TurboTax is arguably the name in personal tax preparation software, and its developer — Intuit — charges accordingly. You’ll pay top-dollar for this one, but users and experts alike seem to think it’s worth it. It scores kudos in almost every category, from user experience to being able to import many employer tax IDs. You can take pictures of your W-2s and 1099 forms rather than type in all the information they include, risking typos and mistakes. There’s an “Expense Finder” feature if you’re self-employed and must file Schedule C. It can lift potentially tax-deductible expenditures directly from your bank account and categorize them, add them up and input them accordingly.
The software engages you much as a professional would with questions and guidance, although some pop-up messages can be a bit chirpy and possibly jarring when you’re concentrating. Think comments like “You’re doing great!” interspersed with questions designed to dig your tax data out of you.
If you get confused or otherwise hit a brick wall, TurboTax offers experts to chat with if you use the online version. It also has a “SmartLook” feature that will put you face-to-face with a tax expert, and it offers audit support.
So how much will all this cost you? If your tax situation is extremely simple and you’re just filing Form 1040EZ or Form 1040A, you can use the TurboTax Absolute Zero version for free. But each time you need to do something that falls outside the “extremely simple” range, you’ll be asked to pay for it. If you want to itemize, you’ll have to purchase the Deluxe version. If you own anything in the way of investments, you’ll pay more, as well as if you’re self-employed. State returns are extra except with the free version.
H&R Block Premium does just about everything that TurboTax does at a slightly less cost. So why does it drop to second place? It’s mostly a matter of opinion. Reviewers and users tend to clap for TurboTax first, but it’s a very close race.
H&R Block is chatty and friendly, too, asking questions and deciphering your answers as you prepare your tax return. But H&R Block isn’t always as efficient at deciphering your answers. You might hit that brick wall more often, but you can either dig for informational answers in the Help window or solicit unlimited live professional tax advice through the website.
You can pay extra to have an expert review your finished return for an added measure of confidence before you file or just back up your file and head off to one of the thousands of H&R Block offices in the U.S. if you really run into problems. You can then sit down with a professional for free if you’ve purchased the software. When it comes to this sort of handholding, H&R Block is said to be the best.
H&R Block also has a free version called More Zero and it’s more accepting than TurboTax’s freebie of slightly complicated tax situations. The Premium version is less than $100 with all its bells and whistles. One state return is included.
TaxAct is often mentioned in the same breath with TurboTax and H&R Block, but it has something going for it that those two competitors don’t share: It’s really inexpensive. Better yet, it offers a price lock guarantee. You can begin your return early in the year with most software, but TurboTax and H&R Block will begin ratcheting up their costs as you get closer to the tax deadline without actually filing. You can expect this to start happening sometime in March. Not so with TaxAct. You’ll pay the same no matter how long it takes you to finish your return and file.
TaxAct offers fewer bells and whistles, but it is equipped to handle returns that include self-employment and investment income. It also has a nice feature called Life Events, which zeros in on potential changes in your tax situation from last year to this one. The web-based program offers 19 icons relating to situations that might currently apply to you. Maybe you bought a home or you got married or had a baby. Maybe you lost your job. Whatever happened, you can click on the corresponding link for extra tips, information and guidance, although the program won’t incorporate the information into your tax return for you. That part is up to you.
TaxAct offers live customer support, as well as hyperlinked words and phrases that provide explanations and more information. It also has an extremely comprehensive TaxTutor Guidance Center. That said, TaxAct isn’t incredibly efficient with state returns and the interface isn’t as visually pleasing, but you get what you pay for.
TaxAct used to be known as Personal TaxEdge and it was free, but these days the Online Premium edition will cost less than $50. A free version is still available for 1040EZ and 1040A filers. You won’t constantly be asked to pay a little for this step of the tax process or that one, called “upsells” in the industry, although it might happen once or twice. And you’ll have to pay a little extra if you want audit defense.
TaxSlayer was initially designed for tax professionals, then it branched out to help individuals prepare their personal returns in the 1990s. It’s been steadily improving in that area, although its “life events” section is still less than comprehensive than TaxAct’s.
The neat thing about TaxSlayer is its “Quick File” option. This should particularly appeal to users who cringe at the idea of spending hours inputting their tax information in a sequential order that’s dictated by the program. Some competitors will allow you to jump around to different aspects of your return, tackling whatever you want to tackle next, but TaxSlayer’s Quick File process for this is particularly efficient. It’s cued by simply typing in a keyword rather than hunting through lists of links.
Of course, you can always follow the prescribed, chronological data entry option if you want to. Even this is better than average, offering two choices: “Guide Me” or “Enter Myself.” The latter also lets you jump around a bit, similar to Quick File. The Guide Me option is necessarily slower because it’s more methodical. It’s a wizard that’s on par with those of TaxSlayer’s competitors — with the exception of Jackson Hewitt. And the searchable information database is the stuff tax professionals dream of.
The Premium edition is reasonably priced, about $40, and TaxSlayer also offers a version specifically for self-employed individuals which runs about $55. There’s the usual free version, called Simply Free, as well as an intermediate-level offering called the Classic for sort-of complex returns. This runs about $22. The Classic and Premium editions are pretty similar, but Premium has better support options. You can wave a distress flag by email, chat, or by phone if you get confused or otherwise run into complications.
If this isn’t your first rodeo — you’ve been preparing your own tax returns for years using one method or program or another — Liberty Tax might be for you. It’s more suitable for experienced filers. The interface isn’t pretty. It’s sort of a let’s-just-get-this-job-done display that involves a lot of manual clicks and a bit of searching sometimes, but that’s OK if you know what you’re doing and what you’re looking for.
Liberty Tax also lets you decide what aspects of a return you want to work on when you want to work on them, presented in chronological order, and it offers recommendations. This program will effectively tap you on the shoulder and ask if you want to file this, that or the other tax form to potentially save some tax dollars. It helps if you already understand what those tax forms are. Otherwise, you might be left a little in the dark.
If you enter information that might provide an audit trigger for the IRS, Liberty Tax will warn you. Audit support is included in the price, and you can purchase an upgrade for actual audit representation. It will also e-mail you if you begin your tax return and don’t come back to it for a while, a little reminder that you’re not quite ready for the filing deadline yet.
Liberty Tax isn’t technically software like many of the other programs. You can’t download it to your computer, and it doesn’t offer apps for phones and tablets. You can purchase the online code for the EZ edition for $15, or the Basic edition for $20. The Deluxe edition is $40. If your tax situation is more complicated, the Premium edition online code will cost you $70.
Credit Karma is the new kid on the block. Yes, it’s the same Credit Karma that monitors your credit for a fee. The company launched into tax preparation in 2016, and so far both state and federal returns are free.
Credit Karma has a few kinks to work out yet, but it’s superior in a few respects to the free versions of other software. For one thing, it’s not limited to simple 1040EZ and 1040A returns. It can handle more complex tax situations, although its hand-holding and help functions aren’t as extensive. Its interface is functional at best and the program isn’t very streamlined yet, but that can be expected to improve over time. After all, this is pretty much the tax program’s first incarnation.
Credit Karma is set up much like its competitors. It asks you questions and calculates your tax return based on your answers, although there’s no “life events” feature. You can work on tax topics at random, choosing what you want to tackle next, or Credit Karma will walk you through the preparation process step by logical next step. Live help isn’t available, although you can e-mail for assistance if you run into problems.
And even though tax preparation itself is free, you still have to sign up with Credit Karma for the credit monitoring program to use it—about $30 a month. In other words, you must be an existing customer. But at least you’re getting two products for the price of one. You’ll also encounter a lot of ads.
07Best Wizard: Jackson Hewitt Premium
Jackson Hewitt’s contribution to tax software will cost you a little less than H&R Block and TurboTax, and you’ll get a really efficient and extensive wizard in return — that feature that walks you through a series of questions then spits out a completed tax return based on your answers. The Jackson Hewitt wizard covers just about every conceivable tax situation for personal filers.
Jackson Hewitt Premium can handle complex tax situations, although you can’t count on explanatory popups to tell you why it’s done and what it’s done, at least not in every situation. There are help topic links, however, as well as readily available links for live support, something most other tax software developers don’t offer. Then again, Jackson Hewitt has more than 6,000 brick-and-mortar locations, so the company is really positioned to offer this service.
What you won’t get for your money is a top-notch user experience. Reviews have said that the program’s efficiency can be iffy at times. The interface is a bit hard on the eyes and navigation isn’t particularly streamlined.
There’s a free version for easy returns, a basic edition for $20, and a deluxe version for $35. The premium version will set you back $50 as of 2017. State return preparation is extra for all but the free edition, but Jackson Hewitt will throw in a $20 Walmart eGift card to take the sting out of paying this add-on fee. In the end, the state return will end up costing you about $16.
The 7 Best Tax Software Programs to Use in 2018
The average cost of hiring a professional to prepare your tax return is about $275, at least if you have anything other than the simplest tax situation. That’s a lot of money to part with and it’s often unnecessary.
You can save yourself some money if you identify your tax-time priorities in advance and find software that will address them for you. Some programs are pricier than others, but they’re still generally cheaper than hiring a professional, and you’ll spare yourself having to cram all those tax documents into your briefcase or a box and head off to your accountant’s office.
These software options have you covered. Some of them are actually free — yes, free, at least for filers with simple returns.