Let me preface this discussion by saying that I am not offering tax advice, I am just commenting on my experience with the following tax preperation products.
Over the past several years I have done my own taxes using one of the online products available from Intuit, H&R Block, or TaxSlayer.com. This year I set out to find the cheapest deal I could, while confidently preparing my taxes. Since I do independent consulting work, I need to use a product that supports Schedule C and can handle self-employment taxes. I didn’t review Tax Slayer this year, but I had a good experience with it in the past. It was very cheap, using the free-file link from the IRS. Tax Slayer was not as pretty or intuitive as the other apps, but it got the job done at minimal cost.
I started this year with H&R Block At Home Premium because it was the cheapest at $49.95 and I had a coupon to make it $34.95. Everything seemed to go well at first, but I used this software a few years ago and I was surprised that it did not store any of my previous information. I had to retype all my personal info and put in my family members and go through all the interviews. I was interrupted and had to logout for a little while. When I came back to hrblock.com, I had a really hard time finding the button to log back in. I then realized that I could click the button to start my return for $49.95 and it would let me log back in. I had a problem entering my W2 info for my wife because H&R Block was expecting a 6 digit entry for the state employer ID field of the W2. My employer id was 9 digits and preceded by an “R.” This would definately not go into the form and the website would not let me continue. I used the help feature and started a chat with a representative. The help was useless and they would not recognize that the issue was a bug, they kept saying i could just enter the first 6 digits. I don’t think so. This would cause all kinds of havoc when the state started to process the return. While waiting for the chat agent to become available, I did a quick search and found that the Alabama Department of Revenue changed the format of their ID numbers in 2007 to the new RXXXXXXXXX format. I even pasted the line from the ALDOR that said be sure your Tax preparation software is aware of this change, but the support agent still refused that this was a bug and would not offer to submit it to the development team for correction. At this point, my confidence in the application was starting to drop quickly. I was starting to get frustrated with the interface and it seemed like the questions were not thorough and were not explained well. It seems like H&R Block is no where near as good as it was years ago. I actually enjoyed the software several years ago. After completing the interviews, I was shocked that I might actually owe over $2500 to the IRS and that was just the federal portion. I then decided to double check against TurboTax.
I used TurboTax online last year and it did a great job at helping me get through my taxes. Intuit has a pretty strong product and the interface is visually appealing and very intuitive. This year, they have made some enhancements that provide much more detail about the tax laws as you are completing the forms. The interface easily guides you through the process and the flow helps you answer questions in an order that tries to keep you from getting bored and keeps you from duplicating your responses to similar questions in different sections of the interview. TurboTax also automatically imported almost all of my personal info from the previous year. This was really great and kept me from having to re-type all that time-consuming info. I was pleased that TurboTax helped me with my business expense reporting and had a thorough deduction section that really helped me maximize my return. I was actually able to get a refund from federal and state.
One of the most important aspects of tax software, in my opinion, is the ability to make you feel like you are confidently completing the process and that you are able to answer all the questions accurately. If you can’t confidently complete the interviews, then you probably need help with your taxes. After that, I want to reduce my tax liability as much as possible and possibly get a refund. I want to e-file my state and federal taxes and get my refund using direct deposit. Finally, I want to pay a fair price for the service.
Overall, I would highly recommend TurboTax for filing your 2009 taxes. I felt that it was easy to use, very accurate, and it helped me reduce my tax liability. The cost was about $80 for federal and $30 for state.
If you are not self-employed, you can get by with one of the cheaper versions and save some more money.