Filling out a tax return is not my idea of a good time. But if you must -- and you must -- you may as well make the best of it. One option is to turn it over to a professional. Another is to enlist the services of a good tax preparation program. My two favorites are TurboTax (IBM and Macintosh) from ChipSoft and Andrew Tobias' TaxCut (IBM only) from Meca. I'm not alone. The programs share this year's "Editor's Choice" award from PC Magazine.
Any tax preparation programs will calculate your taxes and fill out your return. But TurboTax and TaxCut will hold your hand throughout the process with lots of useful online help facilities. Both now have pull-down menus and allow you to use both mouse and keyboard commands. Both are capable of printing IRS-approved forms on a wide range of laser and dot matrix printers. Also, both programs can be used to prepare a return for electronic filing. Individuals cannot file their returns directly, but the programs come with instructions for sending your disk to an independent electronic filing service that will, for a fee of about $20, file the return on your behalf.
'ASK THE EXPERT'
TaxCut's big selling point is its "ask the expert" feature. Regardless of where you are in the program, you can press a key to bring up advice from tax attorney Dan Caine. The "expert" does far more than advise you on procedures. It counsels you on how to save money on taxes while staying on the right side of the IRS. I've never understood depreciation schedules, but I do know how to answer a few simple questions about the equipment I've acquired. That's all I had to do. The program converted my answers into data, which it entered into the appropriate lines on the right forms.
The expert system is just one of many help features. Another, called the "shoe box," is designed to deal with all those pieces of paper that you don't know what to do with. It begins by asking where you got them (employer, bank, realtor, broker, etc.) and then figures out where to enter the data.
Another feature, called the "checklist," helps you find deductions you might have otherwise missed. This part of the program asks you a series of yes or no questions and, based on your responses, recommends the appropriate forms and schedules. It also provides further help that it deems necessary for your particular return.
The program also has a topic index and a built-in "auditor" that checks the return for omissions and inconsistencies as well as what the manual calls possible IRS "audit triggers." Given a choice, I'd much rather be audited by my PC than by the IRS.
TaxCut is especially easy for people who use Andrew Tobias' Managing Your Money (MYM) throughout the year. TaxCut reads files and automatically posts income and expenses to the appropriate form. It also imports data from Quicken and CheckFree, but the TaxCut MYM connection is much more seamless.
ChipSoft's TurboTax has beefed up its help system in an apparent response to TaxCut. There are now versions for both the IBM PC and Apple Macintosh.
TurboTax begins by offering you "tax assistance," but if you're the do-it-yourself type, you can go directly to the IRS forms. The "assistance" feature asks you a series of questions. Depending on your answer, it takes you to an appropriate line on the 1040 or other form. You enter the data and press a key to continue the interview when you're ready to proceed.
If you have a question, you can press F1 for information about the form you're using. A "hypertext" system provides additional information about key concepts and terms.
Another handy feature, called the "file cabinet," provides an alphabetical index of tax topics. Select an appropriate category and you're taken to a help screen and then to the appropriate line on an IRS form.
There is also a "consult with TurboTax" option that provides ChipSoft's interpretation of whatever IRS instructions are provided for the form and line you're on.
TurboTax has a suggested retail price of $76. State tax packages (available in 44 states) cost $40 per state. The Macintosh version sells for $89 plus $49 per state. ChipSoft can be reached at (619) 453-8722.
Andrew Tobias' TaxCut has a suggested retail price of $89.95 plus $39.95 for each state (available in 10 states). For information, call (203) 222-9150.