This is part 2 of my posts about tax software. Other parts in this series:
Part II: TurboTax, TaxCut, or TaxAct?
Which one do you choose among the 3 major tax software packages, TurboTax, TaxCut or TaxAct? It will depend on whether you used any of those before, and if you did, whether they can import the previous year’s data from a competitor’s file.
Because of various carryovers, if you used a software before, it’s easiest to stay with that one. This is perhaps the primary reason the vendors encourage you to use their online versions. Once you started using their online version, you are locked in with a high switching cost. Don’t bite. If you used the desktop version and you are happy with the cost and features, keep using that one is the easiest. If you want to switch, however, you must make sure the new package can import your previous year’s data. TurboTax is the market leader and it may not care for other vendors’ data format. TaxCut being the underdog wants to convert TurboTax customers to them so they have always built import functions.
If you haven’t used any software before or if you used online version last year but want to use desktop software this year, do your research and see which package works the best for you. Cnet, PC World and PC Magazine usually review these every year. Here are two articles on about.com which also link to reviews on Cnet and PC Magazine:
I’ve used both TurboTax and TaxCut in the past. They worked very similarly and I never had any problem with either TurboTax or TaxCut. If you provide the same input, I’m sure all packages will produce the same return and refund. The differences between the packages will be how the questions are asked and how easy to navigate between screens.
I chose TaxCut. It’s cheaper because it has a smaller market share. I’d want to encourage competition or else TurboTax will monopolize this business. TaxAct has even cheaper list prices but there are no software bundle deals that drive the cost to negative.
To be continued.
- Part 3: Tax Software: E-File or Mail?
Instant diversification in a low-cost ETF portfolio. Convenient and disciplined with automatic rebalancing. Minimize your taxes. Betterment.com.