Tax Sites: TurboTax is Still the One to Beat

PC World — As more people turn to the Web for help in preparing and filing their income tax returns, some familiar sites continue to beef up their offerings in hopes of attracting newcomers and enticing competitors' customers. Most of the five online tax-prep services we looked at--versions of CompleteTax, H&R Block at Home, TaxAct, Tax Brain, and TurboTax that include guidance for individuals as well as for investors and sole proprietors--now support importing at least some (but regrettably not all) data from a PDF (the most common format for saving a return created online) of your 2010 return. This makes switching services easier than ever.

Also new: A couple of sites offer dedicated iPad and/or iPhone apps (see "Tax Prep? There's an App for That, Too")--or at least have eliminated technologies such as Adobe Flash that, in the past, precluded using the site on an iOS browser.

The overall competitive landscape for tax preparation sites hasn't vastly changed since last year, though. Intuit's market-leading TurboTax continues to charge a hefty premium for its excellent interface, extensive data importation support, and considerable guidance--which for the first time includes unlimited one-to-one access to a tax professional via phone or chat. This move appears to be a response to H&R Block's ongoing leveraging of its brick-and-mortar tax-prep operation to enhance its online product, which is solid and moderately priced, but doesn't quite match TurboTax's ease of use, especially in its Schedule C business area.

TaxAct, which is by far the least expensive option ($18 to prepare and e-file returns for both federal taxes and one state's taxes), remains a great choice for people who have relatively simple tax situations and don't need much guidance. CompleteTax costs somewhat more than TaxAct and offers a little more help, while TaxBrain continues to charge dearly for its minimalist, worksheet-based approach. For a comparison chart of the tax services we evaluated, with relevant prices listed, click the image at left.

Perhaps the best thing about tax sites is that you can try them before you buy: All five that we looked at will let you start a return and do everything short of printing or e-filing it, without charging you a dime. Remember, too, that people with an adjusted gross income (income after deductions) of $57,000 or less are eligible for free tax prep software and e-filing through the government's Free File website--and anyone who simply wants to fill out IRS tax forms online without third-party guidance can do so for free, also through the FreeFile program.

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