H&R Block TaxCut Premium 2004 review: H&R Block TaxCut Premium 2004

Intro
H&R Block TaxCut Premium 2004 retains the overall appearance of its predecessor while beefing up its tax interview with advice on "life events," both good and bad: births, marriages, divorces, and so on. There's new guidance on the tax consequences of home mortgages, an overhauled Schedule C section for small-business and self-employed users, and videos scattered through the interview on relevant topics, including the ever-tricky home-office deduction. Premium 2004 is a good buy for longtime TaxCut devotees, who'll find the interface immediately familiar. On the downside, the TaxCut interview uses more arcane tax lingo than we'd like, particularly when compared with Intuit TurboTax Premier 2004, our Editors' Choice. Still, TaxCut is an affordable and powerful tax-prep tool with fast e-mail support, and we recommend it to those who used it last year. Setup of TaxCut Premium 2004 was quick in our tests, installing in about three minutes, but we have one major gripe: TaxCut dropped two garbage icons on the Desktop--sales pitches for Experian (the credit agency) and Ing Direct (an online bank). Like its competitor TurboTax, TaxCut downloaded program and tax-form updates once setup was complete. But modem users, facing lengthy download times, won't like the fact that TaxCut won't let you get started until the updates are done. TurboTax, by comparison, lets you begin the tax interview while it updates.

This year, the TaxCut's interface remains the same. After TaxCut 2003's much-needed interface overhaul, H&R Block wisely decided to maintain the program's appearance. Upgraders will find familiar tabs for hopping between federal and state returns, as well as the Topic Navigator for jumping quickly to a particular subsection--say, the moving expenses portion of the federal tax interview.

That said, many individual screens changed greatly. At the start of the interview, the new Life Events segment asks whether you've experience any personal changes--marriage, divorce, new baby, house purchase--that might affect your taxes. TaxCut then customizes the interview by asking questions relevant to your situation, much as TurboTax does, which is good. But TaxCut's customization could be handled better. For instance, the Income Summary screen lists all categories--including Farm, Pension Income, Unemployment, and Alimony--even if you didn't earn any money in those areas. By comparison, the same screen in TurboTax is easier to read, as it shows only the categories where you entered a dollar amount. A minor difference, perhaps, but this is the kind of nuance that makes TurboTax easier to use.

We tested TaxCut Premium 2004, which is designed for midlife and older adults with complex tax returns. Premium covers common topics such as rental property, home-office deductions, business expenses, and depreciations. By comparison, the Deluxe version offers age-appropriate assistance on education expenses, savings, refunds, and so on. The Standard edition is best for filers with simple returns. Most versions of TaxCut are priced comparably to TurboTax; however, TaxCut Premium costs $10 less than its direct competitor, TurboTax Premier.

The Schedule C section of TaxCut for small and home businesses is well designed and easy to navigate. And the new Home Mortgage Assistant is a welcome addition, particularly in light of the U.S. home buying and refinancing boom that continued into 2004. The Assistant demystifies tax mysteries, such as why your lender sent you a Form 1098 (and what it's used for). The Assistant also prompts you to enter the amount of interest paid and other key information.

Unfortunately, the Home Mortgage Assistant--and the entire TaxCut interview--tends to be wordier and more reliant upon IRS jargon than its TurboTax counterpart. For instance, TurboTax refers to Form 1098 as a "year-end statement" (with the words "Form 1098" immediately following in parentheses). We're not saying TaxCut is hard to use. But we believe TurboTax's approach is friendlier and easier to follow, particularly for those of us--meaning just about everyone except for tax accountants--who deal with taxes only once a year.

Overall, H&R Block's technical support is better than Intuit's. While both vendors provide free e-mail help, H&R Block responds much faster. Example: Our TaxCut queries were answered quickly, once within two hours; whole days passed before our TurboTax questions garnered a response.

Another TaxCut advantage: free online chat and phone support. By comparison, TurboTax users don't get a chat option and must pay $9.95 per phone support incident. TaxCut's Priority phone support (with shorter wait times) also costs $9.95 per call. However, we experienced a few glitches with TaxCut's online chat. During two separate chat sessions, the response times from our technician were so slow (up to a 60-second wait) that we eventually gave up and tried the more reliable e-mail instead.