Opinions expressed by Entrepreneur contributors are their own.
Ouch. it's tax time again--time to roll up your sleeves,rummage through your receipts and update your computer files. Ofcourse, you could leave the dirty work to an accountant, but withtoday's plethora of tax software programs, you may not needto.
The tax software game has been the same for several years. Thereare the dominant programs--namely, Intuit's TurboTax and BlockFinancial's Kiplinger TaxCut--and a few other less popularprograms, such as Personal Tax Edge from Parsons Technology (whichis also owned by Intuit), all reviewed here.
Because IRS forms and schedules aren't completed until theend of the year, final versions of these programs were notavailable at press time. I reviewed beta versions of TurboTax andPersonal Tax Edge and, for TaxCut, a shipping product called"The Planning Edition."
As I'm not an accountant (nor especially adept at taxreturns), I focused on the usability of each program. All threework under Windows 3.1 or Windows 95. Both TurboTax and TaxCut alsooffer Macintosh versions, while Personal Tax Edge still comes in aDOS version.
Full Speed Ahead
Intuit, maker of popular accounting programs Quicken andQuickbooks, has created the only tax program dedicated to the needsof the small-business owner. TurboTax for Business is robust andvery easy to use. Intuit got some complaints about complexity inthe past, so they've tamed this year's interface quite abit. The result is an environment that uses notebook-like tabs tokeep subjects organized and easily navigated.
The screen is split horizontally, with the top half containingfull descriptions of where the user is in the process, includingquestions that need answering. The bottom half can switch between a"Where Am I?" tab and a view of the current form. The"Where Am I" tab lets users see where they've beenand preview their tax returns at any time.
Tabs at the top of the screen let users bounce back and forthbetween key steps, including the Interview process, which takesusers through the basic tax questions an accountant might ask.
TurboTax easily imports tax data from Quicken and Quickbooks.You don't even need to export the files to the common tax fileformat (.TXF); instead, TurboTax just goes out and grabs the data.Of course, if you use another accounting program, you can import.TXF files into TurboTax.
If you don't use an accounting program, TurboTax'sinterview process helps you through the steps. Even if you importdata, you will still be prompted to double-check it. The interviewprocess is straightforward and full of information to help businessowners figure out what fair deductions might be. Of particular noteare video tutorials that pop up throughout the interview process.One of the most interesting explained the concept of depreciationand how it can be used to write off home office equipment.
TurboTax for Business is the only program that includes avariety of filing forms, including the 1040 (individual), 1120(corporation), 1120S (S corporation), or 1065 (partnership). The"go to forms" button leads to every work sheet, scheduleand form you'll need. Here, users can scroll through and workdirectly from a form.
An addition to this year's version is "Smart FinalReview," which checks your return and gives hints for savingmore. For example, I was encouraged to print out my Schedule C tolook for any missing expenses, such as advertising.
TurboTax also offers state returns on CD-ROM or floppies ($24.95or $39.95, depending on your filing status) for all 45 states thatrequire them. TurboTax for federal filing comes on either CD-ROM orfloppies as well; both are priced the same. The CD includes all thebooks and multimedia functions; the disks include only a few keyresources. A full installation (including books) eats up 41MB ofspace; the program alone takes up 20MB.
Cutting Your Taxes
TaxCut is TurboTax's main competition, and rightly so. I wasvery impressed by this program's interview process. The uniquepartnership between Block Financial, an H&R Block company, andthe Kiplinger Washington Editors Inc., publishers of the popularKiplinger's Personal Finance Magazine, means thisprogram offers extremely credible tax advice. Be aware, however,that this advice applies to individual returns rather than businessreturns.
TaxCut's interface has matured significantly over the years.To make this year's version as easy to use as possible, TaxCuthas created a simple, yet extremely functional, interface. Everystep is carefully outlined and described so novice users feelcomfortable. Point-and-click buttons let users easily call up tipsfrom Kiplinger or IRS instructions.
The TaxCut interview process is less videocentric thanTurboTax's, though videos are readily available--you play themas needed. I preferred TaxCut's interview process overTurboTax's because it helped me understand the numbers I wasentering. TaxCut's import function also made it easier to workwith numbers imported from accounting programs. Once your .TXF fileis imported, TaxCut displays the data, shows you where theinformation will be input, and lets you change it if you'vemade an error. This was exceptionally worthwhile, as the numbers Ihad previously set up in Quicken weren't always correct.
When you've completed your return, TaxCut's Audit Busteralerts you to anything you may have overlooked, as well as anynumbers that may look fishy to the IRS. TaxCut makes it easy to zipfrom the IRS forms to the work sheets and back to the summary page(where you see how much of your income you get to keep).
TaxCut supports just 23 of the state tax forms for Windows usersand only two (California and New York) for Macintosh users. Thestate versions will be available by February 10 and cost about $25.The main program costs $19.95 for the diskette version and $39.95for the multimedia version on CD-ROM. TaxCut ate up just 8.55MB ofdisk space (videos run directly from the CD-ROM).
Getting An Edge
Intuit actually owns Parsons Technology, but it doesn't lookas if the makers of TurboTax have anything to do with Personal TaxEdge. This program is clunky and difficult to navigate. The CD-ROMversion includes tips from tax expert J.K. Lasser, but theyaren't very interesting to look at or read.
Though this program will probably get you through the taxprocess, it will require a lot more work than the other programsreviewed here and won't be much more pleasant than filling outthe forms by hand. If you're a DOS user, however, Personal TaxEdge is the only choice you have. All Parsons products come with a30-day money-back guarantee, so it can't hurt to give them atry.
My personal choice for tax software is TaxCut. I loved thisprogram's usability--it really made me feel in control of thetax process while it held my hand through all the nitty-gritty taxissues. Intuit's TurboTax is also a great program with plentyof strong features, including support for all 45 states thatrequire tax forms and an easy-to-use interview process. PersonalTax Edge is by far the least appealing of these packages andrecommended only for die-hard DOS users.
Hot Disks
New and notable software
LapLink for Windows 95 7.5: Road warriors who usenotebook computers love Traveling Software's LapLink. New andimproved, this bestselling remote access software lets you easilysynchronize files from the road. Check it out at (http://www.travsoft.com), or call(206) 483-8088.
Small Business Legal Pro Deluxe: This CD-ROM includessearchable text from four of Nolo Press' bestsellingsmall-business legal books, including The Legal Guide forStarting and Running a Small Business, Tax Savvy for SmallBusiness, The Employer's Legal Handbook, andEverybody's Guide to Small Claims Court. For just$59.95, you'll have a virtual lawyer at your fingertips. Visit(http://www.nolo.com), or call(800) 992-6656.
Contact Sources
Block Financial Software, 4435 Main St., Kansas City, MO64111;
Intuit Corp., 2650 Elvira Rd., #100, Tucson, AZ85706;
Nolo Press, 950 Parker St., Berkeley, CA 94710, (510)549-1976;
Parsons Technology, 1 Parsons Dr., P.O. Box 100,Hiawatha, IA 52233;
Traveling Software, 18702 N. Creek Pkwy., Bothell, WA98011, (800) 343-8080.
Cassandra Cavanah is a former executive editor of PC Laptopmagazine and has reported on the computer industry for eightyears.
