With so many DIY tax filing options, how do you choose? We compare the five best tax software programs to evaluate cost, features and ease of use.
More than 27 million taxpayers used computer software to e-file their taxes from home in 2014. 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 2015 income was below $62,000 in 2015, you can use Free File software to quickly, 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 the top five tax preparation software companies – TurboTax, H&R Block, TaxAct, Tax Slayer, and Jackson Hewitt. 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 handholding you’ll need to safely get through filing your taxes.
How to Choose Your Tax Software
With so many great options on the market, how do you choose? 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 and a simple retirement plan who’s 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 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.
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. So we’ll start with a basic rundown of what each software has to offer, then wrap up with a comparison table to make all of this information easy to understand.
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 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. With certain companies, just your personal and employer information is 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.
- 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.
The Turbo Tax Federal Deluxe File costs $39.99
H&R Block is a very trustworthy name if you want to go and have your taxes done in person, but its software is also a good option. It’s not quite as intuitive or informative an interface as TurboTax offers, but it’s still easy to use.
H&R Block offers:
- It’s 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 5-10% on top of your return amount when you choose gift cards from particular retailers.
- 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.
- 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.
The H&R Block Federal Deluxe File costs $27.99
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 Federal Plus File costs $25
This is anther 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.
- 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 or tax-related questions.
- Error-checking software that lets you ensure your taxes are correct before you e-file them.
- A military discount of 50% for any current military members.
The TaxSlayer.com Federal Premium File costs $34.99
Like H&R Block, Jackson Hewitt was first known as an in-person tax preparation business. Now, it runs a competitive online DIY tax preparation software, as well. Jackson Hewitt offers all the basics, walks you through filing your taxes, and comes in different levels depending on the forms you need.
Jackson Hewitt offers:
- Help Me Decide guides help you make some basic decisions when you’re first starting out. This is great if you’ve never filed your own taxes before and aren’t sure of some essentials – like whether or not you can claim a dependent or which filing status to use.
- Occupation-specific deduction discovery, which gives you access to deductions you might not even know you qualify for based on your occupation.
- In-person support at a local Jackson Hewitt location. If you get stuck during the process, you can actually meet with a representative face-to-face to get answers, which is great for many individuals.
The Jackson Hewitt Deluxe File is not yet available 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’s pricing: For those who are fairly comfortable with the tax filing process, you could save quite a bit of money by using TaxAct over these more expensive options.
- Jackson Hewitt’s in-person support: Filing taxes on your own for the first time? You might be more comfortable with the process knowing you can get in-person support from a local Jackson Hewitt office, should you need it.
In case you’re still unsure of which tax preparation software would work best for you, this table includes everything you need to know about the features included with each software option:
|Federal e-File Cost||$0 to $79.99||$0 to $49.99||$0 to $19.99||$0 to $34.99||$0 to $49.95|
|State e-File Cost||$27.99 to $36.99||$27.99 to $36.99||$0 to $14.99||$14.99 to $23.99||$0 to $36.95|
|Free File Qualifications||Made less than $100,000; don't own a home or rental property; didn't sell investments; don't own a business or have 1099 income; don't have major medical expenses||First-time tax filers||Taxable income of less than $100,000 with a simple filing situation involving the below forms||Able to file using 1040EZ||Simple tax situation with under $1,500 of unemployment or interest income|
|Forms Available on Free Edition||1040A, 1040EZ, Schedule B, Schedule EIC|
(Full List Here)
|1040, 1040A, 1040EZ, 1098, 1099, Schedules A, C, C-EZ, D, EIC, SE, 8812|
1040A, 1040EZ, 1095-A, Schedue B, Schedule EIC, Child Tax Credit, and more
|1040EZ||List Not Available|
|Getting Your Refund||Direct Deposit, Check, NetSpend Premier Visa Prepaid Card||Direct Deposit, Check, Retailer Gift Card (with 5-10% bonus)||Direct Deposit, Check, American Express Serve Debit Account||Direct Deposit, Check||Direct Deposit, Check|
|Help Options||Community Forums, Online, Phone||Real-Time Chat, Phone||Online Tutorials, Phone, Chat, Email||Email, Phone||In Person, Email, Phone|
|Prior-Year Returns Imported||Yes||Yes||Yes||Yes||Yes|
|Automatic Import||Yes, with W-2 snap to auto-import W-2 info. from picture||Yes||Yes||No||Yes|
|Audit Support||Yes (Limited free support and in-person paid support)||Yes||Yes||No||No|
|Saves Filed Taxes Online||Yes||Yes||Yes||No||No|
|Website||TurboTax||H&R Block||TaxAct||Tax Slayer||Jackson Hewitt|