In preparing the tax returns of four hypothetical families, we included a few traps. For most of our scenarios, we used TaxCut Premium Federal and TurboTax Deluxe Deduction Maximizer. Here's how the software did.

The Shermans, ages 45 and 42, with two teenaged children
Issues: Alimony payments, early IRA withdrawal for medical reasons, rental property purchased in mid-2006.
Trick: Did the programs lead us to identify prepaid property taxes held in escrow on the new rental home?
TaxCut: No
TurboTax: No

The Poppins, 60 and 52, with three children 17 and older
Issues: (TurboTax Home and Business used.) Two salaries plus a home business, depreciated home-office equipment, stock sale, alimony payments.
Trick: Did the programs flag over-payment of Social Security taxes?
TaxCut: Yes
TurboTax: Yes

The Templar-Crows, 49 and 38, with a 13-year-old child and a dependent mother
Issues: Two salaries, including nontaxable combat pay, relocation for new job, educator expenses, education credit, employee business expenses, jury duty, hybrid-car purchase, prior-year tax refund, household employee, gambling winnings.
Trick: Did the programs properly report jury-duty pay and reimbursement on the tax form?
TaxCut: Yes
TurboTax: No

The Bagginses, ages 74 and 66, both retired
Issues: Foreign bank account, long-term capital gains, fire-related casualty loss, railroad pension-fund and Social Security benefits, estimated tax payments, late-tax payment penalty.
Trick: Did the programs prompt to identify foreign bank accounts?
TaxCut: Yes
TurboTax: Yes and no. If you just report interest, no; if you report foreign tax paid, yes.