Two Tax Programs for the IBM PC

Nothing is certain but death and taxes, goes the old saw. And while there are programs that can help you write your will (and I suppose one could devise a far-fetched scenario involving medical databases) there really isn’t much that you and your PC can do about the former of these certainties. There is, however, a class of programs that can make filling out tax returns more pleasant and less time-consuming, if not outright fun. One of the leading IBM PC programs is TURBO TAX. The leading Macintosh program is Macintax, which has just been ported to run on IBM PCs under Microsoft Windows as TAXVIEW. Clearly we are heading toward the day when you’ll be able to file your tax return with IRS Already this year there are pilot projects allowing large professional preparers to supply returns in this manner. It’s safe to predict that within about five years, you’ll be able to submit returns by modem if you have a program like one of those reviewed here. —B.S. It is important to realize that these programs provide limited help on the two most important apsects of preparing a tax return: getting your records together and finding out the little deductions you might not know about but that can really add up. They will let you do some tax planning for next year and will ask you for the information all at once, but they don’t collect the data for you. While both programs provide online IRS instructions, they are certainly not in the business of offering tax advice. So what do they do? They automate and streamline the mechanical aspects of preparing a tax return. For example, if you or your spouse is below the Social Security maximum and you fill out a Schedule C (profit from business) for some self-employment income, TURBO TAX will automatically fill out Form SE in full and include it with your return without your asking it to do so. TAXVIEW doesn’t go quite so far: you’ll have to know enough to go to the proper form, which the program will then automatically fill out and include. In neither case do you need to transfer information from other forms and calculate the result yourself. Thus, one benefit of tax programs is the time saved. This is particularly important if you pay taxes to a state whose tax form is supported by the program. Before I - began using TURBO TAX several years ago, it took me about five hours to do my California tax return: it now takes less than an hour. Overall, I estimate that I save eight to ten hours in tax preparation—well worth the cost of the program. TURBO TAX has returns for 26 states whereas TAXVIEW only has state modules for California and New York this year. But there is a more significant way a program like this can save you money. Have you ever finished your return only to find you’ve forgotten a deduction—say, one that could save you about $20? Is it really worth filling out the six forms affected, especially if you have to make a trip to the post office to pick up a couple of them? With these programs, it takes just five minutes of work plus the waiting for the printout to make the changes. Both programs have a lot in common. You enter information on worksheets, and the data are then automatically transferred to the return. You pick options and forms from menus and the information on subsidiary forms is automatically transferred to the form to which it applies. Both have simple single keystrokes that allow you to go to a subform and then back again. For example, when working on the depreciation line in Schedule C, you hit a single key to go to the depreciation schedule Form 4562. The information you enter there automatically is transferred back to Schedule C. Both programs allow you to “itemize” any line—that is, you enter a list of items with names and values that total the amount entered. Both programs have online IRS instructions but neither is ideal. TURBO TAX always takes you to the top of the instructions for the form in question. TAXVIEW displays instructions only for the line you’re working on, making it difficult to see the full instructions for a form. TURBO TAX has instructions for only some of the forms and doesn’t include instructions you might need, such as those for 2210—Underpayment of Tax. Both programs provide error checking. A few keystrokes bring up the places in the retum where the program thinks information is missing. And either program will easily bring up a summary window listing your tax liability given the information that you have provided so far. Both programs allow you to print out complete returns that are acceptable to the IRS, but their strengths in this area, which I’ll discuss later, are different. Both programs also permit you to do multiple returns, although the program is much simpler in TAXVIEW since TURBO TAX has a data file with a fixed name and requires you to use a separate directory for each return. Also, if you have children with interest income of more than $1,000, their returns will be complicated enough this year that you'll be glad to have one of these programs to help out. Once Over TURBO TAX TURBO TAX has lots of little extras. One is a built-in four-function calculator that can cut numbers from the screen and paste them into a data entry place. There is also a handy notepad that is useful for keeping track of things you still need to do, but it is limited to 13 lines and has rather limited editing capabilities. TURBO TAX lives up to its name: it is speedy to load, to change forms and to perform calculations. Its weakest point has always been printing the retum. The IRS will accept facsimile forms for everything but Form 1040. These other forms can be printed out on most dot matrix printers, but I’ve always found them more difficult to read than a “real” form. You have three options for the 1040. You can print out an unacceptable copy and then transfer it by hand onto an IRS form 1040, you can print onto a real 1040 or onto the pin-feed 1040s that come with the program (although aligning these forms right is highly non- trivial!), or you can use a dot matrix printer to print an acceptable identical copy. This last method is best if you have the appropriate IBM or Epson printer or if you have a fully compatible printer that has both graphics compatibility and compressed text mode. When printed on a laser printer, the output of TAXVIEW is simply magnificent. It looks just like the IRS forms, but with richer looking print—the IRS commissioner must eat his heart out just seeing it. Of course, you may not care if the auditor is impressed with how your retum looks. But what if you need to submit a copy of your tax return along with a mortgage application and want to make a good impression? TAXVIEW also supports various dot matrix printers and allows you to print all the forms, not just the 1040, so that they look like the IRS equivalents. However, printing in graphics mode has its penalties—it took about an hour and half to print out my full tax return with 10 supporting forms/schedules, even though I used a 386 computer and an HP LaserJet series II printer. More than anything what affects the feel of TAXVIEW is that you run the program under Microsoft Windows. It comes with a runtime copy of Windows 2.0 or you can run it under the full program if you have a copy. This means that the program has formidable hardware requirements. You’ll need a graphics monitor and may not be very happy if you only have a color graphics adaptor (CGA): you’ll want an enhanced graphics adaptor (EGA) or a Hercules monographics card. The program comes on nine diskettes. After installation with the fonts for the LaserJet, it takes up more than 2 Megabytes of hard-disk space. While it is technically possible to run it on a dual-floppy system, you really need a hard disk. And while Windows 2.0 is faster than 1.0, it is still unwise to run it on a machine with anything less than a 286 chip. On my 386 machine, it took 55 seconds to load my completed return into TAXVIEW (compared with 4 seconds for the same operation in TURBO TAX). Occasionally I experienced lengthy delays when shuffling forms. Moreover, Windows disables all resident popup programs loaded before it and isn’t very fond of them in any event. The only way for me to avoid crashes was to boot the system from a DOS disk. Because of this, you won’t have a resident calculator or notepad available, although the itemization feature does let you add up a column of entries that feed into a tax form. If you own or purchase the full Windows program from Microsoft, it comes with both these amenities. Then there’s Windows’ operating environment itself, which will be a new one for many. I actually found it kind of pleasant, but only because I have a mouse and enjoy using it. While you can use most of the features without a mouse, the documentation lacks much discussion of keyboard alternatives to the mouse. If you do your own tax return, and unless your return is very simple, you’ll find one of these programs well worth the price, especially since they can be purchased from the large mail-order software houses for about 60 percent of the list price. On balance, I think that TURBO TAX is a more sensible choice for most people: it is faster, seems to have a slightly more sensible design, and comes with a calculator. It also costs about two-thirds of what TAXVIEW costs. Also, at least for this year, TAXVIEW supports tax forms for only two states. However, if you have a supported laser printer, TAXVIEW is worth considering. In any event, as hardware matures to provide more us of resident programs, TAXVIEW will become a more serious competitor than it is today. Simon is IBM Professor of Mathematics and Theoretical Physics at Caltech. His address is 112 Formosa Ave., Los Angeles, CA; 90036.

Two Tax Programs for the IBM PC

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