It will be interesting to see if the web versions of these tax packages
handle accessibility very well.
Published Sunday, February 1, 1998, in the San Jose Mercury News
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TAX software might eventually disappear from stores.
Instead, taxpayers will prepare their returns by paying a fee and running
the programs on the World Wide Web.
This year, for the first time, the two dominant providers of
tax-preparation software are making it possible to use their programs
without actually buying a CD-ROM or floppy disk.
Intuit Inc.'s "TurboTax" and Block Financial Corp.'s "Kiplinger TaxCut" are
both promising online versions this month.
"TurboTax Online," scheduled to launch Feb. 10, is a scaled-down cousin of
its store-bought cousin. But it's also less expensive -- users will pay
$9.95 to complete a federal return, compared with $20 to $50 for "TurboTax"
in a cardboard box. California residents will also be able to file a state
return for an additional $4.95.
Intuit estimates 30 percent to 40 percent of individual taxpayers will be
able to use "TurboTax Online," which will be found at
http://www.turbotax.com .
The other two-thirds of taxpayers aren't eligible because the online
program doesn't support those who own a business or rental property; have
exercised employee stock options; made contributions to an IRA, SEP or
Keogh savings plan; received retirement income; paid or received alimony;
sold their home in 1997; or made non-cash charitable contributions in
excess of $500.
There's also a hardware limitation: "TurboTax Online" requires Windows 95
-- leaving out Windows 3.1 and Macintosh users -- as well as either version
3 or version 4 of the Netscape Navigator or Internet Explorer browsers.
Those who meet the requirements will find "TurboTax Online" almost
identical to the store-bought program, with a question-and-answer interview
process culminating in a completed return than can either be printed or
submitted electronically to the Internal Revenue Service.
Moving from one screen to another is slower, however, because information
has to move through the PC's modem.
Also, no data is stored on the PC itself, unless the user chooses to
download a copy of his or her file; instead, all numbers entered into
"TurboTax Online" are kept on Intuit's computers -- a situation that may
fluster those concerned with privacy. Intuit, however, has set up extensive
security safeguards and pledges to keep all the information confidential.
Block Financial initially said late last year its "TaxCut Online" would
launch in mid-January. Subsequently, it shifted the date to the end of the
month and then shifted again to a promised debut in mid-February.
"TaxCut Online," to be available at http://www.taxcut.com for $19.95, will
offer all the features of its store-bought counterpart, according to Block,
so that almost any taxpayer should be able to use the online program. It
will also function on all three home operating systems -- Windows 3.1,
Windows 95 and Macintosh.
Unlike "TurboTax Online," "TaxCut Online" requires downloading a big block
of software -- anywhere from 1 to 3 megabytes, which could take up to 45
minutes through a 28.8 kilobits-per-second modem. Users would interact with
the program through their Web browser, but wouldn't need to be connected to
the Internet continuously while working on their taxes. Personal tax data
would remain in the user's PC until printed out or filed electronically.
Several smaller companies that don't make conventional consumer tax
software have also jumped into the business of online tax preparation.
Among them are Tax Link Inc. with "Auto Tax" (http://www.autotax.com);
Taxsoft Inc. with "Taxsoft Java" (http://www.javatax.com); Tax Systems Inc.
with "Prep1040" (http://www.taxsys.com); and Universal Tax Systems Inc.
with "SecureTax" (http://www.securetax.com).
-- Mike Langberg
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