Tax software: faster than ever, sometimes cheap

Fast or cheap? That's the choice that tax software offers users these days.

You can go online and fill out a form, print it out, and mail to the Internal Revenue Service and pay absolutely nothing. The program might not have all the latest bells and whistles. But it sure beats sharpening pencils, filling out paper forms, and poking at calculator buttons.

But if your time is valuable, it's hard to argue with the desktop versions of the two bestselling tax packages: TurboTax and TaxCut. The ability to download personal information from last year's return, W-2 forms, and investment data can make this year's 1040 exercise a little less burdensome. In this regard, TurboTax Deluxe (street price about $30) stands out.

Combined with its slick interface and comprehensive tax help, the downloading capabilities of TurboTax makes the program my favorite this year. The package includes one free state tax program and free electronic filing (after rebate).

TaxCut Deluxe has as many strong features as TurboTax and costs about $10 less after rebate. But it has far fewer electronic links to download W-2 and investment data. And if you want something cheap, why not go online?

There's one possible reason: privacy. When you fill in forms online, the data sit on the company's computers, not yours. So there is the risk that your tax data might get snatched. It's a small risk.

TurboTax (www.turbotax.com) and TaxCut (www.taxcut.com) come in online versions, but lesser-known firms offer better deals. My favorite low-cost option this year is TaxAct (www.taxact.com).

It does federal taxes free. It costs $7.95 to add a state tax return, and another $7.95 to file electronically, which means a faster refund. The software doesn't have everything, but it works pretty well. You can also download the program and keep tax data on your computer.

The pricier CompleteTax (www.completetax.com) offers better help than TaxAct and none of the annoying ads urging upgrades to more expensive versions of the software. But its directions aren't always as clear. Question: "Are you required to file Form 8862 (Information to Claim EIC After Disallowance)?" Answer: Huh?

Not all online programs are cheap. ExpressTaxRefund (www.expresstaxrefund.com) had a barebones feel and still cost $29.95. I liked the idea of live expert assistance, which it offered. But with an extra $10 charge for filing itemized deductions, another $10 for child-care credit, and so on, I couldn't get excited.

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