The Tax Programs Cometh

Along with the geese flying south and the bears hibernating comes another sign of the season…tax software reappears on the scene. From its lowly beginnings as an electronic tax form, tax software has become so user friendly that the software is now more user friendly than most accountants!

I got to preview the latest version of TurboTax from Intuit, and this year they're gunning to become the taxpayer's best friend. According to Intuit, the most notable changes in the new version (available for download on November 15) are in the ease of use, personalization, and audit areas. I'll try to translate the marketing speak.

Making It Easy

Turns out that one of the things that freaks people out the most about their taxes is when something about their life status changes. Having a baby? Getting married? Sending a kid to college? Along with the usual name, rank, and serial number-type questions, it asks you about these life-changing moments and then whisks you down the appropriate path. The results make things friendlier than ever before, though of course they haven't come up with anything close to an exhaustive list (death of a spouse, retirement, new business startup…to name a few).

As for personalization, TurboTax is taking a bold step. Think tax software meets social networking. They're building a community where people can ask and answer questions of each other. Those answers deemed best by the community will be ranked higher in the list. Truly a bold experiment, and you may get some wonderfully educated answers from other taxpayers (or not). I've never thought that the wisdom of the crowds was that reliable, but at the very least it's going to be interesting reading.

The final area that TurboTax has something to really talk about is audit support. They've spent a great deal of time developing a way to reduce your risk of an audit by flagging certain things in your tax return that might set off a red light over at the IRS. If you say you have joint custody of a child, for example, the odds are high that the IRS will look at the returns of both parents to see how they're claiming the child tax credit. The chance of an audit is depicted very visually. Once these incidents are flagged there's also a new section that tells you what to do next. Depending on the letter you receive from the government, that could mean anything from sending back a form to preparing for a full audit.

TurboTax has been around long enough to have perfected the recipe for filling out your tax return with the least amount of pain. This year, icons and visual representations, questions asked in plain English, and a carefully thought-out logic that actually determines where you go in the program based on the information it has about you are all part of the revision.

Think of it this way, this year's TurboTax is like getting an electronic version of the current tax forms with a translator/buddy that takes what the IRS says and dishes it to you like a friend.

Happy tax season—sheesh, it's not even Thanksgiving yet.