Hands-On Review--TaxCut 2006 Experience, A Very Good One Indeed!

The Macs Only! staff has used both H&R Block's TaxCut for Mac and Intuit's TurboTax for Mac for a number of years. Before TaxCut came to the Mac scene, the entire staff used Intuit's MacInTax, the precursor to TurboTax for Mac.

The staff member who originally tried TaxCut for Mac liked it better than Intuit's offering because the interview was much easier to follow, especially for the state forms, and the cost was less. TaxCut also generally got better reviews, although for the Windows version. Last year, i.e. the 2005 tax year, the staff members who had been using TaxCut had to go back to TurboTax when H&R Block dropped TaxCut for Mac. They were not at all pleased with the TurboTax experience and, worse, it came at a higher cost.

Fortunately, H&R Block issued TaxCut for Mac 2006 as a Universal Application and the staff members who looked at the Basic Edition (federal tax only) that was sent around free to previous customers liked it very much as we previously reported. We also noted that H&R Block was at Macworld 2007 handing out free copies of the Basic Edition to attendees.

We obtained a copy of the Premium+State+Efile edition of TaxCut 2006 for Mac via a download special of $49.95 that was available in January. The regular retail price is $64.95 and it includes the Premium federal version of TaxCut, one state return and e-filing for both the federal and state return. The similar level product from Intuit, TurboTax Premier, retails for $74.95 but it's not clear that there are no additional charges for efiling a federal and a state return.

We updated TaxCut 2006 three times--in February, March and just before we did our 2006 returns. The last update was for only the California state module. We had hoped to provide this report earlier but when it comes to doing taxes, we are just as much a victim of procrastination as the next person and completed them only this past Friday.

The tax return that we used TaxCut on was a good test. The staff member and his spouse have income from a lot of sources: a job, a business (Sch C), rental real estate (Sch E), a limited partnership (Sch E & K1), a retirement IRA account and social security.

We had an easy start as TaxCut 2006 imported the 2005 tax returns completed last year with Intuit's TurboTax. The only glitch was that many of the worksheets were imported in triplicate but none were missed, making the 2006 job easy by just editing the 2005 data via the interview process. The extras were easily deleted.

We found that the interview was clear and not confusing for both the federal and state returns. In the past, and especially with TurboTax, we had found the state return interview confusing at a number of points where a decision was required but no basis for making the decision was provided or, if it was, it was too arcane to be helpful. This year TaxCut seems to have gotten it right and we sped through the interview for both the federal and state returns in just a couple of hours. The California state return was very easy since the data from the federal return was automatically imported into the California state return and only a few minimal adjustments were needed from the interview. Not one glitch or crash occurred, also something new.

While the new one-time federal excise tax credit for long distance telephone calls from March 2003 to July 2006 was not noted in the introductory video as something new, it was not forgotten during the interview. If you have made many long distance calls during the time period, it is worth looking up the actual tax paid rather than taking the $30-60 default credit. Our $40 default credit turned into a $201 credit by simply looking up our old bills on AT&T's Web site. AT&T provided a useful link to the appropriate data.

The interview also provided useful tax-saving tips like checking to see if in 2006 one paid more than was withheld on a state tax return for 2005. If so, that should be added to the amount withheld in 2006 as a deduction on the federal return. It also automatically parsed social security payments into taxable and non-taxable portions.

The federal and California state returns were efiled together at nearly 11pm and by 4am and 5am respectively, both were accepted. This was a much faster turnaround than in previous years.

TaxCut is good for both complex and simple returns and for experienced and novice taxpayers. The Premium+State+Efile edition has the helpful Deduction Pro tool and one free session with an H&R Block tax advisor. And if you efile and are unfortunate enough to be selected for an audit, H&R Block has what they call Worry-free Audit Support that will assist you during the audit. Like all taxpayers, we hope we never need to test that aspect of TaxCut. [Bill Fox]