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Don't overpay if you have a straightforward tax return

Most people actually don't need to pay $50 and up for TurboTax software, experts say. TaxACT Online Ultimate 2012 (*Est. $20) may be all you need. "Try it first," says Kathy Yakal at PCMag.com, where TaxACT nearly steals the Editors' Choice award from TurboTax this year. TaxACT is basically the same as the top-rated TurboTax Deluxe 2012 (*Est. $50) , but with slightly less sophisticated help features and investment data importing.

But as Yakal points out, "Most people don't have overly complex tax situations. Just some W-2 and/or self-employment income, maybe some interest income and an IRA and a mortgage." Self-employment income can be a challenge, but TaxACT Deluxe Online (*Est. $10) provides the tools to report it. TaxACT Online Ultimate is just Deluxe with the $10 state prep/e-file fee included. TurboTax and H&R Block At Home both charge about $35 for state returns.

TaxACT doesn't skimp on extras and you get all the same features as TurboTax. It imports last year's tax return, guides you through common deductions like home mortgages and childcare, and even includes a donation assistant to tell you how much those clothes and toys you gave to charity are worth, just like the pricey brands.

The New York Times' Tim Gray finds TaxACT a little quirky, in a good way. "Its interview questions come in a different order, and some of them address surprising topics," he says. "Only TaxACT asked me whether I had a conscientious objection to Social Security and had filed Form 4029 documenting it. Members of some religious denominations can be exempt from Social Security taxes, as long as they promise not to take benefits. I didn't need to know this, but it was a fascinating tidbit to learn -- and I'm a fan of anything that relieves tedium at tax time."

TaxACT offers CD/download versions for just a few dollars more. If you're a confident filer, TaxACT Free Edition is the best deal around: You can file even complex federal tax returns absolutely free minus some of the extras of the paid version. See our section on the IRS Free File Program for more information.

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TurboTax Deluxe Federal + E-File + State 2012
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