Review: TaxCut

Last week I gave away four 1GB USB drives with TaxCut on them to four different readers. In addition, I gave one to one of my co-workers. He'd done his taxes already with TaxAct but he offered to re-do them again with TaxCut and write up a review. It's a bit rough, but I think his message comes through clearly. Here are his thoughts:

TaxCut review: Full version with Federal, State and E-File. Included was Deduction Pro, a program to keep track of your donations to charity and other deductions.

I installed the program on a PC with Windows XP operating system. There were no problems with the installation and no crashes during install or running the program but I read reviews on Amazon.com that some people were having problems with Windows Vista and Mac OS X 10.5 Leopard.

The last two years I used the free version of TaxAct so that is what I am comparing TaxCut to. I have no experience with TurboTax or any other program offered. I had already filed my taxes for 2007 last month so I was just re-entering the data from what I had filed.  My tax situation is not very complex, I do file a 1040, itemized deductions, some capital gains and interest income and state filing is in only one state. Other than that it is pretty straight forward. If you have very complicated returns with Schedule C's for business, income with K-1 forms, or tricky deductions I can not attest to the accuracy or usability of this program. I also did not get into the Deduction Pro since I had already kept track and used an Excel spreadsheet to do this job. But I did open the program and played with it a little and it was pretty nice.

First impression is that the user interface is nice and easy to move around. Everything progressed in a logical sequence. I liked the listing of all the topics that were going to be covered before each section and you checked which topics you wanted to deal with and those were the only topics that it ran you through. It speeds things up when I do not have to go through every single topic like you have to do with TaxAct.

I really like how the 1099's were set up to fill in just like the 1099's that you get from the banks and brokerage houses.

The small movies were a nice touch and helpful.

The program even questioned a mis-keyed charitable deduction that I put in because it thought it was too high. Nice touch. (And no I was not trying to sneak in a larger tax refund.)

It did require me to go online and get the update for federal and there was not state form. The state forms had to be downloaded separately. This federal download was a 33 meg file and at my slow dial up connection is was going to take over three and a half hours to download. Instead I was able to download the update file at work from the TaxCut web page, in 3 minutes, and put it on a flash drive and then uploaded it at home the next night. (ya gotta love high speed internet service) I copied the file into the TaxCut folder and clicked on the .exe file and it updated the federal forms. However it did not load in a state form and I had to then download the state form from the slow dialup connection which was 4 meg large and took about a half hour. (A high speed connection would have taken less than a minute.) Once this was done I had the state form loaded and was easy to complete.

To my surprise the state form showed that I was to get a refund but I had paid the state when I filled the form out by had last month. Then I saw my mistake. On the hand written form that I filled out last month I had multiplied the stated tax by 4.1% and not 4.01%. Of course TaxCut calculated it correctly. Now I have to figure out how to amend a return. This mistake alone might make me a convert to pay the extra to have the computer file the state form. Up to now my motto was that the state form is so easy to do why pay $10 extra to just have it fill in a few numbers that come right off the federal form. An easy mistake to make but a $100 mistake.

Another dislike is the viewing of a 1040 form. I would like to find an easier way of looking at the Federal forms without having to print them out. It would be nice to be able to see the form at anytime with one click of the mouse. Maybe this is set up so people do not make a mistake and print out a form that is not completed. Whatever the rational, it is an inconvenience. I finally figured out a way to print the form as a pdf, save it, and then view it as a pdf with Acrobat Reader. I got pretty proficient at this so it was not too bad.

The cost of TaxCut is less than TurboTax but more expensive than TaxAct. The kicker is the convenience to e-file. TaxCut and TurboTax both have a hefty extra charge for this e-file service, but TaxAct will let you e-file for free. It sure stinks that these guys are gouging the customer for a convenience that should be free or a nominal charge.  There are also complaints on the Amazon.com reviews about how the price of the software jumping 25% over the previous year. That is a pretty substantial price jump for something that does not really change much from year to year. Plus you don't get a price break from downloading from the web on the TaxCut site. You can actually buy it cheaper at Amazon.com than from the TaxCut home page.  When are these companies going to learn that they can make a lot more money if they give a customer a 25% discount for downloading an electronic version from their home web page as compared with buying a CD that incurs all the costs of manufacturing, packaging, materials, distribution and the wholesaler profit margins? It just amazes me that they have not figured this out.

The bottom line is that TaxCut performs as it advertises, is easy to use, and is competitively priced.

Comments

[Jesse]

I think you have me convinced...I finished mine last night on Turbotax but I might try them on Taxcut.

[Kyle]

I'm using the 1065 version of TaxCut this year to do taxes for an LLC, and it is not user-friendly at all. It doesn't really guide you in any way, it just assumes you know what you're doing. I'm sure next year it will be easy, but this year I had no idea what I was doing and the software didn't help. I have always used TurboTax for my personal return and it's wonderful.

[Kevin]

Kyle - as a CPA, I would love to see what that 1065 looks like after TaxCut prepares it. Sounds a little scary.

[Jane]

This year I received a TaxCut CD in the mail. I installed it, paid $39.95 for it, and did my taxes. I then found out it was $19.95 to e-file each return (federal and state), another $40.00. Someone at work told me about TaxAct, so I decided to try it. My taxes came out exactly the same. Both were simple to use, but TaxAct was free. I paid a total of $21.90 to TaxAct for e-filing and for internet access to my information for X number of years. My taxes are similar to your co-worker's. Next year I'll start with TaxAct and skip paying the $39.95 (or more if they decide to up the price again).

[joey]

As a State Farm customer, you can file your federal and state tax using TurboTax for free. I filed for federal and two states with e-file through TurboTax without any problems. All money added up was a pretty good saving.

My friend used the TurboTax online and typed in all information she needed. She took notes on those important amount figures and then filed her tax on government's website for free.

Personally I like to use online version instead of spending money to buy the software. So, I don't need to worry about downloading files/forms, troubleshooting for installation problems and any updates/changes for each year.

[D Stevely]

TAX CUT 2008 is a disaster!! I just finished my taxes using Tax Cut Premium State + efile for 2008, and I can't file. You see, they haven't finished writing the Tax Cut program (as of Feb 2, 2009). It won't be finished until at least Feb 11. And, there are only 2-of-50 State Programs available (Calif is NOT one of them). I am going to have to turn to another tax program to file my taxes. I have lost ALL confidence I had in Tax Cut. I just asked for a refund.