Guide to Desktop Tax Software

Guide to Desktop Tax SoftwareAs April 15 approaches, TurboTax, TaxCut, and TaxAct are all eager to help.Tony Lima, Special to PC World

The W-2 forms have arrived, the 1099 forms aren't far behind, and it's time to choose your best line of defense against the IRS.

Three companies lead the pack for desktop tax software. By my ranking, they are TurboTax from Intuit; TaxCut, marketed by H&R Block; and TaxAct, sold by 2nd Story Software.

You can find Web-based versions of these three programs, as well as of CCH's CompleteTax and Petz Enterprises' TaxBrain. Those online options are reviewed separately.

The shrink-wrapped programs are very different, and each is available in several versions. TaxAct is the budget deal, offering a free download ($6 for a CD). TurboTax starts at $30 for the Basic package; most comments here are about the Premier version, however. TaxCut's pricing starts at $15 for its Standard version, though my evaluation covers the Premier version. Various rebates reduce some of the prices. On the other hand, getting support for state income taxes costs extra in some cases.

Decisions, Decisions

Generally, the higher-priced packages include a greater level of help and provide a more in-depth interview to help populate your tax forms. But their areas of focus vary--and that's a plus, because everyone's tax situation is different. Also noteworthy: Each program I tested imported its own data from the previous year's return without a hitch.

Otherwise, determining which (if any) package is right for you means comparing your tax return with the features and deficiencies of each program. Here are the highlights: If your return is little more than form 1040EZ or 1040, you can't beat TaxAct's offer: the download is free, and you can e-file for $8. But the interface design forces you to look at many more screens than are necessary.

If you're return is very complicated, TurboTax is for you. Its interview is the most detailed--in fact, it's overkill for taxpayers with simple returns. TurboTax Premier ($60) includes an outstanding treatment of asset sales, especially stock transactions.

How do you know whether your return is complicated? Consider these factors: Mileage deductions, particularly in multiple categories, such as medical, charitable, and business (your own or one where you are...