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Benjamin Franklin once said, “In this world, nothing can be said to be certain, except death and taxes.”
Before you know it, tax season will be upon us. Filing taxes can be stressful, and many people have anxiety about getting it done or potentially doing it wrong.
In the age of the internet, filing your taxes online has become the norm.
With so many options to choose from, it can be hard to determine which tax software is best for you. There is no one-size-fits-all when it comes to tax services, but it’s best to understand your options before January 28th rolls around.
What is the Best Tax Service or Software?
Best for: Those whose motto is “you get what you pay for.”
Cost: Free package available; Deluxe package: $39.99; Premier package: $59.99; Self-Employed package: $89.99
TurboTax is generally regarded as the gold standard for online tax software despite its price. It offers 24/7 help for customers, guided navigation and supports various types of filers.
The interview-style guided navigation simulates a conversation with a tax preparer. However, it may not be worth the price tag if you only require a simple return with little to report.
- Step-by-step guidance
- 24/7 phone support
- Audit support and audit risk identifier
- Explain why technology, which explains larger portions of your return
- More expensive than most software
- No chat support
- Aggressive upselling
Read our full TurboTax Review.
Best for: Those looking for additional in-person support.
Cost: Free package available; Deluxe package: $29.99; Premier package: $49.99; Self-Employed package: $74.99
The assistance that H&R Block offers can make the world of a difference for someone with an unusual tax situation or even a first-time filer.
- Trusted brand
- Live tax help
- Maximum Refund Guarantee
- Free in-person support at any of their nationwide locations
- An additional 5% on your refund if you choose to receive all or part of it on an Amazon gift card
- More expensive than most software
- Still working through technical hiccups
- No step-by-step guidance
Read our full H&R Block Review.
Credit Karma Tax
Best for: Those who believe there is nothing better than free.
If you are a new filer and would like to file your taxes for free, Credit Karma is a great platform. Credit Karma Tax is a young tax filing platform, which means that it is still continuing to work through some glitches.
Despite working through some technical issues, the user experience is uncluttered and simple to use. Its self-guided navigation and W-2 import system make the daunting task of filing less intimidating for first-time filers.
- Truly free platform
- Dedicated tax support center
- Tax knowledge articles to explain the product and important topics regarding how to get the most out of your return
- Chat help
- Does not support you if you have lived in more than one state during a fiscal year
- Not the best choice for active traders or real estate investors, who will need to enter each trade or purchase by hand
Read our full Credit Karma Tax Review.
Best for: Those who are always hunting for a bargain.
Cost: Free package available; Basic: $9.95; Deluxe package: $29.95; Premier package: $34.95; Self-Employed package: $49.95
While it doesn’t come with all the bells and whistles of TurboTax, it is a perfectly sound option for those who know what income and deductions you are going to file.
- Maximum Refund Pledge similar to H&R Block
- Informative pop-ups that guide you through forms
- Inspects your return for errors, missing information or opportunities to maximize your return
- Donation assist with paid versions
- Fewer tools and guides than competitors
- Limited customer support
- Additional charge for audit support
Read our full TaxAct Review.
Best for: Those who hate endless data entry.
Cost: Free package available; Deluxe package: $17; Premier package: $37; Self-Employed package: $47
With its low prices and sophisticated user interface, TaxSlayer is a worthy competitor in the low-cost tax software space.
If you hate typing data or maybe are not as confident filing, TaxSlayer allows you to tax a picture of your W-2 and automatically populates data entry. This can make filing your taxes quicker than typing out each data point by hand.
- State tax filing for free
- Refund guarantee offered
- Free email and phone support
- Error checking software
- Refund guarantee not as robust as competitors
- The free program only available for 1040 filers
- Lackluster audit support
Best for: Those who are self-employed or freelancers.
Cost: Free package available; Deluxe package: $6.99
While FreeTaxUSA is a lesser-known tax filing software, it is actually incredibly credible.
One of the original members of the IRS Free File Alliance, FreeTaxUSA is an online preparation system that covers many tax situations, including those that are more complex.
However, this does not mean that it covers every tax situation.
- Cheap state returns
- Accuracy guarantee that pays interest or penalties due to calculation error by their system
- Includes Schedule C (self-employment), Schedule E (rental real estate), and Schedule D (capital gains)
- Limited customer service for the free program
- Need to pay to make any changes or corrections
- Audit assistance is limited
- Does not support the following forms:
- Foreign employment income (Form 2555)
- Foreign mailing address
- Household employment taxes (Schedule H)
- Nonresident alien returns (Form 1040NR)
- Farm rental (Form 4835)
- At-risk limitations (Form 6198)
- Installment sales (Form 6252)
- Tax for children with more than $2,000 in investment income (Form 8615)
- Prior year minimum tax credit (Form 8801)
- Archer MSAs (Form 8853)
Read our full FreeTaxUSA Review.
Best for: Those who are experienced tax filers but looking to save.
Cost: Free package available; Deluxe package: $18.99; Premier package: $34.95
Like many of the options listed here, E-File is focused on filing your taxes at a fraction of the cost of TurboTax or H&R Block.
E-File will guide you through several basic tax forms in the free version and includes various additional forms in its Deluxe or Premium programs.
It offers less guidance than its pricier competitors but can help experienced tax filers from spending a fortune.
- Fast form filing
- Free audit defense tools
- Mobile-friendly site
- All forms available with a paid version
- Quick refund option
- No option to upload a photo of W-2
- No CPA assistance
- Guided support is basic
Best for: Those who prefer a program backed by an established company.
Cost: Free package available; Basic: $44.95; Deluxe package: $55.95; Premier package: $69.95
eSmart, which is an extension of Liberty Tax, focuses on offering affordable tax returns through a user-friendly platform.
Much like H&R Block, eSmart is backed by thousands of brick and mortar locations. Despite being a lesser-known software, they definitely have the expertise and resources to back up their services.
- Maximum Refund Guarantee
- Free online chat and tech support
- Pays for any fees associated with incorrect calculations by their system
- Fewer resources than competitors
- No phone support
So, Where is the Best Place to File Taxes?
One of the biggest questions for most people is if they are better off working with an accountant or filing online. The answer can vary based on how complex your tax situation is.
An accountant can help ease the stress of navigating the new tax law and also help you avoid any fees associated with filing incorrectly. They can help you properly claim any mortgage interest deductions, rental income or business income. They can also assist if you feel like you are at risk for an audit.
Obviously, hiring an accountant will cost more than using online tax software. Typically, an accountant will cost more about $50 or so more than the average premium page. If your tax situation is complicated, such as for small business owners or anyone self-employed, it might be worth it to save yourself the stress and hire an accountant.
Those with less complicated tax situations can file online with ease. Students, W-2 employees or anyone planning to take a standard deduction would not necessarily benefit more by hiring a tax professional.
What is Free File? Do I Qualify?
Before you embark on filing your taxes, find out if you qualify for Free File.
The IRS partners with about a dozen tax filing services to provide federal returns for free with no fees or up-charges. Typically, you qualify for Free File if your annual income is below $66,000. This can really help anyone who is pinching pennies or trying to beef up their savings accounts.
Regardless if you qualify for Free File or not, it’s not a bad idea to limit your online filing options to these companies as they are approved by the IRS. You don’t want to take chances on a system that the IRS doesn’t recognize.
Which is The Best Tax Software?
As we previously stated, there is no tax software that will be perfect for everyone. Depending on how much you would like to spend or how complex your taxes are, you may decide to go with one program over another.
As always, be sure to do your taxes sooner rather than later. You definitely do not want April 15th to roll around without having decided on how to do your taxes.