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-- by Joel T. Patz
TurboTax is a small business' best friend when it comes to the annual nightmare of filing tax returns. TurboTax for Business on CD-ROM lets you install one of four versions: the regular 1040 (if you have a small business that uses Schedule C), Form 1120 (for corporations), 1120S (the version I tested, for subchapter S corporations) or Form 1065 (partnerships). (See the "Dollars & Sense" feature in this issue to learn about the standalone 1040 version of TurboTax.)
A much-improved user interface greets you when you begin this year's program. You can use the EasyStep interview method (where you answer a series of questions and can read helpful explanations of terms and rules), or the brute-force, fill-in-the-form method. Either way, TurboTax does all the complex math and fills in figures on all related forms.
I found EasyStep more effective than in years past. Explanations are clearly written, and the text is easier to read. Unfamiliar terms are underlined and displayed in blue; click on them for an explanation or additional detail about how to qualify for the item in question. At the top of the screen are introductory text and the questions themselves, with Yes and No buttons or fields for your own data entry. Below is a tabbed window. One tab shows you a close-up of the form or worksheet as you fill it in; the other, called Where Am I, shows your progress through the interview. I liked being able to enter data in either a questionnaire's text box or on the form itself, though changing values on the form was tricky: The program won't recognize the new value until you've pressed the Tab key-something not immediately obvious.
The Depreciation Expert was helpful to me. When you need to enter depreciation for a new or existing asset, TurboTax makes it easy. You can go through the standard depreciation questions (year placed in service, basis and so on), or get detailed explanations each step of the way, such as learning what costs can be incorporated into an asset's basis.
If you used TurboTax last year, you can import that data so you won't be burdened with reentering figures such as accumulated depreciation. If you use Quicken, QuickBooks or other financial software that exports to the industry-standard TXF format and have associated tax categories for each transaction category, you're also in luck, because TurboTax can import the data and prefill several lines on the appropriate forms.
TurboTax gives you online copies of J.K. Lasser's Tax Deductions for Small Business and Tax Savvy for Small Business, as well as its own tax tips and the complete text of IRS publications.
Throughout the process, TurboTax warns you of errors, and during the Final Review you can have the program check for omissions or errors, such as conflicting answers.
It's easy to navigate between forms, jump to any supported form or see a list of only those forms and worksheets that contain data. For most form lines, you can create a list of supporting items whose total is automatically transferred to the form. At logical intervals, TurboTax gives you a helpful reminder to save your work.
TurboTax is truly the most useful way of tackling the yearly tax grind with PC technology.