What is vitally important in selecting the least expensive tax software is making sure that you get the right one based on your own individual income tax situation. Each of these providers has a very attractive free package. But these options won’t cover more than the most basic tax situations, so be sure you know what you need as you shop around.
Bottom line: Unless you have a very basic tax situation, you’ll likely have to pay something for your tax return software. But just how much you pay will depend on the service you choose and your individual tax situation.Deal of the Day: Credit Karma Tax offers 100% free Federal and State tax filing with a Maximum Refund Guarantee and Audit Defense. Never pay a penny to file your income taxes. Read the Full Review Here
To help you sort through this mess, let’s take a look at the offerings of all five companies, as well as the individual editions, and the charges related to each. Note that the costs listed below are for the online versions of each tax software. The price for the downloadable versions is listed at the end of the article.
Prices are current as of February 5th, 2019.
The Best Free Tax Software
|Brand||Best For||Learn More|
|Credit Karma Tax||All Individual Filers||Visit CK Tax|
|TurboTax||Overall Features||Visit TurboTax|
|H&R Block||Free Filers||Visit H&R Block|
|eSmart Tax||Free and Simple Returns||Visit eSmart Tax|
Credit Karma Tax is a fairly new service offered by Credit Karma and they’ve certainly made a splash. Their tax filing service is straightforward and I think I can sum it up in two simple statements.
- Filing your Federal Tax return is always FREE
- Filing your State Tax return is always FREE
Whether you’re filing as someone with just a single W-2, or you’re self employed in need of a Schedule C and itemized deductions, Credit Karma Tax has you covered. Their system is not designed to charge you for anything, so there’s no bait and switch. Either your file for free from start to finish, or you choose somewhere else to file your taxes.
Credit Karma Tax offers two guarantees when you file your taxes using their platform.
Maximum Refund Guarantee
Credit Karma Tax is quite positive you’ll earn the maximum refund using their service so they’re putting the cash up. If you file your taxes through Credit Karma, then file an amended return later in the year using the same information; and the refund is higher the second time around, Credit Karma will give you up to $100. The $100 comes in the form of a gift card. (Minimum difference must be $25).
All you need to do to receive the gift card is provide Credit Karma Tax your amended return, show it was accepted, and show that your refund amount was larger. Not only will you receive the larger refund, you’ll also get the gift card from Credit Karma Tax!
If Credit Karma Tax makes an oopsie when you file your tax return, they’re prepared to offer Audit Defense and help you fix the problem. And should you be charged a penalty or interest as a result of an incorrect return (an error on CK Tax’s part), CK Tax will refund you up to $1,000 in the form of a gift card for their error.
TurboTax is highly regarded in the self-prepared income tax universe, and it is the most popular tax software. But it has four different editions (five if you include Live), and you have to choose the right one for your tax situation. Otherwise, you’ll need to upgrade.
This version is for the most straightforward tax returns, but it costs nothing to file either your federal or your state tax return. It only works with forms 1040A, 1040EZ, Schedule B, and Schedule EIC. It’s ideal for those with simple tax situations that don’t involve many deductions. It does cover the Child and Dependent Care credit and child tax credit so even parents can use this version.
As with the other versions of TurboTax, this one will let you upload a photo of your W-2, which can make the process of filing your taxes a snap. And you can file from your internet browser or through TurboTax’s mobile app.
This is TurboTax’s most popular edition, and it provides most of the services the product is known for. It is recommended if you have tax deductions, as the version is specifically designed to maximize those deductions. The cost is $39.99, and the e-file is free. There is an additional charge of $39.99 for state returns (per state). So if you have to file in your state, you’re really looking at $79.98–and that’s assuming you don’t have to file for more than one state.
Deluxe is the most popular option because it fits most taxpayers’ situations. It lets you maximize mortgage and property tax deductions, and allows you to deduct charitable donations. As with other TurboTax options, this one will also allow you to find new deductions you hadn’t thought of, and it’ll tell you whether you should take the standard deduction or itemize your taxes.
This is the TurboTax edition you will need if you have taxable investments or rental property. It does everything the Deluxe version does, but it adds the sale of investment securities (including stocks, bonds, ESPPs, and other investments), automatic calculation of cost basis for investments sold, automatic import of investment income, and preparation of Schedule E for rental properties.
If you maintained rental properties or bought and sold taxable investments in 2018, you’ll need to spring for this upgrade to the Deluxe version, as it will cover rental property income and tax deductions. New for tax year 2018 is the ability to account for gains and losses from cryptocurrency transactions accurately. The cost is $59.99 and includes free e-file.
It has the same additional charge for preparation of your state return(s), at $39.99 per state. Prepare to come up with $99.98 for this edition if you have to file in your state.
This edition does everything that the Premier edition does, but it also adds preparation of Schedule C (sole proprietors). It gives guidance for contractors, freelancers, and small business owners and maximizes business tax deductions and depreciation. This version also reports income and expenses from S-Corporations, C-Corporations, partnerships, and multi-member LLCs (but not the actual returns for each).
You’ll find industry-specific deductions for more tax breaks, get one-on-one help from self-employment specialists, and even get free expense, mileage, and job tracking with QuickBooks Self-Employed.
Bottom line, if you’re a sole proprietor running a business with streamlined income and expenses, you can probably file your own taxes with Self-Employed. The cost of this edition is $89.99 including free e-file. And once again, many of you will have to add in the per-state charge of $39.99, bringing the actual cost to $129.98.
This is a newer service from TurboTax. It basically gives you the advantages of having your own CPA or EA give you advice on your taxes while minimizing those costs for most people. It features the same plans as the traditional TurboTax options, but with the added benefit of having a CPA or EA. Here are the costs per plan:
- Basic – $49.99 (State is $29.99 per state)
- Deluxe – $89.99 (State is $39.99 per state)
- Premier – $139.99 (State is $39.99 per state)
- Self-Employed – $169.99 (State is $39.99 per state)
If you have a more complicated tax situation or just need the assurance of having someone look over your taxes with you, this could be a good investment. TurboTax Live allows you to connect to a CPA or EA on your computer screen whenever you like during the process. In short, you still fill in all of the information. But you can get live advice from an actual person who is familiar with federal and state tax laws.
Read More: TurboTax Full Review
TaxACT works much the same way as TurboTax, in that it has multiple editions. In the past, it had a confusing array of editions and bundles. Recently, they streamlined their offerings, and now have five different plans to choose from.
A couple of years ago, TaxACT decided to charge extra to file a state tax return. But they’ve upped their game to compete with TurboTax. Now, the free version is truly free as long as you can get by with the limited forms that TaxACT makes available.
According to their website, you will “pay absolutely nothing to prepare, print and e-file your simple federal return. You get everything you need and nothing you don’t so you can file your 1040 return quickly and easily.” As with TurboTax, this free version works only with the 1040EZ and 1040A tax returns. The only thing you’ll pay for with the Free version is to import last year’s tax return, which makes filing simpler. This costs $15.
The Basic+ package costs $7.96 and is designed for those with bills from college tuition, dependents, or retirement income. It works best for people filing a 1040A. You’ll need to pay additional for state filing, which is $15.96 per state.
Deluxe+ costs $23.96 (state is an additional $31.96 per state) and is designed for those who own a home–so you can take advantage of those tax credits. You’ll get all the features from the Free and Basic+ packages as well. You’ll get all of the deductions and credits you qualify for regarding child and dependent care expenses and/or education credits. You’ll also have access to Schedule A for all itemized deductions.
The Premier+ package costs $27.96 (state is an additional $31.96 per state) and is geared toward those who have investments, investment income, and rental properties. You’ll receive everything in the Free, Basic+, and Deluxe+ packages, too.
You can easily import investment data or use a tool they developed to enter it quicker and save time and get a more accurate input. This package includes an expert review, where you can get a one-on-one discussion with an independent tax expert for a detailed analysis of your return. This way you can optimize for next year’s tax-related outcomes.
You also receive prioritized support with this package. This includes an in-app chat function, a dedicated phone number, and a screen-sharing service if you need additional help and want to show someone what you’re looking at.
The Self Employed+ package costs $39.96 (state is an additional $31.96 per state) and is made for small business owners and freelancers. In addition to getting what the other packages offer, they have something called the Deduction Maximizer™, which TaxACT claims will get “every freelance deduction you deserve with a simple tool designed specifically for self-employed filers.” You will be able to plan for the entire year with some of their tax planning business tools, and you’ll also receive the same dedicated support the Premier+ package gets.
Read More: TaxACT Full Review
H&R Block has four editions, and you have to choose the one that most closely matches your tax profile.
Free Online Tax Filing
This program recently upgraded to offer free state taxes, as well as federal taxes, this year. It’s very similar to the other free versions listed here. It includes some slick features, like the ability to take a picture of your W-2 to streamline filing.
It provides support for certain deductions, including the Earned Income Tax Credit, childcare expenses, student loan interest, mortgage interest, and even some cash and non-cash donations. Because of this, it’s a more robust option than the other two free programs.
Deluxe Online Tax Filing
Deluxe will store your returns or pull data from prior years’ returns if you’d like. It offers a deduction tool to make sure you’re making the most of your deductions, most of which are available to users of this version. Additional tax situations that are supported here include Health Savings Accounts, unreported tips, and hobby income. This version costs $22.49, plus $36.99 per filed state, for a total of $59.48 if you file for only one state.
Premium Online Tax Filing
Premium will soon make tax filing easier by letting you import expenses from some favorite expense-tracking apps. This version is ideal for freelancers whose income and expenses can all be reported on Schedule C-EZ. If you own rental properties or need to report investment income, this is the version of H&R Block you’ll need. It runs $37.49 for federal taxes, plus $36.99 per state. So the total here is $75.48 if you’re filing for only one state.
Self-Employed Online Tax Filing
Self-employed individuals with a slightly more complicated tax situation will need this option. It lets you fill out the full Schedule C. It also automatically imports driver tax information from Uber, which is great if that’s been your side gig this year. At $59.99, this service for self-employed people is cheaper than TurboTax’s. Overall, you’d pay $96.98 for the service if you only filed for one state.
One of the lesser-known players in the game, eSmart Tax seeks to make tax time affordable and easy. The company is owned by Liberty Tax, so there are some well-seasoned pros behind the eSmart Tax name, too. Plus, filing through their online company is likely to be more affordable than visiting a Liberty Tax location in person!
Free Online Tax Filing
If you have a simple tax return, their free version can be an easy way to file quickly and accurately. However, if your return extends beyond a Form 1040 and Schedule B, you’ll need to upgrade to a paid version of the eSmart software.
With the free edition, you’ll be able to import your previous year’s tax info, download W-2s, access ACA forms, add child and dependent care expenses, and prepare your state tax return. Free chat and tech support are available, too (in the past, eSmart Tax only offered support to paid users).
Basic Online Tax Filing
Need to itemize deductions? Then you’ll need to upgrade to at least the Basic version of eSmart Tax’s software, at $34.95. With this version, you can also file your HSA, business expenses, depreciation, and self-employment income.
If you plan to file a Schedule A or Form 8853, this version will work for you.
Deluxe Online Tax Filing
If you’re a sole proprietor or have home office deductions that you’d like to file, you’ll need to upgrade to the next tier: the Deluxe level. This version costs $45.95 and includes everything that the Basic tier does, along with supporting a Schedule C.
Need to file Forms 4562, 8829, 4136, or 8839? Then you’ll need version Deluxe or greater.
Premium Online Tax Filing
At $59.95, this is the highest tier of filing software offered by eSmart Tax. However, if you need to file less-common forms–such as those pertaining to the sale of a home; income from a rental property or real estate; gains, profit and loss; or if you have an S-Corp–you’ll need the Premium version.
This version supports all of the forms listed previous, as well as Schedules E, F, and K-1. You’ll also be able to file Forms 4684 and 4835, if needed.
Of our top picks, all five vendors above have very similar editions available based on your tax situation. There is a wide variation in what each charge for their plans. TurboTax is the highest priced, while Credit Karma is clearly the lowest. The next cheapest alternative is TaxAct with H&R Block and eSmart resting comfortably in the middle. It may come down to which program you have used in the past and are the most comfortable working with.
For those that don’t want to prepare their taxes online, downloadable versions of the tax software are available: