With 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 seven best tax software programs to help you find your perfect fit.
According to recent IRS statistics, as many as 94.3% of taxpayers used a digital platform to e-file their 2020 income taxes last year. Not only has this made tax filing easier for many taxpayers, but also more affordable.
In fact, filing taxes can be entirely free for those who earn $73,000 and below thanks to Free File, an alliance between the IRS and certain tax preparation software companies. For everyone else, tax return software programs can save both time and money whether you need to file federal and/or state income tax returns.
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, whether you’re filing a basic return as an individual or are married with dependents and investment income.
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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.
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, 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.
Best Tax Software: Overview
Below is a basic rundown of our thoughts on which software may be best suited for you.
|Software||Federal eFile Cost||Best For|
|TurboTax||$0 to $119||Those who want extra guidance and advice while filing, along with an easy-to-use interface.|
|H&R Block||$0 to $109.99||Those at a higher risk of being audited, since they offer free in-person audit support.|
|TaxAct||$0 to $79.95||Those who want to save money but still need some guidance on taxes.|
|TaxSlayer||$0 to $54.99||Those who are confident in filing their taxes and want to save as much as possible.|
|FreeTaxUSA||$0||Those who want to save money when filing taxes more than anything else.|
|eSmart Tax||$74.95||Those who want to save but also have the security and backing of a trusted company.|
|e-File||$0 to $35.00||Those who have more complex tax situations but still want to save money.|
Note: All pricing is up to date as of March 14, 2022.
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.
- A 24/7 helpline 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.
- Explain Why 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 upfront, which would then give you access to a professional who would take care of most of the proceedings in case of an audit.
The TurboTax Deluxe costs as little as $0 to file (state at an additional fee).
Free version is for simple tax returns only. Not all taxpayers qualify.
Read More: TurboTax Review
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, 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 Blocks 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.
- 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.
- Offers up to $3,500 with a Refund Advance Loan by applying for a 0% interest, no free loan when you file starting January 4, 2021.
The H&R Block Deluxe costs $49.99.
Read More: H&R Block Review
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 software doesn’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.
- Free customer support via email, or if you pay for the deluxe version via chat.
- Support for most tax forms, even with the free basic version.
- 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.
The FreeTaxUSA Deluxe Edition costs $0: filing state taxes is $14.99.
Read More: FreeTaxUSA Review
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.
- 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.
The TaxAct Deluxe costs $44.95.
Read More: TaxAct review
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.
- 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 Blocks 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.
The TaxSlayer.com Federal Premium File costs $44.95.
Read More: TaxSlayer Review
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.
- Access to a variety of forms, including those for self-employed, sole proprietors, investors, landlords, and more.
The deluxe version is now $55.95.
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.
- 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.
The e-File Deluxe Version costs $20.99.
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 Blocks Amazon refund bonus: If you’re already a big-time Amazon consumer, 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.
There’s quite a bit to consider when deciding which tax software to use, especially if you’ve never used software to file your own taxes before.
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 $119||$0 to $109.99||$0||$0 to $79.95||$0 to $54.99||$74.95||$0 to $34.49|
|State e-File Cost||$49||$44.99||$14.99||$54.95||$39.95||$36.95||$22.49 for unlimited state tax returns|
|Free File Qualifications||Simple returns||Income under $73,000 and simple filing situations||Income under $73,000 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|
|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|
|Saves Filed Taxes Online||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
Again, if you’re a DIY tax pro – meaning you’ve successfully filed your own taxes before and don’t mind the process – any of these software choices are worth considering. If you’re new to the DIY route, investing in an option that is user-friendly and offers solid customer support and guidance is probably your best bet.
What Are Tax Software Programs?
Tax software programs are essentially online, automated tax-preparation applications. They’re designed to accommodate income tax situations up to the assigned limit of each respective plan. Assuming you choose the right plan, the software will perform a question-and-answer feature, in which questions relating to your tax situation will be requested by the software, which you will then be required to provide the necessary information.
In a best-of-all-world’s scenario, a simple return can be completed in as little as a few minutes, while a more complicated one may be done within no more than two hours.
The major advantage of tax software programs is the ability to prepare your own income tax returns—both federal and state – without paying the higher cost of a live tax preparer.
Related: Best Free Tax Software
What to Look For When Choosing Tax Software
Never look simply at the cost of tax software. Yes, price matters, but what’s equally important is the ability of the specific software to accommodate your personal tax situation.
For example, the lower-cost plans and providers are generally designed for people with relatively simple tax situations. That may include W-2 income, interest and dividends, a relatively modest amount of capital gains, itemized deductions, and deductions and credits specific to dependent children. Virtually any medium-level tax software should be able to accommodate this tax profile.
But if you are an investor who trades frequently, or engages in more complicated investment ventures, or if you’re self-employed or own rental property, you’ll need to look at the more advanced software.
As a general rule, TurboTax and H&R Block are best suited to complex tax situations. This is not only because they have the ability to accommodate more tax profiles, but also because they are very strong on support. This can extend to preparing your income taxes directly should you decide the job is beyond your time or knowledge constraints, as well as offering comprehensive defense in the event of an audit.
Finally, in choosing the right tax software for you, carefully evaluate your own understanding of federal income taxes. Most tax software is highly user-friendly and can help you prepare your return. Even if you have no previous experience with tax preparation, it is important to know your limits. If there are any aspects of your tax situation that you do not understand, or if your situation is particularly complicated, you may be better served by working directly with a paid tax preparer, including a certified public accountant (CPA) if necessary.
While tax software is designed for the majority of people, it won’t be the right solution for everyone.
What Is the Cost of Tax Software?
Based on the pricing information we have obtained for this review from the seven tax software programs included, the cost can range from $0 to $119.
However, this doesn’t mean a free or low-cost tax software will be the best choice for you. Higher-priced software covers a much wider variety of tax situations. For example, the highest-priced plans will cover situations like self-employment and rental real estate. In some cases, the final cost may be higher than the stated cost, which is only a base price. In the case of both TurboTax and H&R Block, you’ll have the option to turn the tax-preparation job over to professional tax preparers for an additional fee. You may also pay extra for a specific audit defense package.
Cost is always an important factor in evaluating tax software, but only to the degree that the software in question will adequately enable you to prepare your own returns.
How We Chose the Best Tax Software Programs
In adding each of the seven tax software plans to this list, we considered a mix of both cost and program features. Since both factors vary with the software plans themselves as well as the needs of individual taxpayers, we have included a variety of plans that will accommodate the great majority of tax situations.
Most tax software programs are good when it comes to the basics. But if it is a basic type of software, we have included it only if it’s on the lower end of the cost range.
More advanced software – carrying a higher price – is also included, since those programs will be absolutely necessary for taxpayers with more complex situations.
Related: Best Tax Software for Investors
I've never prepared my own taxes before - how can I know if I'll be able to do it using a tax software program?
Fortunately, most tax software programs are incredibly easy to use. Even if you know nothing about preparing your taxes, the question-and-answer format most use will make the process a breeze. The software will ask you a series of questions, you’ll provide the answers, and all necessary tax forms will be completed. That said, if your tax return is particularly complicated – or you simply don’t feel comfortable with the whole tax-preparation process – you may need to continue using the services of a paid preparer. It will cost you more, but nothing is more important than peace of mind, especially when it comes to your income taxes.
How much money can I save using a tax software program, compared with a paid preparer?
As you can see from our list above, you can get tax software ranging in price from a low of free to a high of just over $100. If you use a paid preparer, you’re probably paying something like $300 for a simple tax return. A moderately complicated return may be in the range of $500 to $800, and a very complicated one can easily run over $1,000. It’ll take some time on your part even with the tax software. But you’ll be able to save hundreds of dollars by finding software you’re comfortable with and going the do-it-yourself route.
How complicated is it to switch from one tax software program to another?
It’s usually not a problem at all. Many tax software programs enable you to import previous year’s tax returns from other programs. Just make certain the tax software you’re planning to switch to has that option. The features table we’ve included in this article will tell you which ones have that capability. If they do, you can import the information in a matter of minutes and be on your way with the new software.
Is tax software for everyone?
The absolutely honest answer is no. If you own a business and have employees, own multiple rental real estate properties, have a significant number of investment transactions, or are a participant in several partnerships, you’ll be better served by using a paid professional. The same will be true if you regularly need to file tax returns in multiple states. This is possible if you earn income, either from investment interests in multiple states, or if you physically transact business in those states. It’s not that the premium tax software programs can’t accommodate those kinds of tax situations, but more that the information requirements are such that they’re better handled by a trained tax professional.
The sophistication of tax software programs is increasing with each year. Tax software can now do nearly all the functions of a live tax preparer and do it for a lot less money. Even if you’ve never prepared your own taxes before, you’ll almost certainly be able to do the job now using the right tax software.
You don’t need to know anything about taxes, the software can walk you through the whole process. You won’t even need to check your numbers – the software can also do that for you. And if you’re missing any information, the software can let you know.
If you’re tired of paying a live tax preparer to do your taxes, let this year be the one you start doing the job yourself. Do it once and you’ll find out just how easy it is. And once you do, you may never go back to a live tax preparer again.