Are you planning to do your own taxes this year? You may want a little help, in the form of tax preparation software — but which product do you choose? We offer a comparison of three of the most popular products in the field: TurboTax, H&R Block, and TaxAct.
All three offer a free Federal tax version for the simplest returns and multiple levels of deluxe versions. They can handle any deduction and tax filing option, are available on mobile devices, and come with accuracy guarantees and audit support. However, each one has some distinguishing features that may make it the best product for you.
Which Tax Preparation Software Is Right for You?
TurboTax – TurboTax is generally considered the top of the line product for its relatively intuitive methods to make your tax filing as easy as possible. Their methods of rooting out deductions are quite comprehensive, making it more likely that you will receive the largest refund possible. TurboTax also provides excellent live chat and telephone customer support.
Features include an option to take a picture of your W-2 and upload it to your return for Autofilling; the trademarked ExplainWhy feature highlights the important elements of your tax return so that you can fully understand them. The SmartLook feature (also trademarked) serves as a backup by connecting you with a live tax specialist if you run into problems with your return.
The downside of TurboTax is that its features come with a significant price. The upper end TurboTax product costs $79.99 and if you use your refund to pay for TurboTax fees, there is a $34.99 processing charge. Still, for complex tax returns and higher income levels, TurboTax is hard to beat.
H&R Block – One of the most recognized names in tax preparation, H&R Block's offering provides a thorough product at a midrange price ($44.95 for the deluxe version). Overviews and helpful links guide you through your tax preparation, but if that is not enough, H&R Block can apply their major advantage — more than 12,000 offices across the country where you can acquire face-to-face advice. Sometimes there is just no substitute for direct support.
H&R Block's Free Edition stands out as one of the best free tax preparation products, providing forms that are absent from competitor's offerings while including free audit support.
TaxAct – TaxAct is one of the best bargain software options starting at $9.99 for the Basic version to $14.99 and $24.99 for the Plus and Premium filing products. However, the low pricing comes at the cost of certain levels of complexity. The self-employed and those with more complex tax needs may find TaxAct lacking, but those with simpler returns will be greeted with a relatively easy-to-use interface.
A pre-built spreadsheet is available to address midrange levels of complexity, such as information regarding stock ownership (gains and losses, reporting categories, etc.). A series of alerts notify you of errors, while corresponding learning tools help to guide you through the forms.
Don't care for any of these options? There are other products to consider, such as TaxSlayer or eSmartTax — and if you earn less than $62,000 per year and have relatively simple taxes, you can use the IRS Free File program. Free File hooks you up with IRS-approved software partners to help you fill out your taxes online.
Whatever software you choose, do more in-depth research before making your choice. This overview may be a good start, but you should check the individual sites to make sure that you find the correct product for your specific tax preparation needs.