How to Do Taxes using TurboTax or TaxCut

TaxCut and TurboTax are the two biggest software programs that allow you to do your own taxes. Both these programs, like some other brand name products, are extremely user-friendly and will walk you through everything you need to do to get your taxes filed right.

Difficulty: Easy

Instructions

1. 
    

   First you need to get all your paperwork organized. You will have to do this whether you use a computer software or deliver information to an accountant.

2. I look for the best deal on the market when buying software. Some years rebates are offered, some stores offer special discounts, and sometimes it's worth saving special promotion discounts from retailers. It is rare to find a legitimate, seriously discounted version of either TaxCut or TurboTax for the current year.

3. Install the disks as directed by the quick installation instructions. It should be very simple and straight-forward.

4. If you are an old pro with taxes and want to work on your taxes as if they were ordinary sheets of paper, you can skip the interview and go to 'Forms' filling out each sheet separately. But the real advantage of the program is to fill out the interview so the program will customize your tax forms and lead you, step by step in filling them out. You need know nothing about accounting, the current tax laws nor do you need to be good at math to fill out the interview. If you are somewhat knowledgeable about taxes, once your forms are all filled out, you can play with different categories and sometimes find more tax savings. This works well if you are filing a schedule C for a business and want to test out some expenses to see if they are more advantageous when entered for business or personal use.

5. TaxCut offers different software products for different tax needs: 'Basic', 'Premium Premium with State', and 'Home and Business with State'. TurboTax offers a similar array of products. Quicken, Microsoft Money, and Managing Your Money -- from the four most recent versions -- can be imported directly to TaxCut but it does not import from business software such as QuickBooks. TurboTax will import form the latest versions of Quickbooks.

6. On the downside, TaxCut has reduced some of their features over the past few years and they do push their accounting advice services rather heavily. TurboTax offers more interactivity with other programs, but is more expensive than TaxCut. Both software makers claim to offer support should you have an audit. Both programs also offer money management suggestions, information on tax updates and help for projecting and organizing your future taxes.

Resources

• TurboTax
• TaxCut

[Sugarbush]

on 11/25/2008 Thank you. You made me feel more comfortable with using Turbo Tax. More tax preparers will no doubt lose business this year to these programs. My tax preparer charged me $400 two years ago, so last year I used H&R Block and to my surprise their cost was $400 also!