Tech Reviews -- Turbotax Proves Better Than Kiplinger's Taxcut

Last year, I used tax software to prepare our return and was amazed at how painless and quick the whole process was. My records were fairly complete, so it was a simple matter of entering the figures. No more doing calculations or looking up tax tables.

So this year I was ready to get a little more adventurous. I wanted to see how the popular tax programs compared with each other, and I wanted to learn how I could file my return electronically. Here's what I found.

In most stores that carry computer software, you'll find the two leading tax programs: Intuit's TurboTax (MacInTax for the Macintosh) and Kiplinger's TaxCut.

I took all the versions home and ran our 1996 return through them.

Both programs came up with the same bad news: We owed money. And although there were tiny differences in the figures for adjusted gross income and taxable income, the amount of tax due in both programs was the same, to the dollar.

At first glance, you'll find far more similarities between the two programs than differences. Both are fairly easy to install. They have the same basic layout: Sections are represented by tabbed folders; clicking on the tab switches you to that section of the program.

The two programs also showed the same crucial weakness: The return is only as accurate as the numbers you enter.

On closer inspection, however, TurboTax is clearly the superior program. Its cleaner, simpler interface has more attractive graphics than TaxCut's, which is hobbled by too many buttons and controls. And TaxCut has the annoying habit of combining many tax points on one screen instead of breaking the topics into separate screens, as TurboTax does.

Tasks such as figuring out where you are in the interview process are easier and more intuitive in TurboTax, which also comes with better written and online documentation.

TaxCut certainly does a creditable job: Its instructions are clear and take you step-by-step through the interview process. But the program devotes less time to spelling things out than TurboTax does, requiring you to know more about taxes from the start.

And in numerous small ways, TurboTax is just a more helpful program. For instance, from the very beginning of the interview, it lets you know whether your data entries are punctuated properly for electronic filing, whereas TaxCut makes you go back at the end and fix problematical entries.

TurboTax tells you the dollar amount of medical expenses you would need to qualify for a deduction; TaxCut makes you figure out the amount yourself. And TurboTax will tell you that you probably don't have to pay the alternative minimum tax; TaxCut asks you whether you have to pay it.

In one of its most useful features, TurboTax shows you at all times the bottom line: how much tax you owe or how much refund you're due. You can see the figure in the corner, and how each entry you make affects the total. In TaxCut, you get a tally only at the end of each section.

However, TaxCut does offer some advantages. For people who already have a fairly good understanding of the tax code, the program makes it easier to skip topics and streamline the interview process than TurboTax does. And electronic filers using TaxCut have the option of mailing in their returns on a floppy disk and paying by check; TurboTax electronic filers must use their modems and pay by credit card.

TaxCut also costs appreciably less - about $10 to $15 less - than TurboTax, which retails for about $30.

With rebates available through some retailers, TurboTax can be had for as little as $12, and TaxCut for as little as $5.