Tax Preparation Software - Turbo Tax, HR Block at Home and TaxAct : When considering tax preparation software you have a decision to make, online tax software or purchasing a copy of the tax software. Online tax software comes in two flavors, free and paid. The free version does have its limitations and requirements; most often does not include the state return if one is needed.

It's Tax Season again ... Below you will find helpful information to asist you in the preparation of getting your taxes done.

Last updated 1/24/2011

To begin with let us review the IRS requirements for filing a tax return for free.

You need a copy of last year's tax return and your W-2s, 1099s, etc.
Get your e-file PIN - If you did not use a PIN last year, you will need to get your e-file PIN.
Determine your AGI – Your AGI (adjusted Gross Income) must be $58,000 or less.
Choose a software provider - Free e-file companies
E-file your return

The IRS has stated that it believes 70% of all tax payers should be able to utilize the free e-file as their AGI is $58,000 or less.

However each online tax service that has been approved by the IRS has its own set of rules (requirements) and limitations as to income, age and which state you live in. Check the company's website for details because the companies' offers may differ. For example, some companies charge a fee for state tax returns and some may not support a particular form you need to file.

Select item 4 above for a list of providers.

Tax Preparation Software - Turbo Tax, HR Block at Home and TaxAct

Over the years I used both Turbo Tax and HR Block at Home (former called Tax Cut). Never tried TaxAct, though each year the reviews have been positive.

Tax Software Reviews (Turbo Tax, HR Block at Home and TaxAct)

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Turbo Tax – This software year after year has been the favorite among tax payers because of its ease of use and its step by step interview wizard that walks you through the tax preparation process.

The CD/Download version allows unlimited federal tax returns and 5 free e-files per copy.

TurboTax can automatically auto-fill your W2 and 1099 documents along with Import of information from your financial software (including Quicken, QuickBooks and Microsoft Money) so you can skip the cut and paste.

New for tax year 2010 is the import of a PDF of Last Year's Tax Return. Easily imports prior year tax data/documents from TurboTax, other tax software.

As to which version Basic, Deluxe, Premier or Personal & Business will depend on how much hand holding and guidance you need. Deluxe focus is on added advice and help with itemized deductions. Premier adds the element of investments and rental properties. Personal and Business is for those that are self-employed and use a schedule C.

Keep in mind that if you are experienced with doing tax returns and up to speed on tax code and tax changes, you can do just about any form or schedule using the Basic version thereby saving the extra expense of the other versions.

HR Block at Home – According to HR Block website if you file a 1040EZ you can have your tax return done at one of their many tax offices around the country prepared by one of their tax professionals at no cost to you for the federal return. State returns are extra per state. E-file is included at no extra charge.

Highlighted features: Up to five federal e-files included. Free step-by-step Q&A to guide you through your forms. Automatic double-checking of your return for errors. Quickly and easily import your W-2, 1099, and last year's return. Worry-free Audit Support for federal and state returns when you e-file.

Personally found this software easy to use though the walk through wasn’t as helpful as Turbo Tax in previous years. If you have experience with one or the other you will find it fairly easy to move back and forth between products from year to year.

HR Block tax software also comes in several versions depending on your specific form needs and need for additional assistance in certain tax areas. They offer three versions: Basic, Deluxe and Premium. The Deluxe version is geared to homeowners and investors while the premium version adds help for the self-employed and those with rental properties.

Just as previously mentioned Basic can handle all your tax preparation needs if you are experienced as all forms and schedules are available in the Basic version.

Tax Act – The very first thing you will notice about this tax software is how much cheaper it is to its rivals. Like it’s counterparts it offers online, CD and downloadable versions. Like the previous two products discussed Tax Act limits you to a total of 5 e-filings but unlimited paper filings.

New this year to TaxAct is a feature called TaxAct Bookmarks which navigates your return on your terms. With Bookmarks, simply mark & return to any question at any time.

Two additional features that you might find handy are a Tax Calculator and TaxWatch. Tax calculator will give you the ability to see how different scenarios will affect your taxes from now up to 3 years into the future, without adjusting your actual numbers and TaxWatch feature will put you on a path to lower your taxes throughout the year. TaxWatch analyzes your unique tax situation and creates a plan to lower next year's tax bill.

There are three versions: Deluxe, Ultimate Bundle and Home & Business. The Ultimate Bundle adds a state return and Home & Business adds in addition to your personal, a choice of a partnership, sub s or corporate return.

TaxAct has been around quite a long time and is one of the leading tax software products out there today with significant lower cost for the software. However with that being said, it also has a significant less market share of the tax software market.