Tick, Tick, Tick: Tax Time Approaches

What's that pit in your stomach? Ah, yes, tax time approaches. No doubt those W-2's and other important tax documents have been arriving in the mail since the start of the new year, signaling that the time is nigh to pull all your tax documents and expense receipts together so tax filing is a breeze....

Whether you pack all those docs up and ship them off to an accountant or prefer the do-it-yourself approach, tax-filing software can help provide a full picture of your tax situation. You may have your favorite by now, but here's a preliminary look at how two major tax software makers are trying to smooth the 2006 tax filing process for families.

Intuit TurboTax: The latest version of TurboTax Premium Investments has at least one notable change this year. The Deductions Maximizer tool takes the IRS jargon out of helping you find the most deductions to claim on your taxes. Instead of tax form titles you'll find category names that you'd put on folders in a home file cabinet: home, kids and family, medical expenses, education, charitable expenses....

Next to each possible deduction, you can click on a "Do I Qualify?" to get a simply worded description of each deduction and what you need to qualify for it. This latest version has the similar deduction-finding tools as the 2005 version, but the enhancements are found in the everyday language used to explain it all.

Another new feature is found in TurboTax Premier Investments 2006, which now includes Basis Pro from Gainskeeper, a tool which helps you figure the cost basis of stocks and mutual funds. To get all of the above features plus e-file options, expect to pay about $90.

H&R Block's TaxCut Premium: Clearly, 2006 is the year of reduced jargon. TaxCut, too, slims down and simplifies its word count in the interview questions posed to help you decide which deductions to claim and which figures to add when. TaxCut has done away with its three separate editions (Premium, Deluxe, and Standard) in favor of a one-size-fits-all Premium approach.

TaxCut offers its DeductionPro, which also tracks deductions from several categories. It continues to have another advantage over TurboTax; it's less expensive. Expect to pay about $60 for TaxCut Premium that includes federal, state, and e-file options.

This year, H&R Block also is introducing Tango, an online support and resource center to provide tax help and advice throughout the year. 

I'll be following up with a closer look at the 2006 TurboTax and TaxCut editions, and let you know which seems the easiest to use, which has the best support, and which we'll be going with in our house this year.

In the meantime, which tax filing software have you preferred in recent years? And what would like to see improved in either?

Related:

A Closer Look at TurboTax
How To: File Taxes for Free