TurboTax vs. TaxCut: Having tried both I'd say TurboTax wins

Posted by TomYoung on December 29, 2008, 10:19 pm

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Hi all:

In response to TurboTax's stealth price increase I ordered TaxCut
online. Before TaxCut showed up TurboTax reversed itself on the
stealth price increase and I picked up TurboTax at Costco. Having
done my preliminary 2008 taxes in both programs I thought I'd point
out a couple of places where TurboTax was clearly superior.

Health Savings Account deduction for AGI:

I've been very critical of TurboTax in the past for their programming
surrounding the HSA deduction. First, the issue of an HSA didn't come
up in the course of the regular interview process. Instead, you had
to "invoke" the process in order to get TurboTax to fire up an HSA
interview process. Second, the interview was slapdash, requiring you
to have a significant "tax knowledge" of HSA's. This, combined with
TurboTax's poor wording of interview questions, meant that I always
got the wrong answer on the first pass through the interview.
(Luckily, I always knew what the "right' answer should be so I'd
recognize the answer was wrong and then resort to the forms method to
come up with the right answer.) This year I didn't have to "invoke"
the TurboTax HSA interview - it came up as part of the regular
interview process - and the questions TurboTax asked resulted in the
right answer the 1st time!

In contrast, TaxCut's interview process reminded me of TurboTax's from
prior years - though it did come up as part of the regular interview
process - in that it required too much HSA "tax knowledge" to get the
right answer the 1st time through. I had to dive into the forms to
get things squared away.

Advantage: TurboTax

Tax Benefit Rule:

TurboTax got the Tax Benefit Rule right while TaxCut didn't. I didn't
itemize in 2007, but will itemize in 2008. In January 2008 I made my
4th state estimated tax payment (a deduction for 2008) but also got a
state tax refund after filing in April, 2008. TurboTax correctly
allocated a portion of the refund to the January, 2007 state tax
payment - a reduction of my itemized deduction on Schedule A - while
TaxCut didn't, telling me the entire refund was non-taxable. While I
certainly liked TaxCut's answer better from the standpoint of 2008
Federal Taxes it's the wrong answer. TaxCut's on-line "chat" folk
also couldn't grasp the problem, though one of them told me that
TaxCut has a "calculation guarantee" (!).

Advantage: TurboTax

This is the 1st time I tried TaxCut and had high hopes for it; too bad
it didn't work out.

Tom Young

Posted by Bob L on December 31, 2008, 11:58 am

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> Hi all:

> In response to TurboTax's stealth price increase I ordered TaxCut

> online. Before TaxCut showed up TurboTax reversed itself on the

> stealth price increase and I picked up TurboTax at Costco. Having

> done my preliminary 2008 taxes in both programs I thought I'd point

> out a couple of places where TurboTax was clearly superior.

> Health Savings Account deduction for AGI:

> I've been very critical of TurboTax in the past for their programming

> surrounding the HSA deduction. First, the issue of an HSA didn't come

> up in the course of the regular interview process. Instead, you had

> to "invoke" the process in order to get TurboTax to fire up an HSA

> interview process. Second, the interview was slapdash, requiring you

> to have a significant "tax knowledge" of HSA's. This, combined with

> TurboTax's poor wording of interview questions, meant that I always

> got the wrong answer on the first pass through the interview.

> (Luckily, I always knew what the "right' answer should be so I'd

> recognize the answer was wrong and then resort to the forms method to

> come up with the right answer.) This year I didn't have to "invoke"

> the TurboTax HSA interview - it came up as part of the regular

> interview process - and the questions TurboTax asked resulted in the

> right answer the 1st time!

> In contrast, TaxCut's interview process reminded me of TurboTax's from

> prior years - though it did come up as part of the regular interview

> process - in that it required too much HSA "tax knowledge" to get the

> right answer the 1st time through. I had to dive into the forms to

> get things squared away.

> Advantage: TurboTax

> Tax Benefit Rule:

> TurboTax got the Tax Benefit Rule right while TaxCut didn't. I didn't

> itemize in 2007, but will itemize in 2008. In January 2008 I made my

> 4th state estimated tax payment (a deduction for 2008) but also got a

> state tax refund after filing in April, 2008. TurboTax correctly

> allocated a portion of the refund to the January, 2007 state tax

> payment - a reduction of my itemized deduction on Schedule A - while

> TaxCut didn't, telling me the entire refund was non-taxable. While I

> certainly liked TaxCut's answer better from the standpoint of 2008

> Federal Taxes it's the wrong answer. TaxCut's on-line "chat" folk

> also couldn't grasp the problem, though one of them told me that

> TaxCut has a "calculation guarantee" (!).

> Advantage: TurboTax

> This is the 1st time I tried TaxCut and had high hopes for it; too bad

> it didn't work out.

I am trying TaxCut for the first time too because of TurboTax's multiple
return filing policy and am very unhappy with the interface. Going from TT
to TaxCut is like going from Windows Vista to Windows 3.1. With TaxCut you
can only have one window open at a time and have to constantly open and
close forms rather than just switching windows like you can do in TT. When
you enter a value in a form you MUST press return for the value to actually
change so it is very easy make mistakes. For my return, which is relatively
simple although I have K1 and Royalty income, I would think that both
programs can correctly handle my taxes.

But the TaxCut interface is really inferior. I may just decide to bite the
bullet and purchase TT before I file.