A Look at Tax Guides and Tax Software
Anyone who has decided to forgo the lure of a professional tax preparer and fill out his or her own income tax forms this year might benefit from a tax guide or tax-filing software.
Although IRS tax forms and instructions may be easier to read, tax law is more complicated, and Americans are likely to be doing more calculations and using more forms than ever before.
For extra guidance and simplified examples, you might consider buying one of several of the tax guides that are available. Those with a high-tech bent might opt for a computer software program instead.
There are four widely recognized tax filing guides on the market--J. K. Lasser’s Your Income Tax 1992, Ernst & Young Tax Guide 1992, H&R; Block 1992 Income Tax Guide, and Consumer Reports Guide to Income Tax Preparation. And there are two popular computer programs: ChipSoft’s TurboTax and Meca’s TaxCut 1040.
For those with personal computers and some savvy, the software is the easiest way to go. It gets you into the right forms, gives you advice and even does the math.
The two programs take different approaches. TurboTax brings up a replica of a 1040 form. Anyone unsure about how to fill in a line hits a key to get help, and the computer offers advice on what to do.
With TaxCut software, you may not need to see the forms. Instead, the program interviews you, puts the information you supply into the appropriate schedules and boxes, and does the calculation. Then it prints everything out on the appropriate, IRS-approved forms.
Neither program is cheap. Chip Soft charges between $79.95 and $99.95 for TurboTax, depending on the kind of computer you have, while Meca’s suggested retail price ranges from $89.95 to $99.95.
If you’re no computer aficionado, the printed booklets are less intimidating and far cheaper, ranging from $11.95 to $14.
Suggested retail prices, of course, aren’t always the selling prices for books or software. Some discount stores automatically cut 10% to 20% off retail prices. And late filers might find the guides on sale; tax books, like Christmas cards, are seasonal.
Some of the highlights of each:
* J. K. Lasser’s Your Income Tax 1992 offers what may be the simplest organizational structure for those moderately familiar with the tax forms. In the front of the book, there’s a 1040 form with a page or section number by each line, so that anyone with a question need only go to the section listed for a reading of what to do.
If you pay alimony, for example, and aren’t sure whether it’s tax-deductible, the book refers readers to section 1.37, which spells out when alimony payments are and aren’t deductible. It also gives divorcing couples tips on how to structure their divorce settlements for the greatest tax benefit.
The book also has a tax organizer, sample forms, tax tables and a glossary. Readers who still have tax questions can call the company’s help line--a New York number listed in the book. Suggested retail price: $14.
* The H&R; Block 1992 Income Tax Guide follows a similar format. But instead of listing specific section numbers next to each line on the 1040 form, it refers readers to different chapters in the book. The first chapters deal with the first sections on the 1040 and work their way back.
It also has a section titled Topics of Special Interest, which includes information about children and taxes and tax-favored ways to save for college. The Block guide costs $11.95, and comes with a $10 coupon toward tax preparation or electronic filing services at H&R; Block offices.
* The Ernst & Young Tax Guide 1992 doesn’t offer the nifty 1040 structure, but does have a table of contents for everyone--a general table, then one for families, then homeowners, investors, entrepreneurs, etc. The guide also gives a lot of tax advice and provides usable tax forms, which can actually be filled out and sent in. (Most of the other books provide only samples.) Suggested retail price: $12.95.
* Finally, there’s the Consumer Reports Guide to Income Tax Preparation. As a fan of Consumer Reports’ other publications, I expected to like this guide, which costs $13.95, best of all. Some aspects of it are well-designed. For example, sections that talk about deductions and credits that require specific forms are generally coupled with samples of those forms, so consumers can fill in as they go. Unfortunately, the text warns that the tax tables and almost all the forms are “proofs” as of July 15, 1991, and subject to change. Clearly finalized forms would have been a better idea.
