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CD-ROM Tax Programs? Wasted Bytes

March 03, 1994|LAWRENCE J. MAGID | LAWRENCE J. MAGID is a Silicon Valley-based computer writer

IRS, meet CD-ROM. The two leading tax preparation programs, ChipSoft's TurboTax and Meca's TaxCut, are now available on multimedia compact discs for those who want moving pictures and sound along with forms and schedules.

The multimedia versions require an IBM-compatible personal computer with Windows, a CD-ROM drive and a sound board. There are also non-multimedia versions on floppy disks for Windows, Macintosh and MS-DOS.

Multimedia tax programs may be eye- and ear-catching, but when it comes to filling out your tax returns, they're not much more useful than the floppy disk versions of the same programs. More on that later, but first let's look at the basic tax preparation software you can get on a CD or floppy disk.

Any version of TurboTax and TaxCut can prepare your federal and, in many cases, state returns. The same can be said for Parson Technology's Personal Tax Edge and Computer Associate's CA-Simply Tax. In each case, you have the option of entering information directly on an on-screen replica of an IRS form, or submitting to an "interview" and letting the program put the data on the forms for you.

TaxCut does the best job at shielding you from IRS forms. The program pioneered the use of the interview format and this year has added another help system called the Navigator, which uses graphics to help guide you through the return. The interview takes place on the top half of the screen, while tax and program advice appear on the bottom. You can optionally view the tax forms on the bottom of the screen as you enter data on top.


TurboTax also has an interview system, called EasyStep, but it's not quite as easy to use as TaxCut's. The program is very good for people who are comfortable with filling out IRS forms. Yet there is still plenty of context-sensitive on-line help, including official IRS instructions that are keyed to whatever form and line you're working on.

Both programs provide access to all the forms most people need, and they greatly reduce data entry by automatically copying information from one form to another. They also do your arithmetic and calculate the amount due or refundable. Each of them prints IRS-approved forms and makes it possible to send them in electronically through an IRS-approved service bureau.

These programs are clearly better than filling out your forms by hand. At a street price of less than $40 (add $10 to $15 for the CD-ROM versions), they're probably more cost-effective than going to one of the mass-market tax preparation services staffed by people with limited training.

However, computer programs don't protect you from entering incorrect information, and they are limited in terms of how much advice they can give you when it comes to lowering your tax obligation. Anyone with a complicated tax scenario may be better off with a CPA, tax attorney or other tax professional.

By delivering special versions on CD-ROM, Meca and ChipSoft have been able to add instructional material that, in theory, should make the programs easier to use. I'm not convinced.

ChipSoft took a cafeteria approach with its multimedia version. In addition to the basic Windows version of TurboTax, there are several extra programs, including a video guide featuring Fortune magazine Managing Editor Marshall Loeb, an on-disc version of J.K. Lasser's best-selling tax guide, an interactive tax savings guide and IRS on-line instructions.

The TurboTax CD also comes with the state tax preparation software for California and New York. Residents of other states can use the enclosed coupon to order their state software by mail, at no extra charge.


Watching mini-movies of Loeb talking about taxes isn't my idea of entertainment, and it's not an efficient way to learn about tax savings. He does give some excellent advice, but his comments would be just as easy to understand in written form. Besides, the film clips are very basic and general. You can get far more information on TV and radio talk shows.

Lasser's "Your Income Tax," which does not include any sound or video, contains useful advice, but ChipSoft chose a poor way to deliver it. To read the guide (which is a graphic image of the printed book) you need to install the Adobe Acrobat Reader. The software, which comes on the CD, is copied to your hard disk. You must also copy another piece of software, Adobe Type Manager, which not only takes more disk space but, once installed, runs automatically every time you start Windows, whether you need it or not, hogging memory.

I wouldn't mind this if the CD came with an un-install program to get rid of these files. But it doesn't. I'm not sure which is harder, removing a Windows program from the various places it has inscribed itself on your system or filling out IRS tax forms by hand.

TaxCut, by the way, does come with an un-install option. After you're done with your taxes, the program automatically removes itself from your hard disk, although it does not delete your data files.

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