The deadline for filing your 2011 federal tax return is fast approaching, and many people will rely on online tax preparation software to complete the task. Choosing a online tax software is easy because, in most cases, you can complete your return for free and pay only when you file.
TurboTax®, still the dominator of the tax preparation software market, faces increasing competition from H&R Block At Home™, TaxACT, and other lesser-known programs. For my 2011 tax return, I decided to compare/contrast the online versions TurboTax® and TaxACT.
My wife and I have a slightly more complex tax situation than we had the previous year. In addition to the regular year-end statements, I have a K-1 form (prepared with a TaxACT business product) for a partnership I started in 2011. Happily, I don’t have any 1099-MISC statements (from contract work) to contend with this season.
Price
It’s hard to find a better price than free, and that’s exactly what you get with TaxACT. Any form you need to complete your personal taxes is available in TaxACT’s free edition. It’s what I’ve used the past couple of years.
For this comparison, I looked at TaxACT Deluxe Federal Edition ($9.95) and TurboTax® ($34.95) Basic because I thought they were comparable editions. Both offer the ability to import tax statements from certain employers and financial institutions, and both offer free phone support. When it came to entering the information from my K-1 statement, however, TurboTax prompted me to upgrade to the Deluxe version ($49.95).
Interface
TaxACT’s interface was comfortable enough for me. Like TurboTax®, TaxACT will either guide you with questions or allow you to fill in information without much prompting — the choice is yours. Though I chose the guided approach, I somehow missed the option for importing statements. Poor design or operator error? Probably the latter.
I felt like TurboTax® prompted me more thoroughly than TaxACT during the interview process. It also allowed me to enter more information from my K-1 statement than TaxACT did; however, the end result — a welcomed refund — was exactly the same with both, which is how it should be.
Conclusion
If two tax softwares provide the same results, I say go with the less expensive one. TaxACT Deluxe Federal Edition is the winner here. Ten bucks doesn’t go as far as it used to, but it will allow you to file an accurate tax return. And if the import and phone support features of TaxACT Deluxe don’t seem worth it to you, there is always TaxACT Free.