Before you buy tax preparation software, you need to make sure your computer has the necessary system requirements, and you'll want to consider which program will best suit your personal needs at the least cost.
Most tax programs require a Pentium processor, at least 16 MB of RAM (32 MB is recommended), at least 50 MB of hard disk space, at least a 2X CD drive (4X or better is recommended), and a printer.
Have You Used Tax Software Before?
All other things being equal, if you used tax preparation software last year, there's some argument for using the same program this year. Why? To save yourself some data entry, since most programs will import basic information like name, address, social security numbers, etc. to reduce re-keying. However, this is NOT a good reason to stay with a program you found cumbersome or confusing.
Will You File Online?
If you have a simple return you can prepare and file your taxes online, without buying tax software--you just pay a fee, enter the information online, and send it into cyberspace. It's helpful if you have a fast internet connection. TaxACT Online has more extensive resources and is cheaper than Turbo Tax Online, which doesn't have the extensive tax resources the desktop version offers.
How Complex is Your Return and How Much Do You Know About Taxes?
Some programs are fine for simple returns but not for more complex returns. If you file the short form (no itemized deductions), or if you file the long form (itemized deductions) but don't need other schedules, any of the top three programs will do the job. If your return is more complex, stick with Turbo Tax or TaxCut, especially if your knowledge of tax law is limited.