Many Happy Returns: The State Of Tax Preparation On The Mac

Tax Day!Apart from accounting professionals who make their living interpreting government economic legalese, I suspect tax season in the United States is the least favorite time of year for anyone required to ?le, or – in the case of this year’s “rebate” – anyone who wants to cash in on some government overspend. Using your Mac to prepare your taxes has always seemed like a hit-or-miss endeavor to me, either from a lack-of-choices perspective when it came to actual software or just compatibility problems when using purely online e-filers.

Up until 2006, I still used tax software written for Windows when we weren’t letting an accountant handle everything for us. There were just too many horror stories about differences in outcomes between on Macs & PCs when using the same program from a single vendor. This year I did the same and wanted to give last-minute filers an overview of their options for getting returns in on time using a Mac.

On Your Mac

Both H&R Block’s TaxCut & Intuit’s TurboTax are available for use on either G3+ & Intel-based Macs running OS X 10.4. (Tiger) or better (TaxCut actually supports OS X 10.3.9+). They both offer different packages depending on the type of tax-situation you are in (whether you are filing just Federal or both Federal+State) and Intuit provides two extra titles that are more tailored to users with investments, run a small business or manage rental properties (TaxCut Home & Business only runs on Windows). Both packages will require updates upon first launch, so be prepared for an initial delay in preparation.

I prepared and filed my return with TurboTax Deluxe 2007 and did not purchase a copy of TaxCut just for this review, so I’m going to make a preemptive request to any TAB readers who have used TaxCut to definitely speak up in the comments with your experiences & opines.

TurboTax begins by asking if there is data you would like to import from either previous returns or other programs, such as Quicken. I had it import our 2006 return and began my editing. They programmers definitely tweaked the user interface more than just a bit this year with the whole program feeling much more solid (save one experience you’ll see in a bit). While I always choose to let the program interview me and provide guidance, at any point during the filing you can jump to the fields in on-screen versions of the printed forms if you feel that direct-entry would be faster/easier and then return to the prompting. TurboTax knew about this year’s economic stimulus package and provided thorough information on how to handle the deduction of moving expenses.

When you are finally done with entry, the error checking stage ensures that no mandatory fields go unfilled and points out inconsistencies between different parts of the return(s) that require attention & correction. It even gives you an idea of the likelihood of an audit based on what your return looks like as compared with Intuit’s database of returns that have been audited by the government and information gathered from IRS sources. Once the Federal return is finished, the majority of the data is then used to populate your State return (if you are required to fill out a state return and have purchased a version that includes State filing).

While my experience with the program was good it did crash on me three times when I tried to switch into manual-form-entry mode during the tail end of my Federal return. While that is a somewhat-scary experience – is the file corrupted? – I save & copy often and reverted back to a known, good version of the data file before continuing with data re-entry.

E-filing is simple and quick and I’ll be starting the program again daily to have it check on the status. TurboTax also provides the option to encrypt your data file with a password which I used even though I store it in a secure disk image. I have to admit not being thrilled with the security-question override to the password protection, but that may allay the fear of forgetfulness for some users.

For TurboTax, you’ll end up paying between $19.95 & $89.95 (many bargains are out there, tho) with e-filing being an additional charge of $17.95 per eFile for up to five Federal returns and $17.95 per eFile for up to three state returns (charges apply to downloaded product only).

TaxCut charges $24.95 for just their Federal program and $44.95 for their Federal+State package. E-filing is a separate charge for either version, but they have bundled Federal+State & e-filing into one final option for $74.95.

For either TaxCut or TurboTax, it is very important to remember to keep a copy of your old software and save a copy of your return as a PDF document! You cannot rely on newer versions either being available or reading older formats correctly and the government will not accept that as an excuse when attempting to retrieve information for an audit. Remember to store the PDF copies as either secure PDF documents (my version 4.1 of Preview.app allows for encryption) or store them in a secure disk image. Despite my attempt to go paperless, I will always print & securely file the paper copies of my tax returns.

In Your Browser

Both companies and a host of others also give you an option to file completely online; no client software to download. There is a helpful page at the Nebraska Department of Revenue site which lists may e-filers and their compatibility with various platforms, including which combinations of browsers and Macintosh operating systems they support.

I used Safari 3.1 to start a return on the TaxCut online site and the TurboTax online site. When I began the TurboTax version I was struck by how close the look and feel mimicked the OS X native version. For example, here is a screen capture of the full Mac program on one of the initial screens:

TurboTax Deluxe 2007 – Full Program Running On OS X

and here is the same stage in the online version:

TurboTax Premier 2007 – Online Edition in Safari 3.1

The online version also has the same smooth transition between interview stages and enables you to go back and forth between screens or save your return for later entry.

Here is a sample of a similar page from TaxCut’s online offering:

TaxCut 2007 – Online Edition in Safari 3.1

While the TaxCut site seemed to cover the same elements in nearly the exact same stages, the Intuit web programmers did a much cleaner job making their web version feel like you are working in a native program.

What Works Best For You

A few friends have mentioned that TaxCut integrates better with OS X but failed to elaborate on how they were using the .Mac, iCal and iDisk support. Definitely drop a note in the comments if you have direct experience with that feature.

TurboTax is almost a sure bet for you if you use other Intuit products/services. The fact that their program has improved so dramatically from 2006 to 2007 is also a good sign that Intuit is taking the Mac more seriously.

If your needs do not justify the purchase of one of these programs or you just like to kick-it old school and paper-file, Nathan Vander Wilt has a pretty cool Numbers spreadsheet that includes the main F1040 form. As he points out in his post, the form “is “complete” although there is a very simplified part of Schedule C that hooks in as well”. There are few forms for Excel floating around the Internets as well, but they all seem to require enabling Visual Basic macros which are – thankfully – missing from Excel 2007 for the Mac.

As I’ve said more than once in this post, your feedback on Mac tax preparation software or using the Mac when preparing taxes online or offline would be most appreciated by me and – I suspect – many TAB readers. More voices usually end up helping to make better choices. Better hurry, though, April 15th is just about two weeks away!

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