H&R Block TaxCut Online Premium 2005 review: H&R Block TaxCut Online Premium 2005

H&R Block TaxCut Online Premium + State + E-file 2006, the Web-based version of H&R Block's venerable tax-prep program, is a convenient alternative to its desktop sibling, although the latter has a superior interface and tools to determine the cash value of charitable contributions. We reviewed the $39.95 edition of TaxCut Online that includes federal and state e-filing fees, but you can drop $20 from the price to exclude state filing, or choose the $9.95 TaxCut Online Basic+ E-file for simple returns. If there's a chance you'll want state filing, which costs $24.95 if purchased separately, you might as well pay up front for TaxCut Premium + State + E-file. Filing federal and state returns electronically with this edition of TaxCut Online costs $39.95. That's $24 more than TaxAct but $19 cheaper than Intuit TurboTax Basic Online. The $79.95 TaxCut Online Signature offers assistance from, and your return signed by, an H&R Block adviser, for about half the going rate of getting an accountant in our area to do all the work.

It's too bad that TaxCut Online leaves out H&R Block's DeductionPro, a utility that ships with the desktop version and determines the fair market value of noncash charitable contributions. If you added this tool, the cost of TaxCut Online increases to $59.90, the same as TurboTax Online Deluxe, which gave us fewer hassles.

TaxCut works in many browsers, including Internet Explorer 6, Firefox 1, Netscape 7.2, and AOL 6 or newer when on Windows XP or 2000. Windows Vista users should have at least IE 7, Firefox 1.5, Netscape 8, or AOL 9. Mac OS X 10.2 and 10.3 users will need Netscape 7.2, AOL for Mac OS X, or Firefox 1.5, and Mac OS X 10.4 users can run it on Safari 2.

TaxCut Online Premium 2006 packs more questions on a single screen than it did last year, but it lacks some helpful features offered by its desktop counterpart.

TaxCut Online Premium largely mimics the new, green-and-gray tabbed interface of its desktop counterpart. The Take Me To button jumps to a menu of topics in the order you answer them. TaxCut offers a streamlined tax interview that fills in the tax forms behind the scenes. The online version reduces the number of clicks you make by combining two related interview segments onto one page. We also like that it transfers federal data into your state return. Big deal? It is when you're spending hours filing a complex return. As with competing Web-based solutions from Intuit TurboTax and 2nd Story Software TaxAct Online, TaxCut Online logs you off after several minutes of inactivity, which is a good security feature, particularly if you're doing your taxes at work.

Unlike 2nd Story Software's TaxAct Online, TaxCut Online's interface is free of ads. However, TaxCut does ask if you want other H&R Block properties to contact you about investments. We were glad that once we said no, TaxCut did not ask again, although it did pitch us for DeductionPro and TaxCut Online Signature.

Oddly, when we tried to log in to TaxCut using Firefox 2 on Windows XP, TaxCut displayed a blank screen. After several attempts, we switched to IE 7. We ran into other roadblocks. For example, TaxCut Online only showed one box for entering lines 12a through 12d from our W-2; we at first missed the subtle Add Row link.

And why did we need a payer's address and identification number to enter our California state tax refund from 2005? We no longer had our Form 1099-G for that data. When we pressed the Back button to make sure we were in the right place, the data we'd already entered disappeared (luckily, this only happened once). None of the other programs--TaxCut's desktop edition, TurboTax, or TaxAct--required all of those 1099-G details; they simply let us enter the dollar amount of our state refund. TaxCut Online didn't let us skip this section and return to it later either, so we were trapped. Via online chat, a polite TaxCut tech support representative told us to call the California Department of Revenue. By the time we dialed that number and confronted a 10-minute wait time, we were ready to ditch TaxCut Online. We had to backtrack to the income checklist page, lie to TaxCut Online that we had no 2005 refunds, and make a note to ourselves to finish this later. Strangely enough, we were able to enter student loan interest without any details about the creditor.

When we were entering Schedule C business information, TaxCut Online confused us further by asking for office expenses including "office supplies." Beneath those instructions, TaxCut advised, "Don't include rent, utilities, and supplies." At least later on, unlike TaxAct Online, TaxCut Online made it clear that its first fields for utility expenses should not include those for a home office.

TaxCut's online support resources include a searchable knowledge base, videos, and free e-mail and chat queries. TaxCut deserves credit for its customer service, which includes free audit support should the IRS take an extra interest in your return at a later date. If you want to chat with an H&R Block tax adviser online or via telephone, you'll get one free session, better than TaxAct's $19.95 fee for 10 minutes and TurboTax's tk. Thereafter, TaxCut.asks for $19.95 per support incident; the hours are 8 a.m. to 11 p.m., Monday through Saturday, and 8 a.m. to 5 p.m. on Sunday, Central time.

Since TaxCut Online Premium imports your 2005 returns from both the online and desktop versions of TaxCut, it could be a viable service for longtime users who want a fast, Web-based alternative to tax software. For simple W-2 or 1040EZ taxes, we prefer the less expensive and less frustrating TaxAct Online. For complex returns, TurboTax Premier Online is easier to navigate than TaxCut and has better tools than its two Web-based competitors for managing charitable contributions and investments.