Comparing the 7 Best Tax Return Software Programs
8:29 AMWith the right software, filing your own taxes can be easy and affordable. But with so many DIY options, how do you choose? Here we’ll compare the 7 best tax software programs to help you find your perfect fit.
In 2016, 43% of tax filers used a digital tax preparation tool. Being that was a few years ago, I’d venture a guess that the number has gone up since then. So, why the huge jump in e-filing taxpayers? The federal “Free File” program may be one answer. Free File is an alliance between the IRS and certain tax preparation software companies. If your income is below $66,000, you can use Free File software to quickly and easily file your taxes online for free. If you’re planning to jump on the bandwagon this year by filing your taxes online, be sure to get the best tax software for your particular needs. Luckily, there are plenty of great options to choose from. Here, we’ll look at seven tax preparation software companies–TurboTax, H&R Block, TaxAct, Tax Slayer, Free Tax USA, e-File, and e-Smart. While these aren’t the only names on the market, they’re some of the most well-known. Any of these options could be a good fit for you, depending on your needs and how much assistance you’ll need to safely get through filing your taxes. Related: What happens with you miss the tax deadline?.
How to Choose Your Tax Preparation Software
To start, you’ll have to get an idea of what type of help you’ll need. If you’re a straight W-2 employee with employer-paid healthcare, a simple retirement plan and planning to take the standard deduction (which is increasing this year), you don’t need much. The most basic version of any of these tax software options would likely work for you. But if you need more forms to claim things like mortgage interest deductions, rental income, or business income, you’ll want to dive deeper into what each of these software options offers and how much they’ll cost. You may also want to look at the long-term benefits, like audit security if your audit risk is high or file storage if you plan to use the same tax software year after year. We’ll take you through each of our favorite software choices. But for a quick comparison, the table below has everything you need to know about the features included with each software option:| TurboTax | H&R Block | FreeTaxUSA |
TaxAct | Tax Slayer | eSmart Tax | e-File | |
|---|---|---|---|---|---|---|---|
| Federal e-File Cost | $0 to $110 | $0 to $84.99 | $0 to $6.99 | $0 to $74.95 | $0 to $47 | $44.95 | $0 to $34.49 |
| State e-File Cost | $40 | $0 to $39.95 | $12.95 | $0 - $49.95 | $0 to $39 | $36.95 | $28.95 for unlimited state tax returns |
| Free File Qualifications | Simple returns | Income under $69,000 and simple filing situations |
Income under $69,000 or qualify for EITC | Simple filing situations | Able to file using basic 1040 | Simple return situations, taxable incomes under $100,000 | Taxable income of under $1,000; married filing jointly or single, no dependent deductions |
| Forms Available on Free Edition | 1040, Schedule EIC, limited interest and dividend income | 1040, Form 1099, Forms 1095-A/1088/1098-E/1098-T/1099-B/1099-DIV/1099-INT/1099-R, Schedule EIC | Most tax forms | 25+ tax forms | 1040 | Form 1040, Form 8853, Schedule A, Schedule B | 1040, Schedule EIC |
| Step-by-Step Guidance | Yes | Yes | Yes | Limited | Limited | No | Limited |
| Bookmarking Capabilities | Yes | Yes | Yes | Yes | No | Yes | Yes |
| Getting Your Refund | Direct Deposit, Check, H&R Block Emerald Prepaid Mastercard, Amazon Gift Card with bonus | Direct Deposit, Check, H&R Block Emerald Prepaid Mastercard, Amazon Gift Card with bonus | Direct Deposit, Check | Direct Deposit, Check, Serve Free Reloads Card | Direct Deposit, Check, Debit Card, Bank RT/File & Go Refund Transfer | Direct Deposit or Check | Direct Deposit, Check |
| Help Options | Online Chat, Phone | Online Chat, Phone | Chat, Email | Phone, Email | Email, Phone, Live Chat on All Plan Levels | Online chat or email | Online Form |
| Prior-Year Returns Imported | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Automatic Import | Yes with photo of W-2 or auto-import |
Yes | No | Yes | Yes | No | No |
| Accuracy Check | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Audit-Risk Check | Yes | Yes | No | Yes | Yes | No | No |
| Audit Support | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Saves Filed Taxes Online | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Mobile-Friendly | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
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TurboTax
TurboTax is one of the most popular online tax preparation options, but it can also get pricey. It offers some great features and a very slick, easy-to-use interface. If you’re nervous about missing something when filing your taxes online, TurboTax may be the software for you. It walks through every potential income, expense, deduction, and credit option, one by one. TurboTax offers:
- A 24/7 help line for customers, including the ability to screen share with a representative so that they can easily figure out exactly what’s going on with your taxes.
- Snap and Autofill, which allows you to auto-fill your W-2 information by uploading a picture of your W-2 form. This can save you some time. Depending on who you work for, just your personal and employer information may be enough to pull your W-2 information into your tax filing automatically.
- A mobile app, which lets you file your taxes on the go or even if you don’t have a home computer.
- ExplainWhy technology, which will highlight and explain the largest components of your tax return, so that you can have a better understanding of those components.
- SmartLook, which lets you connect to a TurboTax expert via video to get answers and guidance when you need it.
- An Audit-Risk identifier that will scan your taxes for auditor red flags after you file, allowing you to see how likely you are to be audited this year.
- Audit Support, which is free for basic answers to questions if you’re audited at any point after filing your taxes. You can also choose to pay for additional audit support up front, which would then give you access to a professional who would take care of most of the proceedings in case of an audit.
H&R Block
H&R Block is a trustworthy name if you want to go and have your taxes done in person, but its software is also a good option. It’s still not quite as intuitive as TurboTax’s, but it’s getting there. And it also has started offering the option to get live tax help while you’re filing your own taxes at home. H&R Block offers:
- Its Maximum Refund Guarantee, which means that if you use H&R Block’s software as well as another program that gives you a smaller tax liability or bigger refund, you’ll get a refund and free amendment to your return.
- A bonus on your return amount when you choose to receive your funds as a gift card. You can get an additional 5% on top of your return amount when you choose to receive some or all of your refund as an Amazon gift card.
- Free in-person audit support if you purchase and use their software. When you get audited, your audit support is free, and comes from a real-live person. This is one of the better audit support options on the market.
- Loads of forms available on its free version. Each type of tax software comes with various levels, with the more affordable options giving you access to fewer tax forms. The free version of H&R Block is surprisingly robust and fits a variety of tax situations. Some of the impressive features of the free version include support for student loan interest, tuition payment, child and dependent care support, social security, and unemployment income.
FreeTaxUSA
If you’re self-employed or otherwise have more complex taxes than the average person but also don’t want to pay a fortune, FreeTaxUSA may be the software for you. Its deluxe version handles tax forms that most softwares don’t handle until you pay for the premium or self-employed version. This includes Schedule C for self-employment, Schedule E for rental real estate, and Schedule D for capital gains. Instead of upgrading to access more forms, the Deluxe version includes additional support and audit support for a low price. FreeTaxUSA offers:
- Free customer support via email, or if you pay for the deluxe version via chat.
- An accuracy guarantee that will pay interest and penalties assessed by the IRS due to a calculation error in their software.
- Free audit assistance with the Deluxe version. It includes access to audit specialists to answer your questions.
- Cheaper than average state returns.
TaxAct
TaxAct is known more for its low prices than anything else, but it also has a good interface and is good at helping you find deductions to save money. TaxAct’s process isn’t quite as guided and foolproof as TurboTax. But if you know which income and deductions you’re going to file, it’s easy to use. TaxAct offers:
- Direct deposit returns to an American Express Serve Free Reloads Prepaid Debit Account, which gives you easy access to your tax return money.
- A Maximum Refund Pledge similar to the one offered by H&R Block.
- Helpful popups to guide you if you’re confused about a form or what information you need to put into that form.
- TaxAct inspects returns for incomplete information, errors, and additional savings opportunities.
TaxSlayer
This is another lower-cost tax preparation software that may interest you, especially if you know a bit about filing your taxes already. As with most of these other services, TaxSlayer comes with free email and phone support to make sure you get all your questions answered while filing your taxes. It is also available for use on your desktop or mobile device. TaxSlayer offers:
- Another refund guarantee, which is similar to those offered by TaxAct and H&R Block. The money-back guarantee is a little less robust than H&R Block’s though, as it will only refund the cost you paid for the software, not a free adjustment to claim the rest of your deduction.
- Free email and phone support if you have technical problems with the software.
- Error-checking software that lets you ensure your taxes are correct before you e-file them.
- Access to the Classic edition of TaxSlayer for free for military members and active-duty military families.
eSmart Tax
One of the lesser-known online tax filers is eSmart Tax. Don’t be fooled if you haven’t heard of them before, though: eSmart Tax is an extension of Liberty Tax, which has been a trusted name for over 20 years. You won’t find any sign-twirlers in Statue of Liberty costumes with eSmart Tax, though; the online-only company is more focused on offering affordable, simple tax returns on an easy-to-use platform. While this software is, on average, more expensive than other e-filing companies, it might be a great option if you want a guaranteed return through a company that’s backed by decades of experience (and over 4,000 brick-and-mortar locations). At eSmart Tax, you’ll get:
- Biggest Refund Guarantee: If you get a bigger refund through another filing company, eSmart Tax will eat the filing fees.
- 100% Accuracy Guarantee: If one of their calculations is incorrect and results in penalties and/or interest fees, eSmart Tax will pay for it.
- Federal and State tax filing, as well as access to ACA forms.
- Free online chat and tech support for all, regardless of package tier (in the past, this was only available to their paid customers).
- Access to prior year’s returns and W-2 downloads.
- Preparation for non-residents and partial year state returns available with the free version.
- Paid versions offer access to a variety of forms, including those for self-employed, sole proprietors, investors, landlords, and more.
e-File
This quick tax filing service definitely focuses on those with simpler-to-file taxes, but it also offers support for those with more complex tax situations. Its user interface is simple, and doesn’t include as much additional information as some of the above software options. But it does let you get your taxes filed quickly, and offers access to live support when you need it. e-File offers:
- Live chat support, even during peak hours. This can help you out in a pinch if you aren’t sure what to do next when filing your taxes.
- Electronic and mail filing options.
- A quick refund option that gets you access to your money fast when you file online.
Which Tax Software Is Best?
If your tax filing situation is relatively basic, any of these software options could work for you–especially the free versions. However, some have features that might win out over competitors, including:- TurboTax’s superior guide: TurboTax is known as one of the most user-friendly options on the market, as it will guide you through every step of the process so you don’t miss anything. It also bookmarks where you leave off if you file your taxes in several sessions, so again, you don’t miss any major pieces.
- H&R Block’s refund bonus: If you’re already a big-time consumer at the retailer partners from H&R Block, you could get some serious extra cash from your return by using this software to file.
- TaxAct and eSmart’s balance of pricing and guidance: TaxAct seems to offer more guidance than the other cheaper options on the market, so if you’re willing to pay slightly more for this extra guidance, it’s a great option. eSmart also provides loads of resources, a free chat function, and you can get help at a Liberty Tax branch office.
- FreeTaxUSA’s and e-File’s pricing: These are definitely the cheapest options on the market. Check each one for the tax forms you need before you decide which super-cheap option to choose.
| Software | Federal eFile Cost | Best For |
| TurboTax | $0 to $179.99 | Those who want extra guidance and advice while filing, along with an easy-to-use interface. |
| H&R Block | $0 to $49.99 | Those at a higher risk of being audited, since they offer free in-person audit support. |
| TaxAct | $0 to $49.95 | Those who want to save money but still need some guidance on taxes. |
| Tax Slayer | $0 to $57 | Those who are confident in filing their taxes and want to save as much as possible. |
| FreeTaxUSA | $0 to $6.99 | Those who want to save money when filing taxes more than anything else. |
| eSmart Tax | $0 to $54.95 | Those who want to save but also have the security and backing of a trusted company. |
| e-File | $0 to $34.95 | Those who have more complex tax situations but still want to save money. |
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