Like TurboTax and TaxCut, Personal Tax Edge lets you import data from personal financial managers (like Quicken and Microsoft Money), enter it with the help of an interview, check it when you're done, and receive some tax-saving tips.
Tax Edge's tax-planning option also offers what-if scenarios--including a feature that explores how changing your employee withholding will affect your taxes in the future--and a report that suggests ways to reduce next year's tax bill based on your current data. The program's tax-planning tips are more generic than TurboTax's or TaxCut's. The help option offers IRS instructions, advice from J.K. Lasser, a list of common questions and answers, and the complete text of the 1996 Federal Tax Law update.
Filing Your Return
Once your return is finished, you can print it, sign it, and mail it to the IRS--or you can use a high-tech alternative: file electronically. Electronically filed returns usually get processed faster, so you will probably get a refund faster. There is also a smaller chance of error because your computer handles the calculations; IRS employees, who sometimes do make mistakes, don't reenter the data. (Each vendor charges about $10 for electronic filing.)
If you're determined to put your John Hancock on your return, consider printing the new Form 1040PC. This modified version of the standard Form 1040 prints only those lines that have been filled with a number other than zero. The form also should help reduce data-entry errors at the IRS office and speed your refund.
And speaking of errors, all three programs are guaranteed against any calculation error in the software. If the IRS finds one, the manufacturers will pay your penalty and interest costs. This kind of help is enough to change April 15 from a day of reckoning to a walk in the park.
Minding Your Own Business
David DeLong, chief financial officer at Dynamix Group, in Roswell, Ga., was going nuts. Spread before him was a daunting array of corporate tax forms and pages of complex tax regulations. Before he even dove into the mess, DeLong knew that his strong background in finance wasn't enough to tackle the tax implications of the company's incorporation the last week in September 1995 and its grand opening a week later. But he also knew that the computer reseller didn't need an accountant yet--the company didn't earn any revenues in 1995 (it would earn $5.1 million in 1996)--and that he wasn't ready to hire one just to do his taxes.
What was a beleaguered CFO to do?
DeLong turned to Intuit's TurboTax for Business (on CD-ROM), the most popular consumer business tax-preparation software available. "It was like sitting across the desk from an accountant asking questions," says DeLong. "It took a few hours. But it probably went more smoothly than speaking to a person because the software was methodical, and we didn't get sidetracked."
Here's how it works. First, to receive the appropriate IRS forms for your type of business, you must register the program by calling Intuit during installation and identifying the type of business. You will receive access codes to Form 1040 Schedule C for sole proprietorships, Form 1065 for partnerships, Form 1120 for corporations, and Form 1120S for S corporations.
You can start TurboTax for Business by importing data from QuickBooks, Intuit's small-business accounting program, as well as from Quicken or any other accounting software that supports the tax exchange file (TXF) format. The program's design and steps are like the personal version, but it also comes with additional business tax forms and a wealth of business-related help and advice. Among the reference materials: J.K. Lasser's Tax Deductions for Small Business, by Barbara Weltman, and Tax Savvy for Small Business, by tax attorney Frederick W. Daily.
The business-related help includes information on retirement plans (Keoghs and the like), descriptions of accounting methods (cash, accrual, or combination), and instructions for calculating the value of your closing inventory--all complicated items usually left to an accountant. The program provides lots of advice, as well as video assistance about business travel, meals and entertainment, home-office deductions, property depreciation, vehicle expenses, and many other topics.
Once you complete your return, it goes through a review process--a check for errors and overlooked deductions, and audit alerts. Among the audit alerts are discussions of business record keeping and some industry-specific issues: restaurants, for example, are advised about the possibility of unreported cash income. The "U.S. Averages by Industry" feature can help you gauge how your business compares with others in the same industry. Here you can check statistics, like adjusted gross income, percentage of income-tax liability per dollar, and percentage of the returns in your gross-income range.
TurboTax for Business won't replace an accountant: it doesn't offer the wide-ranging financial management and planning services that your business may need. But if you can go it alone and want to do your taxes accurately and efficiently--or if you do need an accountant but want to save on tax-preparation fees--TurboTax is definitely the way to go. As DeLong notes, "You never even have to look at a form."
Resources
TurboTax, TaxCut, and Personal Tax Edge are available in a variety of formats (on CD-ROM and disk, for Windows and Macs, for preparing federal and state returns). The operating-system and hardware requirements vary, so check the package or call the vendors below before you buy.
TurboTax and MacInTax, $39.95 TurboTax Deluxe and MacInTax Deluxe (CD-ROM), $49.95 TurboTax for Business and MacInTax for Business (CD-ROM), $69.95 State versions, $24.95 Intuit Inc., Menlo Park, CA (800-4-INTUIT)
Kiplinger TaxCut, $19.95 Kiplinger TaxCut Deluxe Multimedia (CD-ROM), $39.95 State versions, $24.95 Block Financial Corp., Kansas City, MO (800-457-9525)
Personal Tax Edge and Personal Tax Edge Deluxe (CD-ROM), $19 State versions, $19 Parsons Technology Inc., Hiawatha, IA (800-223-6925)
Ellen DePasquale is a small-business automation expert and writer in New York.
