As a store manager for a tax preparation franchise, I have quite a bit of experience with income tax preparation software, both for professional and personal use. If you cannot or will not pay preparation fees, and I like you, I sometimes make a referral. By clicking through irs.gov, a myriad of free filing options abound for individuals with somewhat ($58K for tax year 2008) limited income. Federal preparation is free, printing is free, a pdf copy is free and often, e-filing is free with TaxAct.

While all of the heavily advertised brands of tax preparation software are relatively user friendly, navigation in TaxACT is the most intuitive and direct. It does not require tax preparation expertise. The novice user can answer straightforward questions which result in a completed Federal return. If you are familiar with tax preparation, it’s easy to add or delete tax forms and income/expense items omitted first time through.

Security abounds (can you imagine the lawsuits?) and saves are near-constant. The user can save with the click of a button or permit it to do so automatically. I have never lost data when my computer crashed or my internet connection failed. You can start your return in December using last your paycheck stub information (and prior year details) then finish it several sessions later as your W-2s and 1099s are received. (The IRS usually does not accept Federal returns until the end of the second week in January.)

When the data entry and reviews are completed in TaxACT and it is time to file, you are offered the opportunity to purchase a State component. This is well worth the money ($14.95) if only to avoid the hassles of typos and re-keying all of information a second time.

Most States provide free filing software on their respective web pages. Many require totals calculated from the Federal return. In my experience, State-provided software is very difficult to navigate and can be confusing even to those familiar with the corresponding paper forms. TaxACT will let free Federal filers pay a nominal fee to add their State return.

Speaking of fees, I personally find it worth paying for both Federal and State because payment gives me last year’s return—again avoiding typos. Having only used web-based software, I have no experience with buying a box or downloading TaxACT. The only reason to do so would be if one anticipated an inability to maintain internet connection.

I always recommend TaxACT. And, I use it personally—1040 and Schedules A, B, C, D, E, SE.

Rating: 8