The four best tax software programs
While TurboTax is a familiar name and a common favorite to many tax filers, it is not the only option out there. Many other tax software programs also offer a similar user experience.
If it isn't bad enough that we have to pay Uncle Sam our income taxes every year, we're also responsible for preparing and filing them. Unless you're a tax expert in your spare time, you likely hire an accountant to sort out all those W-2s, 1099s, and 1040s, which can be a significant and costly expense.
Barring that, most of us are best served by using tax-filing software to prep our tax returns correctly. Several options are on the market, and the right one for you depends on your financial needs, plus the types of features and conveniences you're looking for.
Check out our four top tax software picks below.
Best for: Everyone, from single filers to small business owners
Hands down the most advanced, intuitive, and comprehensive tax preparation software, we recommend TurboTax, since it comes closest to having a professional do your taxes for you. It's noted for its conversational feel and modern interface, with a mobile app and easy-to-understand design that allows you to resume or finish your filing from your smartphone or other computer.
TurboTax's autofill feature for details like charitable donations and salary amounts helps avoid mistakes on the calculation end, and importing information from prior tax returns and other sources is a breeze. The software even offers hearty exclamations like "You've done a great job so far!" upon completion of each section. Live, fast customer support is also top-notch on the accessibility front.
One of the only drawbacks to TurboTax is that it can get pricey if you're looking for additional features. Here, you get what you pay for — the free version may not be robust enough if your tax situation is filled with more complexities than a single filer may incur.
Best for: Simple single filers up to homeowners, self-employed people, and contractors
Look at TaxAct as a budget version of TurboTax — though it won't offer as many bells and whistles, it's lauded for its navigability, pricing, simple design, and other elements that make this tax filing software worth checking out. To start, you can work through the "Life Events" section. It helps you pick from a number of financial categories and life situations, so you can find the right forms and uncover any deductions you might be eligible for. (More than 300 deductions and credits are available.) TaxAct is also ideal for consumers who don't need extensive filing, like Schedules C and F.
TaxAct's big perk — the ability to jump around from section to section out of order — is also its biggest drawback if you have the free version installed on your computer. Some sources say it can be time-consuming and less user-friendly, without any of the ease of use that the Plus or Premium packages offer. If time is money, spend a little extra and upgrade.
Best for: Simple tax filers up to rental property owners/small business proprietors
You may have been getting your taxes done for years at your local H&R Block walk-in location, and its filing software comes with the same respected reputation. Reviewers online have noted that it offers most of the same features as TurboTax. All versions of the product come with five free federal e-files, free unlimited tax expert advice, and data security, according to the H&R Block software site. You can stop, save, and pick up on another device where you left off.
But the most remarkable feature is that H&R Block's software will tell you as you go along how much your refund is so far — and why it's growing or getting smaller. This software has been lauded for its refund bonus program; when you accept some or all of your federal refund as a gift card for select retailers, you get up to a 10% increase.
Compared to rivals such as TurboTax, even H&R Block's software comes with some cons. According to The Wirecutter, TurboTax appears to have a far larger database of tax ID codes for employers, schools, and the like, which H&R Block misses out on, leading filers to enter all of that data manually. It's also not quite as seamless in explaining which deductions go where, and has some subpar importing functions. For software with no free base version — unlike TurboTax — this may be more than a minor quibble.
Price: Free to $5.95 (free for federal; $13 for state filing; $19 for Deluxe Edition)
Best for: Single filers, households, people with investing and small business taxes
If you're a single taxpayer or just have a simple, straightforward year of income, and have an idea of how much you owe the IRS, you may not need to splurge on one of the above premium options. If that sounds like your situation, FreeTaxUSA is a basic, effective way to e-file your taxes until you decide whether upgraded tax software is right for you next year. A contributor to Forbes maintains that FreeTaxUSA is actually faster than TurboTax, allowing you to download all of your returns in PDF format. If you're a taxpayer under 22 years old, it's free to use, with an upgrade to the Deluxe Edition just shy of $6.
As with any freeware, FreeTaxUSA is no-frills, and it's bound to have some lackluster graphics that can make any filer feel inundated with a wall of text. But for the savings, it's not a drawback as much as a more efficient way to get your taxes done without spending all of your potential refund on a professional.
This article first appeared at DealNews.
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