TaxCut Vs. TurboTax
TaxCut and TurboTax, which are the two leading software options for do-it-yourself tax return preparation, offer similar options and pricing. Differences in terms of audit support, state return pricing, and automated downloading of 1099s from financial institutions may make one option more attractive than another for certain taxpayers.
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Features
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TaxCut and TurboTax, which are both popular options for do-it-yourself tax return preparation, are similar in many ways. Both feature a time-saving interview process and an automated calculation window that displays the tax owed or refund or tax owed as the return is prepared. TaxCut and TurboTax include automatic updates, error-checking, and promises to pay IRS penalties if the software prepares an inaccurate return. Both make importing the prior year's data easy, and offer a 60-day money back guarantee. TaxCut and TurboTax offer free support via phone or chat, searchable help files, training videos, and the ability to print or e-file your return.
Tax Advice
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Both programs offer professional phone advice. TurboTax's "Live Tax Advice," which promises an answer by a trained tax professional within an hour of submitting a question online, costs $29.95 for the first 20 minutes of unlimited questions and $19.95 for each additional 20 minutes (for federal tax questions only). In contrast, TaxCut's professionals answer federal and state questions by phone or e-mail at a cost of $19.95 per question, allowing one free question for Premium users. One question is also allowed for TaxCut Basic through Jan. 31 of the year following the tax year.
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Audit Support
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TurboTax and TaxCut offer a level of audit support for do-it-yourself tax return preparers. TurboTax includes a helpful risk meter to estimate your probability of an audit, and charges $40 for audit defense in federal and state proceedings. In contrast, the cost of TaxCut includes professional assistance with audit-related preparation and correspondence, as well as professional representation during an audit. If you start your tax return but get too busy to finish it, procrastinate too long or decide you would rather have a professional complete your taxes, both TurboTax and TaxCut have options.
Basic Pricing
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TaxCut's least expensive do-it-yourself tax return option is $19.95, while TurboTax offers a free option for simple returns. Both software offer three basic pricing options. TaxCut options range from $19.95 to $79.95, while TurboTax ranges from $29.95 to $74.95 (for personal returns). While TaxCut offers a federal and state option for $15 more, TurboTax charges $34.95 to add state tax software at the premium level.
Other Considerations
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At the higher level, TaxCut will have a professional answer unlimited questions, review, and sign the federal return (state is an additional $30). Outside of their "Live Tax Advice" service, TurboTax Pro offers a one-time submission of questions and professional review but no signature. TaxCut's audit defense service (which is included in the price) and professional signature with unlimited questions probably make it the better value for many. However, the fact that TurboTax downloads 1099 forms from most financial institutions while TaxCut does not may sway the decision of taxpayers with many investments.
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References
- Photo Credit Image by Flickr.com, courtesy of Rudolf Schuba
