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AnchorDesk

David Coursey
How I'm doing my taxes this year

David Coursey
Executive Editor, AnchorDesk
Friday, Jan. 30, 2004
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Today I'm going to violate one of the cardinal rules I learned while attending (via correspondence) the Famous Columnists School. You're supposed to put the stuff everybody cares about at the top of the column--right here--and save the less important stuff for the bottom. Well, today I'm going to turn that rule upside down.

Top products compared
How do the latest versions of TurboTax and TaxCut stack up? Here's what our reviewers thought.
THE TOPIC TODAY is software and services that help you file your state and federal income tax returns. The reviews and comparisons will come--later. First, I want to tell you about an opportunity for you to help one of the software vendors do a good turn for people who deserve it.

Specifically, if you're over 62, under 22, have been on active military duty, qualify for an Earned Income Credit (income of less than $33,000 to $35,000), or meet certain other qualifications, you can use Intuit's TurboTax Online for free.

More than seven million returns have been filed through this free program since 1998. It's approved and promoted by the IRS, and many states allow you to file their returns for free as well. This can save you up to $40, depending on the returns you need to file.

Scott Cook, my friend and Intuit's co-founder, really wants people to use this free service. Intuit tries to create products that people want and sell them at prices they can afford. But everyone (well, almost everyone) has to file taxes, and Intuit wants to make sure no one has to face that sometimes frightening process alone.

I know most AnchorDesk readers wouldn't qualify for this service themselves. But I'd be surprised if you don't know three or four people who would benefit from it, especially with so many Americans on active duty in the military. So you can help these people by pointing them to the Intuit Tax Freedom Project or e-mailing them a copy of this column.

NOW ONTO the reviews.

While I have an accountant look over my returns, I prepare my taxes myself each year using software. In past years, I've done this so late that I didn't get a column done early enough to be much help. This year I've resolved to be better, so here's the annual tax column.

Our reviews staff, have done excellent work comparing TaxCut Premium and TurboTax Deluxe. To make a long review really short: TurboTax, the Intuit product, won the Editors' Choice.

OK, so Intuit makes a better product than H&R Block (whose family name is really Bloch, I think). The differences between the programs are well covered in the review, but should you accidentally buy the wrong software by mistake, don't fret too much: They are both pretty good.

You may be able to save some money and a trip to the store--and have just as much fun--by doing your taxes online. We reviewed five such services in capsule form. The only services I've tried are TaxCut and TurboTax online; of those two, I liked Turbo best. I think the difference is a little more pronounced than in the boxed versions of the programs.

IT GOES WITHOUT SAYING that Intuit's TurboTax has tight links to Quicken. TaxCut has similar links to Microsoft Money. If you're a longtime user of either product, you probably already know this. If you're not, we're still early enough in the year for you to start managing all your finances with one or the other.

Quicken is the default choice here because it's the oldest, best recognized, and isn't from Microsoft. I can't really think of a reason why you shouldn't buy Quicken, which means Microsoft Money has a terrible uphill slog to find customers. Having a version on MSN helps, but only a little.

Because I use a Pocket PC and there is a version of Money for the handheld, I've used the program on and off for several years now and think it's a very fine app. So, if you end up using Microsoft Money, you won't have anything serious to complain about. In some ways, such as integration with online resources and stock accounts, I even prefer Money to Quicken.

My small business uses QuickBooks Online as our accounting software, and I'm about to start using Intuit's payroll service (with a nice discount through Costco). That makes it really likely that, since we're an S-Corp and everything eventually falls through my personal 1040, my accountant and I will be using TurboTax when tax time rolls around in 2005.

Meanwhile, if you've never considered using software for your taxes, please do. Both TurboTax and TaxCut make doing your taxes mostly comprehensible, even easy, thanks to the interviews and wizards used to input information and make decisions.

Even if you use a professional to do your return, as I do, doing a first pass with software or online is an educational experience and helps keep your tax preparer on his or her toes.

What do you think? Do you use software to prepare your own taxes? Which package do you prefer? TalkBack to me below! 

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