Software to Help You File Income Tax
If you’re like most Americans, you probably have yet to fill out your tax return. You still have a couple of months, but it’s not too early to think about whether to use a personal computer to help you along.
There are several companies that produce tax preparation software. The leaders are ChipSoft of San Diego and Meca of Fairfield, Conn. ChipSoft publishes TurboTax for MS-DOS and Windows as well as MacinTax for the Macintosh. Meca offers TaxCut versions for both DOS and Windows. Both companies also offer versions for many states, including California.
There are several advantages to using a computer to do your taxes. First of all, the software does all the math for you, eliminating a lot of human error. More important, all the forms that most taxpayers need are included with the programs.
You don’t have to order forms or even search around your desk. You just bring them up on your screen and fill them out. The programs automatically carry forward data from each form and schedule to the appropriate line of the 1040.
If you use a personal finance program such as Quicken or Managing Your Money to keep track of your finances during the year, you can import the data into either of these programs. Finally, you can use the program to print out IRS-acceptable forms, or you can send your disk in the mail (or via modem) to a service bureau, which, for a nominal fee, will file it for you electronically.
You won’t need the IRS instruction manuals; the instructions are available on screen. In fact, both companies go beyond just IRS instructions with their own expert tax advice. TaxCut, based on an “expert system,” offers extensive on-line help. TurboTax and MacinTax also offer the user plenty of help.
The programs can also be used for tax planning. Each offers a “what if” work sheet that allows you to test different tax strategies and compare the bottom line.
The DOS version of TurboTax is pretty straightforward. If you know your way around the IRS forms, you can enter data directly on the 1040 or any necessary form or schedule. For example, if your cursor is on line 8a (taxable interest income), you can press F5 to bring up the requisite Schedule B. Once you’ve completed the schedule, you press a key and are taken back to the 1040, with the information carried forward to line 8a.
For those not so comfortable with IRS forms, there are several help systems. The interview process asks you questions and, depending on your answer, takes you to the appropriate location on whatever form is needed for that data. The File Cabinet is an alphabetical index that provides instructions and, again, takes you to the appropriate form and line. The “personal tax issues” help system is designed for those who are unfamiliar with the tax process. It walks you through a variety of issues.
If you like the look of IRS forms, you’ll love MacinTax and the Windows version of TurboTax. The screens look exactly like the paper forms. Only they’re smarter. As you work through the 1040, you use your mouse to click on the appropriate line. Clicking on the text area of a line brings up help. Like the DOS version, the programs have an interview process that takes you to the correct line, depending on how you answer the questions.
Meca’s TaxCut takes a different approach. The program is organized around the “ask the expert” concept. The program was developed by tax attorney Dan Caine, who not only provides help in filling out forms, but offers strategy, tips and tax advice throughout the program.
The interview process makes you feel as if you’re sitting across the table from a tax professional. The program asks you questions and, instead of just directing you to the right form, enters the information for you. You don’t have to know anything about IRS forms.
Like TurboTax, TaxCut offers a great many forms and schedules, so it’s suitable for a variety of users.
The Windows version of TaxCut doesn’t have a “what you see is what you get” appearance. But it’s easy on the eyes (the type is larger than TurboTax for Windows and MacinTax) and the printed forms are true replicas of IRS forms.
TaxCut also offers a “shoe box’ function for tax documents that don’t seem to have a home. You start by telling TaxCut where the item is from--employer, bank, state or city, etc.--and it asks you questions about the item. It eventually enters the data on the appropriate form or schedule.
I can recommend either of these programs to anyone who wants to do his or her own taxes by computer. If your return is simple, you might be better off using a pen to fill out a 1040EZ. If you have a complicated return, or need strategic advice, you should consider consulting a tax professional. Another option is to use a program to complete your initial return and consult a tax professional before filing.
MacinTax and the Windows version of TurboTax each have a suggested retail price of $99.95. The DOS version costs $79.95. ChipSoft is located at 6330 Nancy Ridge Road, Suite 103, San Diego, Calif. 92121. Phone: (619) 453-8722.
TaxCut has a suggested retail price of $89.95 for DOS and $99.95 for Windows. The company also publishes a 1040EZ version for DOS at $29.95. State versions are $39.95. MecaSoftware Inc. is located at 55 Walls Dr., Fairfield, Conn. 06430. Phone: (203) 256-5000 or (800) 288-MECA.
Computer File welcomes your comments but regrets that the author cannot respond individually to letters. Write to Lawrence J. Magid, P.O. Box 620477, Woodside, Calif. 94062, or contact the L. Magid account on the MCI electronic mail system.
