Saturday, February 24, 2007

TurboTax vs. TaxCut

By now if you haven't seen a commercial yet or heard of TurboTax (Intuit) or TaxCut (H&R Block) consider yourself sheltered fortunate. I even heard an advertisement for one of the packages while shopping this week. I'll break down exactly what they are and how they compare in this post.

What Do They Do?
Both programs are software packages that you can pick up at any local chain or electronics retailer (Wal-Mart, Best Buy, Circuit City, Target). The programs install and being by asking you a series of questions - an "interview" as the programs refer to them. Questions range from how many children do you have and are you married to the size and number of charitable deductions you made over the year. Your responses are dropped down into the tax form in the appropriate area after submission and calculations are made. After the process is completed the programs allow you to print off a completed form to mail or send in electronically "e-file."

New Features
The big push this year has been to push "audit protection" features which of course entitle the companies to extra fees. Both companies offer similar services so this is a wash. However, if you e-file TaxCut throws the service in for free. TurboTax will cost you around $40 for the protection.

Transferring Data
You can save yourself a sizable chunk of time if you avoid re-inventing the wheel and import your data from other programs. TaxCut and TurboTax vary slightly on which programs they play nice with.

TurboTax can talk with:

  1. Quicken and QuickBooks
  2. W-2, 1099, 1098
  3. TaxAct
  4. TaxCut
  5. Anything that can create a .txf file
  6. Microsoft Money
  7. ItsDeductible
  8. Quicken Rental Property Manager
TaxCut can talk with:
  1. TurboTax
  2. H&R Block Deduction Pro
  3. Deduction Pro
  4. Money
  5. Quicken
Tech Support
Both companies have phone, chat and email support. I haven't used the feature on either package to be able to give much guidance here. From reading up TaxCut's "Ask a Tax Advisor," (another way for H&R block to throw work to its accountants) costs $19.95 per question (federal or state). TaxCut also runs a blog which is free to view. TurboTax has a "Live Tax Advice feature" where you can talk one on one for FEDERAL tax questions ONLY and is more expensive at $39.95 per question.

  • Free Federal: Free
  • Deluxe: $29.95 (Fed Only)
  • Premier: $49.95 (Fed Only, need this if you have investments)
  • Home & Business: $74.95 (Fed Only, Schedule C's included)
  • Note - State returns cost an extra $24.95
  • Basic + E-file: $9.95 (1040EZ only simple returns)
  • Premium + E-file: $19.95 (More in depth plus 1 ask a tax advisor session free, State extra)
  • Premium + State + E-file: $39.95 (State + Fed + everything in the Premium)
The quick recommendation: In my opinion the average taxpayer will get a better value from TaxCut. It is less expensive, you get state and federal returns, and can talk to an advisor if you have a question and won't get charged extra.

You can buy either package online from the source or

That's all folks...

++++ UPDATE 02/28/07++++

Additionally, it has been brought to my attention that while TurboTax's free edition supports only the 1040EZ filing, TaxCut supports 1040EZ, 1040A, and 1040 forms: You have to purchase the Deluxe or Premier to get those forms with TurboTax.