Which tax preparation program should you use?

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With all the various 1099s that are coming into your mailboxes, you may be wondering how you should start doing all your taxes for 2007. It can get complicated especially if a lot of things have changed for you since you did it last year. You probably changed jobs. You probably started working for the first time. Maybe you bought your first house. Or for the few of you, maybe you just had your first child (ooops- j/k).

Anyway, consumer reports did an decent review on tax prep software last year comparing  Tax Cut and Turbo Tax using 4 different scenarios such as having a home business, rental property, or business expenses.  Consumer reports found that Tax Cut was “easier on the eyes” with better layout however Turbo Tax was described as being more convenient. Nevertheless, what CR found was that there were a few instances where you could have gotten a few deductions that were difficult to figure out or convenient enough to realize.  This includes the alternative energy deduction savings and cost of goods sold for a home business.

CR states that both products are good if you have a simple tax situation such as a home interest deduction, income from a standard job, maybe some misc other items as well.  For ease of use and more comprehensive information, they lean more toward Turbo Tax.

Ultimately if you think your tax situation is a bit complicated, CR recommends a tax professional prepare your returns.  For me, I’m just going to go and use the free program online called taxact.  It seems to be working pretty fine so far.

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