As much as we hate to be the bearers of bad news, we also want to help you get a jump on your tax filing for the 2010 tax year. In that spirit, we tested out four prep programs and have compared them here to help you decide.
We've all heard the famous quote before: Nothing is certain in life but death and taxes. And while you could try to avoid your taxes, Uncle Sam is probably going to make your life even more miserable if you do.
Rather than suffer the consequences of illegal action, we suggest you get a jump on your taxes with one of the four tax prep solutions we have thoroughly tested out for you: TurboTax (Web|Windows|Mac), H&R Block (Web|Windows|Mac), TaxAct (Web|Windows), and CompleteTax (Web-only). Oh, and--by the way--in the course of our testing, we did our taxes seven times, so it's safe to say that at the very least, you can count on your filing experience being less painful than ours.
Obligatory disclaimer: We tested the online and (where applicable) desktop versions of each of the four tax prep programs mentioned above, focusing on the Deluxe level offerings. We prepared our federal and California state taxes online and on a PC running Windows XP, using our real W-2s and tax forms. Although we got the same filing results with every program, our experience may not reflect your personal situation.
What you need to know about tax prep software
Which one?: Most software comes in four levels of guidance, which are geared for everything from simple (the 1040 EZ form) to more complex returns. Many people go with the Deluxe option, which walks you through deductions for things like mortgage and rent, investment income, dependents, and charitable donations. Premier, Premium, or Ultimate adds on home ownership, rental property, and more complicated investments and deductions, whereas Business offers extra tools for small-business owners and self-employed users (and usually bundles a state filing as well).
E-filing versus printing: E-filing can net you a refund in as few as eight days, whereas refunds on tax forms you print and mail can take up to six weeks. All of the programs included here have an option that allows for at least one free federal e-file for one tax return, but additional e-filing costs can rack up after that. You can expect to be charged extra to e-file state returns or returns for additional family members.
Online and desktop: With the exception of CompleteTax, which is Web-only, all of these programs offer online and desktop versions. H&R Block At Home and TurboTax support Windows and Mac; TaxAct is Windows-only. Online versions mostly mirror desktop versions, with a few minor differences. Desktop software is typically licensed for up to five free federal e-files (you can print off as many as you'd like); online tax prep usually includes only one free federal e-file. Online tax returns are encrypted and stored on the provider's Web servers. Desktop returns are stored locally on your computer.
Which tax prep program is right for you?
To be perfectly honest, the overall content of the tax interview--that is, the sections and questions that each app guides you through--is almost identical no matter which program you choose. Clarity in language, extra tools, and help and support features are key differentiators, as is price. We sum these up below. For even more information, see our full reviews of TurboTax, H&R Block At Home, TaxAct, and CompleteTax.
TurboTax Free Edition; TurboTax Deluxe ($29.95); TurboTax Premier ($49.95); TurboTax Home & Business ($74.95); TurboTax Business ($129.95). State filing additional: $27.95 for Free Edition; $36.95 for Deluxe, Premier, and Home & Busniess; $49.95 for Business.
H&R Block Free Edition; H&R Block Basic ($19.95); H&R Block Deluxe ($29.95); H&R Block Premium ($49.95). State filing additional: $27.95 for Free Edition; $36.95 for the others.
TaxAct Free Federal Edition; TaxAct Deluxe Federal Edition ($9.95); TaxAct Ultimate Bundle ($17.95, includes State). State filing is an additional $14.95 for Free and $8 for Deluxe.
CompleteTax Basic (free at press time; $9.95 normally); CompleteTax Deluxe ($19.95); CompleteTax Premium MVP ($49.95 at press time; $59.95 normally; includes State). State filing is an additional $29.95 for Basic and Deluxe.
Turbo Tax provides the most import options, and it offers a clear, visually appealing interface with plenty of links and descriptions for tax terms. The service recently paired with Mint.com to offer automatic calculation of interest income.
H&R Block provides the most enjoyable interview process, with plenty of visual cues and clear explanation of tax terms. It also offers the most generous customer support, including one free topic discussion with a tax expert.
TaxAct is the most budget-friendly option and offers a clear interview process that is easy for experienced users to complete quickly. It also includes a handy tool called Answer Center.
CompleteTax offers complete free filing options for those who have lost their jobs over the past year, those who end up owing taxes, and those who successfully import last year's return from a competitor.
Turbo Tax is the most expensive option. The summary sections are unnecessarily long.
H&R Block doesn't have as many checks in place to ensure you don't miss entering certain information.
TaxAct doesn't offer as much hand-holding as TurboTax or as much personalized care as H&R Block.
The interface of CompleteTax is dated and completely convoluted in places; it was the only program that we actually got stuck in.
Who it's for
Mint.com users who hate data entry. Also, SnapTax is a great option for filers with very simple needs.
Users who require personal attention and a user-friendly interface with plenty of tax term clarification.
Users who want an inexpensive experience that lets them fly through the tax-filing process.
Only those who fulfill one of the free filing requirements and would otherwise be comfortable filing by hand.
Senior Associate Editor Jessica Dolcourt contributed to this article.