Basic tax prep programs rely on good user input

Borders general manager Pat Borden arranges tax-help books offered for the season at the store on Monroe Street. Dozens of titles are available to aid taxpayers with changes in the tax code.

It was a major embarrassment for Timothy Geithner when he was nominated to become the U.S. Treasury secretary. He admitted he had failed to pay taxes properly between 2001 and 2003, and the Internal Revenue Service was to be under his jurisdiction.

The reason for the misstep? 'I will answer that, but I want to say I take full responsibility. It was TurboTax,' Mr. Geithner said during his Senate confirmation hearing.

Which raises the question: If America's Treasury secretary can't get his taxes right using one of the most popular tax software programs, what hope does the average taxpayer have?

'With any software program, it's the same: garbage in, garbage out,' said Gerald Kobil of Perrysburg, a tax specialist and former IRS attorney.

'Tax software programs are only as good as the people who use them,' he added.

That is not to imply that Mr. Geithner is not a financial expert. But Mr. Kobil said that before buying any basic tax software program, a taxpayer has to understand that they are geared for the masses and cannot anticipate every situation.

'They are only as good as the people who use them and if you have a simple return, you can usually get by. If you get into a more complicated situation, you're probably better off hiring an expert,' he said.

There are dozens of tax books available to help taxpayers better understand annual changes to the tax code.

Among the more popular are J.K. Lasser's Your Income Tax, Taxes for Dummies, and tax guides published by the two of the biggest U.S. accounting firms, Ernst & Young and PriceWaterhouseCoopers.

For those considering using a tax software, there are several options.

The IRS has begun a free online tax program called Free File. It is available to tax filers who have adjusted gross incomes of $54,000 or less and can be found at

www.irs.gov/individuals/index.html.

The two main competitors for software are Intuit's TurboTax, which, depending on the version, costs between $60 and $100, and H&R Block's TaxCut, which costs $20 to $80, depending on the version.

Both have a free online edition for those using 1040-EZ forms.

Each program has its strengths and weaknesses, according to leading software reviews sites.

In 2007, Consumer Reports compared the two programs and found both programs to be 'good products for simple returns involving the standard deduction or just a few itemized deductions like home-mortgage interest.' The magazine

said TurboTax was easier to use and more comprehensive, but found TaxCut to be nearly as convenient and cheaper.

Recently, CNET, the online reviewer of computer hardware and software, reviewed both products for this year's tax season and gave TurboTax a four-star rating and TaxCut three-and-a-half stars.

CNET's editors noted TurboTax was more expensive, but 'fast, complete, and straightforward' if the goal is to finish quickly. However, the online reviewer praised TaxCut for a key feature: a free session of live tax advice and free live audit support.

Toledo tax professional Robert Hodge, of Robert G. Hodge Tax Services, said programs like TurboTax are fine for simple returns, but if someone's situation is complicated, he or she may want to seek a pro.

'The IRS loves TurboTax because the math is always correct and they know people are not always getting everything they're entitled to. In some cases, people are just throwing money away,' he said.