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Easing the Headache, If Not the Pain

YOUR TAXES: Strategies, Issues, Solutions * One in an occasional series

March 10, 1997|LAWRENCE J. MAGID

I don't know of any software that can relieve you of your obligations to pay taxes, but there are programs that can at least make it easier for you to fill out the forms, calculate your taxes and print your returns.

They can also help you prepare an electronic return that, for a fee of about $10, can be filed by modem. Leading programs include TurboTax from Intuit (, Kiplinger TaxCut from Block Financial Software ( and Personal Tax Edge from Parsons Technology (

One nice thing about these programs is that they come with all the forms most people need. Should you require a form that doesn't come with the program, you can fill it out by hand and enter the form's bottom line on your electronic form.

The programs have a lot in common. All three begin by conducting an interview where the software asks questions and enters information on the appropriate forms. In some cases, the information is automatically entered on several forms, saving you lots of typing.

If you like the look of IRS forms, you can display them on-screen and enter the information directly. Each program offers both a regular and multimedia version. The nuts and bolts are the same, but the multimedia CD-ROMs include expert tax advice via video and audio.

Each program also imports data from popular financial programs, such as Quicken and Microsoft Money, making it even easier if you use these programs to maintain your financial records throughout the year. Finally, all three programs will print your return or electronically send your return to a service bureau, which, for a $10 fee, will forward it to the IRS.

TaxCut ($19.95 for standard, about $30 for multimedia) and TurboTax ($34.95 for standard, $49.95 for multimedia) can be purchased at software stores. Street prices on both products can be dramatically lower. Personal Tax Edge is available only from Parsons ([800] 779-6000) at $19.95 for either the standard or the multimedia version.

If you're in a hurry, you can download the non-multimedia versions of any of these products from the companies' Web sites.

Regardless of which software you use, there is always the possibility of a bug that could affect the accuracy of your return. Bug reports surface each year, and there has recently been a reported bug in MacInTax. Before filing your return, it's a good idea to check the company's Web site. If you have Windows 95 and Internet access, you can download a free trial version of Oil Change from CyberMedia's Web site (, which will search the Internet to see if there is an update or bug fix for your tax program.

Although these programs have become quite sophisticated, they are not for everyone. They're a lot better than filling out a return manually, but people with complicated returns or those who just want professional help, strategic advice or hand holding might still be better off going to a tax professional. I use tax software to get a rough idea of what I owe, but I still rely on a CPA to be sure I'm taking advantage of every legal deduction.

TurboTax is by far the most popular tax-preparation program, and it has a well-deserved following. It has an excellent interview process, a wide choice of forms (about 150) and versions for all states that levy income tax ($24.95 per state). The multimedia CD-ROM version is a tax library on a disc that features video help from Fortune magazine Editor Marshall Loeb and tax expert Mary Sprouse as well as electronic copies of two books: Jeff Schnepper's "How To Pay Zero Taxes" and Sprouse's "Money Magazine's Income Tax Handbook."

Like the other programs, you can complete your return by answering on-screen questions. But if you ever want to see the actual tax form, you can click a button on the screen to bring it up. You can also enter information directly on the form and switch between that view and the "easy step" interview process as often as necessary.

As you work, a "refund monitor" (wishful thinking) keeps you posted on what's coming to you or how much you owe. This number changes as you work on your return. The program can also display a "U.S. Averages" table that shows how each line of your return compares with taxpayers in general or others in your income bracket.

The interview also keeps you posted on possible deductions and savings you might have overlooked. It let me know, for example, that tuition reimbursements may not be taxable thanks to a new law. The multimedia version provides video at key points as you work, and when you're done it offers you a review that checks for errors, "audit flags," missing data and other problems.

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