Tuesday, February 17, 2009

Choosing a Tax Program

Getting ready to do your taxes? If you’re like many Americans, you will probably turn to commercial tax software to help you do the job. Unfortunately, with all the options out there, it can be hard to know which program to pick. First off, don’t like claims of “free e-filing” fool you. Pretty much every program offers this. The real important criteria are 1) how easy is it to use? 2) will it get me the maximum refund? And 3) How much will it cost?
With this in mind, let’s take a look at the three most popular ones and see how they stack up.

TurboTax – My parents have been using this program for the last few years, and it’s clearly a top choice for many people. With prices as low as $29.95 (for the federal edition only), buying a copy of TurboTax wont cut into that refund check too much. According to several reviews, this program also seems to have the most intuitive user interface. Plus, the program comes with some neat planning features to help you start saving for retirement and get the most money back on next year’s taxes.

H&R Block Tax Cut – This program gets a lot of attention because it’s backed up by a real financial services firm. It costs about the same as TurboTax, and has the same level of intuitive controls. Plus, its got an added deduction finder feature and can connect you with a live tax consultant if you need additional help.

TaxAct – Cheaper than its competitors, TaxAct features the very basic tools you need to get through the core tax forms. However, it lacks some of the additional support other programs offer. The user interface is still pretty easy to use, but it’s not going to take you by the hand the way its competitors do. If you’ve never done your taxes before, it may be best to stay away from this program. If you do opt for the cheapest fix, make sure you have someone knowledgeable to help you out.

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