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Sunday, February 25, 2007

How to choose the right tax software

Tax season just started and with the help of smart and easy-to-use software, millions of Americans will take to their computers this year to prepare their own taxes. Here are some important facts to consider before you buy the right tax software for you.

Two popular programs are Turbo Tax from the makers of Quicken and QuickBooks and H&R Block's Tax Cut.

The bought of the product are easy-to-use for anyone with basic computer skills. Those familiar with accounting programs such as Quicken and Microsoft Money will appreciate the greater control and feature selection Turbo Tax offers.

Maximize your Refund with TurboTax

Basically, all tax software works the same. The least expensive versions of the software are suitable for taxpayers who would file IRS form 1040EZ while the more capable editions are for more complex tax situations such as income from investments, self employment and so on. Also available are online versions which do not require a program to be installed on your computer. Computer software is usually not returnable once it is used, so compare the features of all versions before making a decision and remember, it's better to have more functionality than too little.

Want more out of your online tax preparation? Compare TaxCut Premium + State + E-file to TurboTax® Deluxe.

In addition to price and features, you might want to consider the tax software's suitability with the financial software you are already using. A great time- saving tool to import related information into the tax program rather than typing each item by hand. Your tax software can automatically transfer data from accounting software such as Quicken, QuickBooks or Microsoft Money and financial institutions which may include your bank, your credit card company and your payroll provider. But, if you do end up with two programs that are not compatible, try exporting the data into a TXF file. This is a standard file format that many applications understand.

Once you have an idea which program will work best for you, check to see if you can get it for free. Turbo Tax and Tax Cut are both available through the FreeFile program, which is open to taxpayers with an adjusted gross income of $52,000 or less.

Tax software certainly makes it easy to avoid a trip to the accountant. Still, keep in mind that the final results will only be as accurate as the information you give the program. If you have questions or need help understanding your tax situation, ask a professional. Whether you consult your own accountant or one of the tax experts available from Intuit or H&R block, remember you can do it yourself without going it alone.

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Want more out of your online tax preparation? Compare TaxCut Basic Online to TaxACT®


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