Here's an updated, hands-on look at tax preparation apps and utilities that you can run on youriPad or iPhone to ease the pain of figuring out whether you're going to get a refund or not.
Although we've reviewed them on an iPad, the six apps mainly featured in this roundup will operate on either an iPad, iPhone, or iPod touch. We've also gone hands-on with an assortment of utilities -- for estimating your taxes, getting answers to tax questions, and storing your returns online, for example -- that are compatible with all three platforms.
In addition, as we'll see, the three top makers of tax prep software -- Intuit, 2nd Story Software, and H&R Block -- now offer iPad-only apps. Somewhat similar in functionality to the online editions of the vendors' software, these iPad-only apps are capable of supporting complex as well as simpler returns.
Let's move on to the specific apps.
TurboTax SnapTax (Intuit)Federal return and e-file/free; state e-file/$14.99
Offeried in online, desktop, and mobile editions, TurboTax is easily the best known and most widely used do-it-yourself (DIY) tax prep software in the world. Product include TurboTax SnapTax and TurboTax for iPad, for instance.
The iOS edition of SnapTax -- compatible with the iPad, iPhone, and iPod touch -- isn't suitable for everyone, something that is also true of most other tax software supporting all three devices. You can only use it if you file a Form 1040EZ return. That return puts certain constraints on who can file. You need to have income under $100,000 ($120,000 if you are married filing jointly), and you can't itemize. You need to take the standard deduction. You can't use Form 1040EZ if you have dependents, either, or if you have non-W-2 income such as pensions. The sole exception is if you collect unemployment.
Assuming that you qualify, though, using SnapTax is a literally a snap. W-2s are entered by taking a picture of them. SnapTax then uses OCR (optical character recognition) to extract the data from the form and enter it into the tax return. You can have multiple W-2s.
For expanded views of the screenshots at right, please click on the images.
However, I had trouble getting a usable photo. SnapTax kept telling me that the OCR failed. Finally, I found a dark folder to place the W-2 on, and I got the lighting just right. SnapTax still missed some of the information on the W-2 (the print was somewhat light), but you need to verify the data anyway, so I was able to enter the information that was omitted. The data that SnapTax did recognize was completely accurate.
The iPad-only TurboTax app comes in three flavors: Deluxe, Premiere, and Home and Business. Much like the online and desktop editions of TurboTax software, TurboTax for iPad guides you through the tax prep process in a step-by-step way and tries to help you find credits and deductions. The app also supports file sharing through iTunes for transferring returns between an iPad and a PC or Mac.
Intuit also offers several free utilities for iOS that you might find useful in the tax preparation process: My Refund, TaxCaster, and It's Deductible. My Refund lets you check on what's happening with your refund, while TaxCaster lets you enter your approximate income at any time and gives you some idea of what your tax liability will be. That's handy if you think you might owe money at the end of the year and you want to do a quick approximation to see if you should add more withholding.
It's Deductible lets you record and estimate the value of noncash charitable donations so you can accurately claim them as deductions,
TaxACT Express (2nd Story Software)Federal return and e-file/free; state e-file/$7.99
TaxACT also offers a complete line of desktop, online, and mobile tax preparation products. These include TaxACT Express -- a cross-device iOS app in the same general category as TurboTax SnapTax and TaxSlayer GO -- as well as TaxACT Free Federal Edition for iPad.
Yet although TaxACT Express runs on the iPhone and iPod touch along with the iPad, it is designed to support not just simple returns but some more complex situations. The app can handle W-2 forms, dependents & dependent credits, interest income, dividend income, unemployment compensation, education credits & deductions, Earned Income Credit, and Saver's Retirement Credit.
Easy to use as well as relatively comprehensive, TaxACT Express also offers great pricing of $7.99 for state e-filing.
TacACT Free Federal Edition for iPad also offers free federal return and e-filing, but state e-filing is priced at 14.99. Features of the iPad-only app include tax guidance for one "life event" of your choice (plus hurricanes and other disasters); a college financial aid worksheet; TaxACT Alerts and Examiners, for warning you of missed opportunities and potential errors; and a tax glossary containing over 300 terms.
To go along with its return preparation products, TaxACT also provides several useful free utilities, including the TaxACT Central app for iOS. It's easy to become disorganized during tax season. What are the deadlines? Did I receive all my documents? Have I filed all of them? TaxACT Central is designed to let you keep track of all that. It offers a checklist of tasks that need to be accomplished, lets you check the status of an e-filed return, and allows you to create a Free Federal or Deluxe Edition account on the vendor's website. There's even a tab that lets you get answers to the most common tax and return related questions.
Another cool tool for iOS is the DocVault app. This gives you a free online account that lets you save encrypted copies of your returns, and also snap photos of receipts and other supporting images that you might need when preparing your return.
If you do your tax return using the Web-based TaxACT Deluxe, you can import and attach these DocVault images to the return so you have substantiating evidence of your expenses. These images aren't transmitted along with your return when you e-file. They are just for your own use.
H&R Block Tax Preparation 2013 (H&R Block)Federal Free Edition/free; state e-file/$27.99
H&R Block is the best known name in tax preparation, even though it doesn't hold the number one spot in tax prep software.
The H&R Block app for the iPad, iPhone, and iPod touch will let you prepare a simple return, but the navigation could be improved considerably. If you are going to need information, or know about how to enter something, the time to tell you about this is before you actually do the entry, not several fields later. I found this annoying when doing a simple return.
For example, upon creating an account, I deliberately chose a password containing my username. First the software told me that the password was too weak. Then, after I added a few special characters, finished the screen, and tried to create the account, I received a message that the password could not contain my username at all.
Given that apps from other vendors are at least as inexpensive or even less expensive, and not as frustrating, you might want to skip this app and use either another vendor's iOS app or one of Block's online, desktop, or iPad-only editions.
H&R Block's iPad-only app is called -- what else? -- H&R Block for iPad. Similar in UI (user interface) to H&R Block Deluxe Online, this was the first iPad app to allow you to access the same return from an iPad and a PC.
TaxSlayer GO (TaxSlayer)Federal return and efile/free; state efile/$23.99
In many ways, TaxSlayer GO -- another app for the iPad, iPhone, and iPod touch -- is very similar to TurboTax SnapTax. Both limit you to filing Form 1040EZ, which means that you can only have wage and unemployment income.
TaxSlayer GO is also free, though e-filing in a supported state (there's a list on the TaxSlayer website) will cost you about $24.
Because the 1040EZ form is very simple, so is the return preparation process. As with SnapTax, you take photos of any W-2s you have received and enter any unemployment benefits you've gotten.
But also as with SnapTax, I had trouble getting my test W-2 to OCR, most likely because of light print on the form and not enough contrast between the W-2 and the surface it was on. I used the same technique with TaxSlayer GO as I did with SnapTax's dark folder for the background and a bright light.
TaxSlayer GO picked up slightly less data than SnapTax, but as with the TurboTax product, I was given the opportunity to check the results and edit/enter where necessary. The information picked up with the OCR was accurate.
TaxSlayer also offers a free Tax Refund Calculator utility that you can access on its website. It asks you questions about your income (and your spouse's if you have one) -- along with withholding and expenses -- and it estimates what you will owe or get as a refund. I found the sliders here clumsy to use, but you can simply enter the figures in the boxes at the right end of the slider.
The Tax Refund Calculator is just an estimator, but if you have fairly exact figures, it will give you fairly accurate estimates. It doesn't, however, calculate any deductions. You need to do that yourself and enter the calculated amount into the utility.
Ask a Tax Preparer (CPAdirect Marketing, Inc.)Free
The title of this free app is also its description. Available for both the iPhone and iPad, it links with a site owned by the National Directory of Registered Tax Preparers and Professionals, Ltd.
Human tax preparers register with the site. When you enter a question into the application and hit send, it goes to one of the preparers who has signed up with the site. You don't get to choose where your question goes, nor do you have any control over who answers it and what their qualifications are.
There's also no telling how quickly your question might be answered. Depending on who your question gets routed to, it might be some time before you receive a response. And when you do, there will probably be a pitch by the respondent for their tax preparation services.
There is also an archive of past questions which you might find useful, and the site lets you find a tax preparer near you based on the zip code that you enter when asking for a referral.
Ask a Tax Preparer offers some useful information, but you can probably find answers just as well and easily by using a search engine like Google or Bing. Even most tax preparation apps have a help facility that will let you ask a question, either to a knowledge base, the vendor's support staff, or a user community. Since most questions come up while you're actually preparing the return, chances are you're not going to want to wait around an undetermined time for the answer.
iDonatedIt (BMG Certified Public Accountants, LLP)$2.99
iDonatedIt was the only one of the applications we reviewed that we had to pay for up front. That's too bad, since I think most people will see the value in it and pay for it after using it once.
Like Intuit's It's Deductible, iDonatedIt lets you estimate the value of noncash contributions. Although It's Deductible is Free, I much preferred iDonatedIt.
Many of us make noncash donations. It might be stuffing the occasional bag of used clothes and shoes into one of the ubiquitous large bins scattered everywhere, or dropping off a chair you replaced at a Goodwill Store.
If you itemize deductions, the IRS will let you take a deduction for a noncash donation. Figuring out what its value is, though, is difficult. Even if you paid $50 for a fancy shirt, its value when you stuff it into a collection bin is nowhere near that amount.
iDonatedIt lets you itemize your noncash deductions and put a value on each of them. It has numerous categories of likely items including clothes and appliances, and it provides a useful valuation on the item based on condition.
For example, a Men's Casual Shirt was valued at $3 in Good condition, $5 in Better condition, and $7 in Best condition. You can (and should) attach a photo of the item in case the deduction is questioned, and there are fields to enter the date and charity information (which is required in the tax return).
Members of my family frequently cull the closets for items we don't use any more, and we also give away unused appliances and the like to worthwhile organizations. For the most part, I haven't bothered to take this deduction, simply because I didnt want to try to value everything.
Next time, now that I have this handy little three-buck app, it will be different. I don't begrudge the years I didn't value and take noncash deductions. I'm happy if a donation provided something useful to someone in need.
But when it comes to preparing my tax return, I have no qualms about taking any and every deduction to which I'm entitled.
Nice job, BMG CPAs!
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