Intuit TurboTax Online Deluxe 2007

For filing simple returns with the IRS, differences among most online tax-prep services aren't enormous. Each tool provides a comprehensive interview that explains IRS instructions, and each automatically fills in and e-files your tax return. But there are nuances to Intuit TurboTax Online that make it more like thorough desktop tax software--and thus make it our favorite.

TurboTax Online comes in many editions, each tacking on an extra $29.95 for state filing. The free edition should be good enough for 1040EZ filing, although 2nd Story Software's TaxAct is a better deal as it includes the state return for $15.95, total. We reviewed the $29.95 TurboTax Deluxe Online, which adds the Deduction Maximizer tool to help you get money back on charitable contributions, mortgage interest, and so on. The step-up $49.95 Premier Investments should suit those who earn substantial profits from stocks and bonds. TurboTax Home & Business costs $30 more for help with Schedule C business items. Additionally, if you like to do some work yourself but need some advice, Intuit's Personal Pro service offers telephone and online chat with a tax adviser, who also helps prepare and e-file your return. The service runs from $59.95 for simple 1040 federal filing only to 180 for help with Schedule C, D, E, and F items in addition to state filing.

TurboTax Online Deluxe 2006 mimics its desktop counterpart's easy-to-use interface.

Like its Web-based competitors H&R Block's TaxCut Online and 2nd Story Software's TaxAct, Intuit TurboTax Online runs in a browser window. It works with Firefox 1, Internet Explorer 6, Netscape 8, and Safari browsers. You'll need Firefox 2, IE 7, Netscape 8, or AOL 9 if your operating system is 32-bit Windows Vista. TurboTax Online stores your return on its secure servers, using industry-standard SSL encryption to transmit your data. Filing your taxes at work? Fear not. If you step away from the computer and forget to close the browser window, TurboTax Online saves and ends your online session after 20 minutes of inactivity.

Intuit TurboTax Online Deluxe 2006 has the same straightforward interface and easy-to-understand interview as its installable counterpart. The tabbed interface lets you jump between sections and pick up where you left off. Intuit shies away from accounting jargon and provides concise, well-written instructions that are simple to grasp.

On nearly every screen, TurboTax Online displays a running tally of your tax refund or taxes due, depending on your situation. To spare you from re-entering data, TurboTax Online can import your 2005 TurboTax return, your W-2, and data from Intuit Quicken 2005 and up. Though importing a W-2 didn't work in our tests of TurboTax desktop edition, it was seamless with TurboTax Online. The included Deductions Maximizer checks for 350 ways you could lessen your tax burden. To keep you from missing something, TurboTax forces you to choose the "None of the Above" option if something in this section doesn't apply to you. And you can opt for a quicker path if you're familiar with the process.

We liked TurboTax's interview, especially for Schedule C items. For instance, Intuit provided a separate field for communications expenses for a home-based business, whereas the online TaxCut and TaxAct left us guessing where to put those costs. TurboTax Online's Deductions Maximizer also did better than it competitors with regard to explaining what portion of our entered expenses were deductible. Intuit's Its Deductible, a handy utility for itemizing noncash charitable contributions, is an extra $20, but you don't need it if you make few donations.

For support, Intuit offers a searchable knowledge base and user forums on its Web site. Online e-mail technical support is available for free with a 24-hour response time. Online chat is open Monday through Sunday from 8 a.m. to 9 p.m. PST. TurboTax Online users get free chat and e-mail support for setup and usage questions. Phone support is free for installation queries, but calls for other questions--such as how to print or file a return--cost a hefty $39.95 per incident.

We found TurboTax Deluxe Online to be the most thorough and seamless browser-based tax service. However, its price is a drawback. You'll do fine with the bargain 2nd Story Software TaxAct if you're only grappling with a simple W-2 or 1040EZ. Filers with complex returns that include income from investments, businesses, and rental property, as well as numerous deductions, might find the $49.95 Online Premier or $74.95 Home & Business worth the extra cash. At the same time, desktop tax software is a better deal overall if you're filing returns for the whole household.