Online Tax Filing – TaxAct, TaxCut, Turbo Tax – User Experience Review

For the 2007 tax year, we decided to checkout the alternatives after realizing that the price of the Turbo Tax Online product has increased significantly over the years. We selected these three products to try out because they received the highest three ratings at the time. After finishing that exercise, it became clear that the products are very good but each had a set of quirks that needed getting used to. Below is a list of quirks we noticed with each product:

Turbo Tax Deluxe - $50.17 (after Fidelity click-through discount):
  • Transferring info from previous year Turbo Tax was a breeze.
  • Transferring W-2 info from ADP succeeded on the 2nd try - the example shows to put a ‘/’ between the number portion and the 3-letter alphabet portion of Box D, but supplying the info as is (with a space in between) succeeded.
  • Trying to transfer another W-2 from Ceridian resulted in a page that asked for user name and password. But, it was not apparent how to get that info. Had to do that one manually.
  • After confirming W2 info, it showed a screen about select ‘OTHERCOMP’ in box 14, but going back one screen and coming back resulted in another screen asking whether any of the items in the a list applies to the W2 – confusing…
  • Many times, clicking continue button results in no action. Usually, another click got us to the next page. Similarly, when coming back from another tab in the browser, the cursor shows it is active within an single-line edit box, but typing results in nothing getting entered.
  • Minor spelling in “wages and income” confirmation screen – “If you have no other information for import, selete Done”
  • After entering W-2 income, Turbo Tax provided two choices – Select Specific Topics, or Guide Me Through Income. We chose the first choice.
  • Transferring 1099-B from our TD Ameritrade succeeded. This is a very helpful feature. But, the information on equity option trades, margin interest, etc. did not get transferred over. These are classified "supplemental" information, but the info is needed to complete the tax return. This is an area were one could easily miss filing this information.
  • The preview feature is very functional - this is a significant improvement compared to last year.
  • HSA employer contribution was treated as taxable income and it did not prompt for input on 1099-SA. This resulted in a higher tax figure. We did not get to verify the functionality this year as our health plan this year was not HSA related.
  • Charitable contributions allowed using a tool called ItsDeductible. This made determining the value of the articles contributed relatively painless and hopefully accurate. One minor nnuisance was having to enter address information twice if donations were made to the same charity more than once.
  • Timeout at 20 minutes is better compared to TaxAct's 10 minutes. Providing this as a configurable option would have been better.
  • hile trying to eFile, our CA SDI withholding figure was transferred over from W2 correctly as $693.60. But, since the max is $693.58, Turbo Tax said it was unable to eFile. Manually editing that entry to say $693.58 instead of the rounded value fixed the problem.

TaxAct Ultimate Online Bundle - $17.95:
  • Signup was a breeze. But, it asks for the SSN the first time around. This was not required for other products.
  • After sign-in, an info screen was sent by email – the recommendation was to print it out, scribble in the password & favorite pets name for future reference.
  • Imported everything we entered last year for this evaluation even though we did not use them to file the return last year.
  • Timeout is 10 minutes – a 2-minute warning appears after 8 minutes. This compares to the 20 minute timeout interval with Turbo Tax. Again, an easily configurable option would have been better.
  • Estimated Tax Payments entering has improved and is now fully functional as compared to last year.
  • Life Events – this is a complete list and is a really intuitive classification.
  • W-2 entries had to be made manually.
  • The preview features are simple and functional.
  • HSA employer contribution was treated correctly and there was a step at which we could enter 1099-SA information. This resulted in the correct tax figure. We spent significant time in Turbo Tax to figure out this.
  • Dependent Care Provider information entry screens are accessible - this is an improvement compared to last year. The form requires entry of the telephone number of the provider for California & Oregon tax filers. This was not required in the other products.
H&R Block At Home Deluxe (previously TaxCut) - $29.95:
  • Signup was a breeze.
  • Option to import tax file from previous year. Couldn’t use it as we could not find the .tax file it needs. Turbo Tax’s online product only allows getting the pdf file.
  • Transferring W-2 information electronically was not offered.
  • The ‘Delete’ button in the W-2 form box 12 overlapped the single-line edit field and this made the page look pretty unprofessional. Also Box 18 seemed to need some info although that field was blank in our W-2. Inputting $0 made it happy.
  • 1099-R form entry was clumsy with certain fields requiring $0 even when they are not applicable.
  • In many of the forms certain fields (example charity name, provider name, etc.) are getting cut off after a certain number of characters are typed.
  • The automatic sign-off feature is not as good as the other two products. Specifically, after 5 minutes of inactivity, it comes up with a prompt about inactivity and forces the user to click a button to sign-off as opposed to automatically doing it.
  • There was no obvious way for 1040 preview.

Summary:

Turbo Tax online product won out. The pages loaded quickly, navigation was smooth, access to different parts was intuitive, and the separation of tools from the rest of the interface was a good touch. Further, electronic transfer feature from other financial institutions was a very good feature. Some of the features such as ItsDeductible were either missing or less functional in TaxAct and TaxCut. TaxAct got the job done with a simpler interface. The compromise was that there were more manual entries when compared with Turbo Tax. H&R Block’s TaxCut on the other hand attempted to do more of a hand holding job but in the process ended up making the interface somewhat clumsy when compared to Turbo Tax and TaxCut. Further the need to enter $0 in many of the single-line edit fields made the interface less intuitive. It was a time-consuming process to enter 1099-B stock sales and dividend information in TaxAct and TaxCut while Turbo Tax allowed automatically getting the information from our broker. Also, the Turbo Tax premium product promised to make this and even better experience, but for extra money.

We filed our taxes with Turbo Tax for the 2007 tax year as well although the price difference with TaxAct made us consider switching. By not choosing the Premium product, the price difference with TaxAct came down to $31.70. It was a tough choice, given our tax information from 2000 onwards was saved under our Turbo Tax account and moving away from Turbo Tax would have meant spreading our historical information among two products.

There are a few other options that can help keep tax filing costs down:
  1. Turbo Tax SnapTax for iPhone and Android can keep your cost to just $19.99 (increased from $14.99 last year). The caveat is that it is for 1040-EZ only. The pricing is about half when compared to the online product. 
  2. Opt for Turbo Tax Desktop Edition. Going this route saves you around 35% compared to the discounted pricing for the Online Edition. You can choose between a DVD and Download. Download is slightly cheaper and you get it almost instantly (~5 minutes if you have broadband internet connection).
  3. Get Turbo Tax Deluxe online edition for free by establishing a banking relationship with State Farm. 
  4. Intuit increases the pricing of the software every year on March 22nd. So, you can save a bunch by filing before that date. 

2012 Tax Filing - TurboTax Usage Experience: The good news for us was that Turbo Tax then allowed eFiling for US tax-filers residing abroad. This was not the case in 2011 and so we had to use our virtual address in Texas. The overall experience had again improved that year. There was a glitch with importing our 1099 info from TD Ameritrade which was resolved in our second try. Also, Turbo Tax failed to take a 1099-INT that was for a very small amount (<$10) and so we had to manually put it in from an imported form. One other thing that we noticed was that Turbo Tax reported they do not support importing ESPP sales from Quicken, or other online financial services. The interface performed faster than in 2011 as well. The eFiling itself went very smooth - as with 2011 tax filing, Turbo Tax allowed debiting directly from your bank account for payment of taxes although it did not allow that to pay for the product itself. So, we used a credit card for that.

As of 2013 tax year, we finally made the switch from Turbo Tax to TaxAct.

Note: consider also what is available at the Amazon.com Tax Preparation Software area. The options there are suitable in case you prefer client software as opposed to online interface.




    7 comments :

    KY said...

    I just finished using TurboTax Premier through Fidelity link. Fed-$37.45 and State-22.45.

    It downloaded all my info from my Fidelity brokerage and retirement accounts perfectly. I had 1099-B, DIV, INT, and 1099-R info to download. Including two Rollovers, Conversion to Roth, Recharacterization, capital gains/dist etc. It streamlined the process immensely and accurately.

    However, filling out Schedule C stuff was a little confusing. And, Turbotax price increased by about 50% since March 29.

    Terrin said...

    I have used both Turbo Tax and Tax Act. This year I am currently filing with Tax Act. I want to point out that it is unfair to ding Tax Act for having to manually type in employer data. YOu'd have to do the same with Turbo Tax if you never used the service before. Turbo Tax and Tax Act work the same in that regard. Further, both Tax Act and Turbo Tax allow you to skip certain tax interviews.

    It is also fair to point out Tax Act is free for everyone Unless they file a State Return, where the most the cost would be is under twenty dollars. Further, Tax Act doesn't bombard you with advertising after you sign up.

    Turbo Tax has a slightly slicker interface, (they keep changing it every year), but Tax Act's is simple and easy to understand. Further, it has stayed the same the last two tax years I have used it.

    Except for the convenience of not having to type in employer data and a slightly prettier interface, I am not sure why anybody would start off preferring Turbo Tax over Tax Act.

    Anonymous said...

    Very helpful review.

    Unfortunately my experience with TurboTax online has been awful. Besides the problem you noted with how it doesn't prompt for enough HSA information, it mangled an IRA conversion/recharacterization and ended up with an IRA deduction to which I am not entitled. After two calls to support, each of which took nearly an hour in hold time, I finally was given the advice to just clear the entire return and re-enter ALL of the data. That's because the on-line version disabled the ability to see where a certain entry comes from -- you can see an incorrect value, but there is no way to track back to its origin. Even the support rep acknowledged that it makes troubleshooting really, really painful.

    Then to add insult to injury, it won't let me clear the data because I "already paid". (Not filed, just paid) their theory is that once you've had a chance to print out any of the forms (which was the way I found out that there was an error in the first place -- their "audit" never caught it) you're prohibited from clearing it.

    I've just been put on hold for the US call center (thank G*d for small mercies) since the Indian call center can't override that. (And, as far as I'm concerned, the Indian call center is a pointless effort anyway -- they have yet to be able to help with anything, and it takes them forever to walk through their scripts before they finally arrive at the decision that they don't know how to help. The woman last night had never heard of a Roth IRA and had no idea of even how to spell recharacterization.)

    I used the on-line version last year without too much trouble, but I'm seriously considering just dumping this and going to Tax Act. If Intuit doesn't want to give me a refund, I guess it is time for a credit card dispute and a complaint to the Better Business Bureau.

    Anonymous said...

    found your site today and really liked it.. i bookmarked it and will be back to check it out some more later ..

    Anonymous said...

    I'm not an educated person therfore reading & comprehending instructions can be difficult for me. TaxAct has made it easy for me to do my own taxes. It walks you through step by stey with the option to go back & reread or proof read your entry. It eliminated my stress I had before and gave me a new confidence when filing taxes.

    Anonymous said...

    I used Turbo Tax from '00-'05 and TaxCut from '06-'08. This year I decided to try TaxAct due to the big price difference. I was skeptical of a tax package so much cheaper than the big boys being able to provide the same quality. So... I did my taxes simultaneously in TaxAct and H&R Block Online (Premium). I was incredibly surprised to find a $3700 difference (yes, three THOUSAND seven hundred) between the two products. I owed $1100 on TaxAct, and owed $4800 on H&R Block. Could be human error. I'll try again. In any case, I found both online services to be equally user-friendly. TaxAct was able to import previous year's tax info from a PDF which was not offered by H&R Block.

    Bry from Turbo Tax Software Review said...

    Yes, Turbo Tax Software is advisable to use nowadays. You can file your returns with ease because it contains different guidelines and tools you can use when you need to file your returns. Free Version, Premier, Deluxe, Home and Business, Business they are all useful but on Free Version you don't need to pay anything unless you use this for submission of your documents. On other version in case you choose this as your savior be ready to pay the amount it cost.

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