Depending on your circumstances and on what checkbook program you use, you will have to decide which of these programs is best for you. And this year, that may not be an easy decision. In fact, it may be downright difficult. You will have to decide which new program feature you will find useful. You will want to judge the costs carefully. Your decision will also be compounded by the fact that each software program has several versions. TurboTax comes in Basic, Deluxe, Deluxe Investor Edition, Deluxe Retirement Planning Edition, Premier, and Premier Home & Business. These range from $29.95 to $79.95.   Tax Cut comes in Standard, Deluxe, Platinum, and Home & Business. These range from $14.95 to $49.95. Both programs have State Editions. Confused yet??  The TurboTax Web site has a comparison chart that gives a feature by feature comparison of these products including prices. The TaxCut Web site gives you information on what’s included in each of their versions.

I looked at TurboTax’s $49.95 Deluxe Retirement Planning Edition and TaxCut’s $39.95 Platinum Edition. Both Turbo Tax and TaxCut are comprehensive and easy-to-use. Both have an interview type of process that walks you through the tax preparation program. Both have Mac versions. Both included State tax return preparation software. (Although this is an additional charge with some versions from both companies). Both produce adequate results. Both products import financial data from checkbook and bookkeeping programs like Quicken and QuickBooks. TurboTax, however, does not import information from Microsoft Money while TaxCut does. So if you use Money, you may want to use TaxCut.

TaxCut looks and feels much like last year. It is easy to install and is a solid contender. It is cheaper than TurboTax. With TaxCut’s Platinum version there is no extra charge for e-filing.   New features include a Home Office Assistant, Retirement Savings Enhancer, Stock Options Advisor, Capital Gains and Losses Assistant and Business Expense Assistant.

TurboTax had a change of strategy this year. They decided to offer more customized individualized scenarios. One of the results of this approach was the development of the Retirement Planning Edition which has some great features for those planning for retirement or for those already retired. Quicken has added more tax planning tools and increased help for things such as rental properties. They listened to feedback from customers and produced a useful, robust retirement tool. Intuit’s TurboTax Premier version includes these retirement features along with several new investment tools.

If Intuit had stopped there, they might have had a winner. However they also added another feature. They added a Product Activation scheme that completely alienated their customers. Much like Microsoft’s Windows XP, the TurboTax product has to be activated.  While I had no problem with activating the process, others have had difficulty. In the past month, my e-mail box has seen a steady stream of TurboTax users who have complained that the activation has caused problems. This has been compounded by the fact that the TurboTax technical support number wasn’t manned late at night or on weekends. (Although I hope that it will be as we get closer to tax time.) The activation scheme also allows you to print returns or electronically file from only one computer. This has also caused frustration for some users. It could also cause more frustration as tax payers look to reinstall the program in the future to view previous tax information.

Bottom line – If your tax return is a simple one, before you purchase any tax preparation software check out the IRS Web site. Their new “Free File” program may allow you to use online software and perform an electronic filing for free. If your return is more complex, your accountant recommends a certain program, or you like the extra help for investments or retirement planning that the tax preparation software offers, be sure to check your options carefully this year.