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I have always preferred Kiplinger's TaxCut to TurboTax because of the numerous ways to enter data, myriad help commands, low cost, small file size, and its perfect electronic filing record.

There are three main ways to enter data in TaxCut, and you do not have to enter any of it directly onto an IRS form. You never even have to enter the same information twice, since TaxCut does the calculation and carries the number to all the proper forms. You can answer TaxCut's clear and direct questions on to forms that are automatically filled for you, but wait, we are jumping ahead of ourselves.

Review last year's report

Perhaps the easiest and fastest way to enter data is by using TaxCut's Review of Last Year's Report. Each line on thisscreen contains data, so it is not like an IRS form with a lot of superfluous text and wasted space. The screen is split vertically with all your 1996 entries on the left, so you merely enter your 1997 data in the center column using the 1996 entries as a guide for consistency. Each field has its own Go To Form button in the right column that takes you directly to the appropriate line and form should you want to review it. You can then single-click back to the Review of Last Year's Report.

Q&A

If you want to be interviewed with the kind of probing questions an accountant would ask, refer to Question and Answer. The Q&A format splits the screen horizontally, so as you answer the questions in the top half you can see your entries carried to the form in the bottom half. TaxCut tracks and constantly displays your pertinent topics so you know which ones still remain. This checklist allows you to jump to any topic and then continue with Q&A.

Shoebox

If your knowledge of taxes is limited and the document in front of you incomprehensible, use TaxCut's Shoebox feature. Shoebox is analogous to you grabbing from a pile of similar-looking tax documents and not knowing which IRS form to use to enter the data that's on it. TaxCut's Shoebox will determine where to enter the data on the return by asking you simple-to-understand questions.

Multiple help

The Help and Find buttons you see in the illustration are always visible throughout TaxCut. Help presents Help Central, with its four context-sensitive tabs, each with its own scroll list of dozens of context-sensitive topics. Here is where you will find Kiplinger's tax tips, the IRS's official Instructions and Publications, as well as a detailed explanation of TaxCut's calculations.

Find pops up Rapid Find, which combines all searches in one place under 2,000 topics. Here you will find all of TaxCut's program helps, explanations, video tips, audio tips, IRS instructions, Kiplinger tips, and other information. For example, there are there are 16 sources of help under the main topic, "Withholding." Of course, you can also jump directly to the appropriate form from Rapid Find and then single-click back.

Hand-held navigation

Navigating through the tax return is easily accomplished with typical Windows menus, shortcut keys, or eight tabs. All of these methods are available at any time so you always know where you are and where you came from. Each field displays where your entries come from and go to. Single-click there, and then single-click back

All federal and state forms can be printed with any printer, and the tax fonts are downloaded automatically for perfect IRS duplication. There is no such thing as "IRS acceptable" forms like the ones TurboTax uses. Every form is an exact IRS duplicate.

Difficult Topics made Easy

The Earned Income Credit is a very difficult credit to calculate and one that affects many of us. TaxCut automatically computes this credit for you; you never even have to be asked EIC-specific questions. Even more difficult to compute is the Alternative Minimum Tax, which TaxCut has historically computed automatically and accurately. TaxCut also provides a Depreciation Summary, which contains a recap of all depreciation schedules in the return, sorted and subtotaled by schedule. The individual Depreciation Schedules also display depreciation for all future years.

Minor Caveats

There could be more prompts and guidance from the program. For instance: the medical Q&A asks you only two questions and expects you to know that mileage to the doctor's office is deductible. TaxCut should also not allow you to leave a Q&A topic without a teaser. Lastly, state taxes paid during 1997 could be itemized deductions on the federal return or 1997 estimates on the state. TaxCut could have made those entries easier.

Best Auditor

TaxCut's only worthy competitor is TurboTax, but TaxCut's audit and review features have always been more accurate and complete than TurboTax's. In fact, there are three levels to the auditor. It lists problems that must be corrected, warns of potential problem areas, and displays user-specific tips based on your entries.

Miscellaneous Features

TaxCut will import from Quicken for DOS and Windows, Microsoft Money, Managing Your Money for DOS and Windows, and any .TXF file. It comes with a nice review of tax law changes, a memo pad for odd notes, a pop-up calculator, a summary of your previous four tax returns, and the What-if Worksheet, which compares your 1997 entries to three scenarios. You just enter your data, choose a year from 1995 to 1999, and TaxCut will do the calculation. There are very few limits on the number of forms you can complete. In each field you are only a single-click away from a mini worksheet.

New this year is an online connection to TaxCut's home page for technical support, FAQs, updates, additional tips and planning, and links to other Internet sites. By the time you read this, TaxCut will have also have incorporated BackWeb's push technology.

File electronically for free!

I highly recommend you file electronically and select the direct deposit option. You will be faxed an IRS acceptance letter two days after filing. Ten days later you can phone a special IRS electronic filing 800 number and within 60 seconds be told to expect to find your money by Friday. I guarantee your refund will be deposited by the time you awake on Friday morning.

If the IRS owes you, you will not have to worry about the post office losing your return or your refund check. If you owe the IRS, then print the 1040PC form for the IRS and print the normal form 1040 for your own records. Either way, electronic filing substantially lessens your chance being audited and totally eliminates your chance of getting an error notice from the IRS months later.

How much will electronic filing cost you? Nothing if you do it yourself, but most accountants will charge you about $40, even though their cost is only a modest $5 fee, which they must pay the transmitter. The IRS does not charge preparers for filing electronically

It pays to take advantage of TaxCut. The Federal Deluxe Multimedia version costs $29.95, and all the state returns are on one CD for the price of a single state version—$24.95.