Because of recent tax-law changes, taxpayers have to navigate even more tricky new turns. For example, Congress waited to extend three major tax deductions until December - after the IRS had gone to press with its 2006 forms and instructions. Thus, taxpayers have to follow special instructions to claim them. Tax-prep programs do the work for you.

Tax software is big business - and getting bigger each year. Revenue from Intuit Inc.'s TurboTax surged 25 percent last year to more than $700 million, and the company is forecasting strong gains this year. In second place is H&R Block Inc.'s TaxCut. Both Intuit and H&R Block are scheduled to announce their latest financial results Thursday.

Recently, I have been testing high-end versions of TurboTax and TaxCut. Once again, the software makers have made their products easier to use. They've improved the clarity of their questionnaires and offered helpful new advice. However, one of the biggest attractions of tax software is also one of its biggest dangers: Software has improved so much that it can give you a false sense of confidence. Veteran tax preparers say some people race through the process too quickly, make mistakes and overlook valuable tax-saving opportunities.

As good as these products are, many people with complex tax situations still need a human hand to guide them through the Internal Revenue Code labyrinth. That is particularly true for people with major life changes, who own their own businesses, have stakes in partnerships, or have to file several state tax returns. "Unless you have a reasonably straightforward situation, you've got a financial risk in doing it yourself - even with the help of consumer software," says Claudia Hill, owner of Tax Mam Inc., a tax-preparation and planning firm in Cupertino, Calif., and an enrolled agent, which means she is licensed to practice before the IRS.

Which program is best for you? That depends on many factors, such as how complex your tax situation is; how much you know about taxes; whether you're up-to-date on all the latest changes; how much your tax situation has changed since last year; and how comfortable you are with computers.

I found both programs I tested to be impressive and remarkably easy to navigate. While neither can handle every question, they each do a fine job with the basics and even with a few curve balls I threw at them. Both companies also offer free helpful tips and calculators on their Web sites: TurboTax (turbotax.intuit.com) and H&R Block (hrblock.com).

Here are a few things to consider before buying any tax-prep program:

- If your income is $52,000 or less and you have a fairly simple tax situation, such as claiming the standard deduction, consider not buying either brand. You can get free federal tax-preparation and electronic-filing services online through the "Free File Alliance," a partnership between a group of software makers and the IRS. Go to the IRS Web site (http://www.irs.gov), and click on "2007 Free File." At press time, there were 19 free products to choose from, including TaxACT, TaxSlayer.com and Liberty Tax Online. The IRS estimates about 95 million taxpayers, or about 70 percent of all individual filers, can take advantage of Free File. Watch out for special restrictions, though, such as age or geographic limits.

- If your income is more than $52,000 but your tax situation is fairly simple, TaxCut should be fine - and it's generally less expensive than TurboTax. (This year, all versions of TaxCut are PC and Mac-compatible. Last year, H&R Block didn't offer a Mac version.) You don't have to buy a tax-prep package in a store. Look into Web-based, online tax-prep products - which are less expensive.

- If you have a more complex tax situation, I recommend TurboTax. One aspect of TurboTax that I find especially useful: I was able to download electronically the information on the W-2 form from my employer into TurboTax. TaxCut doesn't offer this feature.

You can also import electronically large amounts of investment information, such as dividends and interest income, from numerous financial institutions. That saves time, aggravation and errors. But not all employers and financial institutions participate. For example, I wasn't able to download the form showing my wages from Yale University, where I taught a course last year. Separately, I like TurboTax's handy "ItsDeductible" feature that estimates the value of used clothing and other noncash items donated to charity. TaxCut has a similar feature, but TurboTax generally was more helpful, especially for high-end items.

- If you've decided to buy tax-prep software and have also been thinking about buying personal-finance software, such as Quicken or Microsoft Money, do both at the same time. You can save money through packaged deals.

- If something doesn't look right, don't always assume the software is perfect. Wes Bushman, who lives in the Tampa Bay, Fla., area and is a longtime TaxCut user, recently discovered a problem with TaxCut involving calculation of an underpayment penalty on Form 2210 and alerted the company. A Block spokeswoman says Block did recently become "aware of an issue" regarding that form "through our own research," and that "a fix is already in the works." She adds that "less than 0.1 percent of TaxCut filers have been affected." Despite the glitch, Mr. Bushman says he'll probably buy TaxCut again next year.

- Even if you think you know everything about taxes, be careful about zipping through the interviews, even if the questions seem irrelevant. There have been several important tax-law changes, and they're easy to miss. Also, be sure to download all updates.

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