**EDITOR’S NOTE: THE INFORMATION BELOW MIGHT NOT BE UP-TO-DATE!
TurboTax and TaxCut are widely regarded as the best tax software for consumers, and both have their fair share of fans. Given that I just sat down to start working on our taxes this weekend, I thought it would be worth comparing the two. Hopefully, it will help anyone who’s trying to decide between them.
Note that I haven’t actually made it all the way through my taxes (yet), so some of what follows is based on my preliminary impressions. Also note that I’ve never used TaxACT, so it’s not included.
The Interview
Both TurboTax and TaxCut use an interview format to get the information that they need to properly fill out your various tax forms. While both packages do their best to point out tax law changes — as well as life events that might impact taxes — the TurboTax interview feels a bit more comprehensive.
Data Importing
Both TurboTax and TaxCut import data from prior year tax returns, and each is capable of importing data from the other. Beyond this, TurboTax also has the ability to directly import W-2 and 1098/1099 data directly from employers and financial institutions. TaxCut can’t do this, which is kind of a bummer.
Built-In Support
Both packages offer a healthy dose of frequently asked questions (FAQs) and extensive help files. TaxCut does a nice job of presenting this information in the sidebar as you progress through the interview. Something that I really like about TurboTax, however, is that they pull in the most common questions that users have been asking online. This implementation makes it very easy to dig for information that’s too specific to make it onto a list of FAQs. It’s also straightforward if you want to post questions of your own.
Live Support
The Premium version of TaxCut comes with one free phone or e-mail help session on a single topic (additional sessions are $19.95/each). In addition, they offer free audit support via H&R Block.
For their part, TurboTax has a downloadable self-help audit support center, and they likewise offer live support. However, there’s no free (live) help included with TurboTax. Rather, you’ll have to pay as you go.
Price Comparison
Pricing for TurboTax ranges from $29.95 for the basic version. Pricing goes up to $74.95 for the Home & Business version and $109.95 for the full-blown Business version. There is also a free version for those with very simple taxes.
TaxCut starts at $19.95 for the basic version and goes up to $79.95 for the Home & Business version. There is no free version, and they also don’t have a full-blow business version.
Both offer free federal e-filing.
Which is Better?
Honestly, the debate over which tax software is the best will likely come down to personal preference. I’ve been partial to TurboTax in the past, and I still feel that way. For what it’s worth, PC Magazine also considers TurboTax to be the best. Don’t get me wrong, TaxCut is a fine program, but it’s just not my cup of tea.
I’ve used Taxcut since 1998, but this year (2012) I’m using both to finally compare.
Taxcut (or H&R Home as it’s now called) was as usual easy and quick. I had a lot of manual entering of data as I moved around a lot of investments. But all in all– I sailed through my taxes once again using my old faithful Taxcut.
Onto Turbotax– I like the feel of the program. However, where as Taxcut asks you one or two questions at a time per page it seems Turbotax throws everything at you at once making pages a bit overwhelming and tedious at times. Not a big deal.
What was a big deal– I uploaded a 1099-DIV using Turbotax and it seemed to upload my 1099-DIV AND 1099-B and jumble everything up AND I STILL had to enter other info. Importing made everything incomplete and confusing so I started from scratch and will eneter everything manually.
So far my vote is for Taxcut…
I have been using TurboTax for 7 years and I love it. Its cheaper and I get to play with the numbers before I file.
Another TaxAct fan here…I’ve used the online version for sometime with no problems.
The price is right and it seems to do a good job of finding all deductions. There is extra online help available if you get stuck on any parts of your federal return. Highly recommended…
I just got audited by state of WI!!! Turbo Tax can not handle HSAs – and I didn’t check this until 3 tax years later. With high deductible insurance plans being the wave of the future – WATCH OUT. If you’re using Turbo Tax and WI resident, make sure you’re reviewing this. No mention at all on Turbo tax support page. It is as if the problem doesn’t exist. After 4 years of using it I will never buy it again.
Anyone using Tax Cut please check the taxes you owe per Tax Cut and the IRS tables. They are one row off.
I’ve used TurboTax since it first came out (Parson Technology). My taxes are somewhat complex and I need many supplementary forms. Its a great product but it keeps getting more and more expensive. I’m switching to H&R Block’s software this year. If prices keep going up like this, I’ll switch back to paper forms. I still own a desktop calculator!
All I have to say is rapid refund into my bank account . more mony fast and easy . and offers a free version. sate and fed. for $29.00 . Turbo tax less money and wanted $93.00 no way . to much money . three years I used turbo tax never again . I just want to help others and please try H&R block .com you will love it . I will spead the word . dont get rip off with othere expensive web sites . try it its free.
I used to use turbo tax. but now I will use H& R block.com . turbo tax was charging me $93.00 to do my taxes . HR block $29.00 for state and fed taxes and I even got more more money. never again will I use turbo tax . H &R block even offers a free verson . it is very easy to use . I say try it . I give it A++++++++++
Thank you for your submission to the Small and Home Business blog carnival.
I too am a TaxAct fan, used it for the past 4 years. There is no state income tax where I live, so for me, TaxAct is 100% free (including electronic e-filing). Of course the free version offers an upgrade to the Deluxe version for extra ‘advice’, but I’ve done taxes enough that I don’t need to go the deluxe route.
I switched from Turbo Tax to Tax Act this year after Turbo Tax wanted close to $120 to file my Federal and State Taxes. I decided to try out Tax Act just to see how it would be and what numbers it would come up with. Using just the “Regular” Tax package, I was able to input my consulting 1099-MISC forms in and do all the business deductions available in TurboTax – all for under $30.00. TaxAct’s return showed the same exact Fed/State refund amounts that TurboTax showed. As far as I’m concered, paying a $90 premium for a slightly slicker website interface is not justifiable.
I double checked my W2’s and none say Geithner on them, and last I check I wasn’t an idiot (I guess I am since i’m not treasury secretary) so I’m safe with Turbotax
Responding to Heather’s comment at 9:07am…
I too have a HSA that I have to input into my tax forms, and every year with TurboTax I have to dig around for the appropriate box/form.
TaxAct found it right away, which was nice. This year however, I’m going to have someone do my taxes (I always end up owing more than I think I should).
I got a free trial of Turbo Tax in the mail last year, and did everything but file (the point at which I would have had to pay). Then I redid it all on TaxAct, and was shocked to find that Turbo Tax had no idea how to handle our HSA and TaxAct did!!! TaxAct calculated a refund of several hundred dollars more than Turbo Tax said we would get.
I realize HSAs are unusual, especially the way we do it – we deposit after-tax money into the account instead of having an employer deposit it pre-tax (goes along with unemployment and COBRA insurance) – but come on, HSAs have been around long enough for a premium tax software company to get their act together!!!
I would agree on your conclusion. Although I’ve never used TaxCut, I’ve used TurboTax since I first started doing my taxes as a teenager and have zero complaints.
Simple and easy to use…great program.
It almost makes doing taxes fun…is that possible?!
Nickel –
H&R does offer a free federal edition & E-File. You can find it here http://www.hrblock.com/taxes/products/product.jsp?productId=201
Thanks for the tale of the tape.
I have been using TurboTax for a few years now. I’ve usually always gotten my return back before the end of February, direct deposited in a week, maybe ten days. Takes a whole hour.
A Shout -out to TaxAct. It started as a free app which I used for two years, then started buying it. I’ve done so for 10 years now and it works great!
If you tax situation is simple, use either. TaxCut may not handle complex business issues or investments as well as TurboTax based on my experience last year. I am puzzled about the qualifications and tax knowledge of reviewers who say the two products will both handle every return. TaxCut did not have any idea what to do with K1s or 1065s last year. It also had a marginal understanding of AMT. If it is better this year the box and advertising did not address my issues from last year.
And to the early filers–This year may be the one time it does not pay as our illustrious legislators are still in Washington DC trying to figure out how to help us with the tax code.
-steve who is guarding his wallet
I actually used both products this year – just for comparison sake. I filed with Tax Cut, as I have done for the past three years, but I also re-did my taxes using Turbo Tax Online.
I felt the interview process in Turbo Tax is better. It does much better job of allowing you to completely skip items that don’t pertain to your situation, where as Tax Cut has you clicking through a lot of it. I can get through my taxes a little bit faster with Turbo Tax then I can Tax Cut as a result. Turbo Tax also allows you to download and process a school-district tax form, where as Tax Cut doesn’t have any support for this as far as I can tell.
On the flip-side, Tax Cut seems to be a better deal for the money. It’s always 10 to 15 dollars cheaper and it has been throwing in the free federal e-file for awhile now, I believe the free e-file was new to Turbo Tax this year. I have also received a free DVD (of my choosing – up to a $20 value) from my local Best Buy for the past two years when I bought Tax Cut, which makes the price a little easier to stomach.
I was relieved to see that both Tax Cut and Turbo Tax gave me the exact same results though – my Federal and State refunds were the exact same w/ both products.
Brandon: Heh. 🙂
It may be “only” Feb 9th, but you yourself have already filed. I think these sorts of things come out in rapid succession because they’re time sensitive, and everyone wants to publish their views while they’re still relevant.
As an aside, if you want to avoid overload in the future, you should just stop reading all of those other sites. 🙂
*looks at date* Man, only Feb 9th? I am sick of all the pfblogosphere posts about TaxCut v. TurboTax 🙂 Looks like you wrote a nice one anyway.
I have used the free Turbotax in the past since my AGI was low enough. This year I piggybacked on a remaining free e-file on my father-in-law’s copy of Taxcut (after I had done everything in the online version of Turbotax first before I realized my AGI was too high). I found the online Turbotax to be sometimes buggy about saving and loading, and I found some of the interview questions to be less obtuse in Taxcut. Similarly though, some questions were better laid out in Turbotax. The main problem with Turbotax online version was that I never figured out the way to jump to the middle or end of a topic, so I had to scroll through 20 questions I had already answered to fix the thing that was messed up.
I am switching to Taxcut this year since it was a good $15.00 cheaper. I’ve been a turbo tax guy since I started doing my own taxes (dad still uses pencil and paper). I earn $15.00 an hour so I figure it’s worth the price.