Who has the cheapest tax software, including free versions–TurboTax, TaxACT, or H&R Block? We have the answers in this side-by-side comparison.
There are three major tax preparation software packages on the market that most do-it-yourself tax preparers will use–TurboTax, TaxACT, and H&R Block. Comparing these three options to find the cheapest can be a real chore. Each has several editions with varying features. As a result, it is important to compare competing editions between the providers, not just to look simply at the lowest overall price that any seem to be offering.
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.
To help you sort through this mess, let’s take a look at the offerings of all three 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 cost for the downloadable versions is listed at the end of the article.
TurboTax is highly regarded in the self-prepared income tax universe, and it is the most popular tax software. But it has five different editions, and you have to choose the right one for your tax situation. Otherwise, you’ll need to upgrade.
Here are summaries of all five editions:
This version is for the simplest 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, except for the Earned Income Credit. It does, however, 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 edition is specifically designed to maximize those deductions. The cost is $39.99, and the e-file is free. There is an additional charge of $36.99 for state returns (per state). So if you have to file in your state, you’re really looking at $76.98 – 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 sale of investment securities, automatic calculation of cost basis for investments sold, and preparation of Schedule E for rental properties. If you maintained rental properties or bought and sold taxable investments in 2017, you’ll need to spring for this upgrade to the Deluxe version. The cost is $59.99 and includes free e-file.
It has the same additional charge for preparation of your state return(s), at $36.99 per state. Plan that you’ll have to come up with $96.98 for this edition if you have to file in your state. Check out the TurboTax Premier Edition here.
This edition does everything that the Premier edition does, but it also adds preparation of Schedule C (sole proprietors). It maximizes business tax deductions and depreciation, and also reports income and expenses from S-Corporations, C-Corporations, partnerships, and multi-member LLCs (but not the actual returns for each). 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 for 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 $36.99, bringing the actual cost to $126.98. Check out the Self-Employed Edition here.
This is a brand new service from TurboTax for this year. 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 costs $149.99, plus the additional $36.99 for one state filing. So that’s a total of $186.99. But 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.
This option lets you file all the forms that are included with the Self-Employed version of TurboTax, so basically all of the forms. But it also lets you 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.
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. Last year, they streamlined their offerings. And this year, they added an interesting new one: the Freelancer edition.
Last year, TaxAct charged extra to file a state tax return. But they’ve upped their game this year 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. As with TurboTax, this free version works only with the 1040EZ and 1040A tax returns. As of December 11, 2017, it’s unclear from TaxAct’s website whether or not this version supports filing for the Earned Income Tax Credit.
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.
As with TurboTax’s Deluxe version, this is the most popular option for TaxAct users, primarily because it covers the needs of most American taxpayers. In fact, it folds in more features than TurboTax’s popular version, as it also gives you access to Schedule D, where you can report stocks and other investments, and Schedule E, where you report income and expenses related to rental properties. This version also offers a Donation Assistant to help you maximize your charitable donations. This version costs $25, plus $37 for state taxes, for a total of $62. Importing last year’s tax information is free with this version and up.
Interestingly, TaxAct has put together this freelancer version, as more Americans have become freelancers or have side gigs. It’s much cheaper than TurboTax’s Self-Employed version, at just $39 (plus $37 for state taxes). However, it also offers a service tailored for freelancers, who generally report using Schedule C rather than the more complicated income and expense reports for C-Corporations and other more complicated businesses. When you use this version for state and federal taxes, your total will be $76.
From TaxAct’s list of available forms, you don’t get a whole lot more when you upgrade to the Premium version. It’ll still work for freelancers and many small business owners. The primary difference in this $51 version is that you get Audit Defense protection included. With the other versions, Audit Defense costs an additional $39. So it’s much cheaper to just spring for the Premium TaxAct option to begin with, and then you get your audit services built in. This also costs another $37 for state taxes, so that total comes to $88. That’s like adding Audit Defense to the Freelancer version for only $12.
H&R Block has four editions, and you have to choose the one that most closely matches your tax profile.
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 includes support for certain deductions, including the Earned Income Tax Credit, childcare expenses, student loan interest, mortgage interest, and even some cash and noncash donations. Because of this, it’s a more robust option than the other two free programs.
- For a limited time, filers will earn 20% off all Federal file options!
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 $34.99, plus $36.99 per filed state, for a total of $71.98 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 popular 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 $54.99 for federal taxes, plus $36.99 per state. So the total here is $91.98, 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 $74.99, this service for self-employed people is cheaper than TurboTax’s. Overall, you’d pay $111.98 for the service overall if you only filed for one state.
There’s a newbie to the free online tax filing game as of last year, in the form of an already-popular credit checking company: Credit Karma. Their new program, called Credit Karma Tax, is guaranteed to be completely free for almost all filers. Even freelancers could file their taxes for free, as this year’s list of supported forms includes Schedule C for sole proprietors. You can check out our review of Credit Karma Tax here, which was brand new for 2017 (tax year 2016).
All three vendors above have very similar editions available based on your tax situation. There is a wide variation in what each charges for their plans. TurboTax is definitely the highest priced, while TaxACT is clearly the lowest. And H&R Block rests comfortably in the middle. It may come down to which program you have used in the past and are the most comfortable working with.
Here is a summary of the costs based on various tax situations:
|Returns with Itemized Deductions|
(Federal + 1 State)
|Returns with Investments|
(Federal + 1 State)
|Returns for Real Estate Investors|
(Federal + 1 State)
|Returns with Self-Employed or Small Business Income|
(Federal + 1 State)
|Go to TurboTax||Go to H&R Block||Go to TaxACT|
For those that don’t want to prepare their taxes online, downloadable versions of the tax software are available:
- TurboTax: $39.99 to $109.99
- TaxACT: Up to $76
- H&R Block: $29.95 to $89.95 plus the cost of state returns and state e-file