return, costs $21.95. TaxAct doesn't sell a desktop version for the Mac. This year, I opted to try the online offering. I plowed through our return without difficulty, though I did have to type in more of our information because TaxAct imported less than TurboTax and Block did.

In addition to being inexpensive, TaxAct is quirky. Its maker, 2nd Story Software in Cedar Rapids, Iowa, does some things differently from its competitors. Its interview questions come in a different order, and some of them address surprising topics.

Only TaxAct, for example, asked me whether I had a conscientious objection to Social Security and had filed Form 4029 documenting it. Members of some religious denominations can be exempt from Social Security taxes, as long as they promise not to take benefits.

Test driving tax prep software 04/14/13 [Last modified: Monday, April 15, 2013 10:37am]
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