Best tax software
Years ago, many folks needed an accountant to do their taxes, with the daunting task of figuring out which tax forms to collect from the local public library, needing to calculate the tax burden on those dreaded tax tables, knowing on which line to enter all those numbers, not mention the difficulty of making an itemized list. With even a simple tax return requiring quite a bit of labor, it is no wonder accountants thrived.
These days, the right accounting software can turn even a novice tax filer into a DIY accountant. These programs ask a series of questions as part of an interview process, and then do the heavy lifting to put all the correct numbers into the right boxes, and even transmit your return electronically. Here are five great choices to cater for your tax needs...
A bargain tax solution
TaxSlayer positions itself as a bargain tax solution, offering prices that undercut the competition across multiple tiers.
The base tier of TaxSlayer for basic returns, known as SimplyFree, offers a Federal and State return, including the eFile, all for free, but only for 1040EZ forms. The more popular Classic tier includes all major Federal tax forms, and includes a W-2 import for a dirt cheap $24, but the State forms are an additional $4.95 fee, which should be fine for most users.
The offerings top out at $47, and cover the specific needs of the self-employed, including contractors and 1099’s, and also require the additional fee for a State return. There is an online guide to assist users in choosing the best version of the program for their needs.
Even at these affordable prices, a notable feature is the included phone and email support (24 to 48 hour response) on the lower tiers, and live chat on the higher tiers.
The no-frills tax solution
Sporting a simplified interface, TaxAct takes a no-frills approach to the chore of doing the taxes in the cloud, while undercutting the prices of the bigger players.
TaxAct starts with a free tier, which is fine for filing a Federal 1040EZ return, although the State is $17 additionally. There are five tiers in total, topping out at the Premium tier for $69.95 which covers all situations, although the State return at this level adds an additional $39.99.
TaxAct has all the basics covered, including importing W-2’s, and importation of prior years’ returns. There is also mobile app support for calculating returns on the go, and you can even use your smartphone camera to capture your W-2 income form.
TaxAct eschews email support in favor of phone and chat support. It also offers a $100,000 accuracy guarantee.
A robust feature set, but still affordable
Formerly known as Kiplinger’s TaxCut, H&R Block TaxCut has been around for many years, and is a full featured tax solution. With four tiers, it can handle just about any return.
Unlike some other offerings, TaxCut has no free tier, and the simpler returns start with the Basic one which retails at $29.95. While it includes a Federal eFile, adding a State return means a hefty $39.95 extra, and for a State eFile it's an additional $19.95.
Unless you live in that few handful of states with no State income tax, such as Florida, most users are better served with the next tier up, Deluxe, which for $54.95 is better value as it includes both the Federal and State return, although the State eFile still adds an additional $19.95.
The standout feature of TaxCut is that there are approximately 12,000 H&R outlets that are available to users of the program when some in-person hand-holding is needed to get the job done - for an additional cost. Online chat, like its competitors, is included for no extra outlay.
The venerable master of tax return software
Ask someone to name a program for tax prep, and chances are they will say TurboTax. That’s not by accident as this firm is an old pro in this area, having its origins in the mid-1980’s when TurboTax was first created by the software company Chipsoft.
The online offerings start with a free tier for Federal taxes, and the State adds a reasonable $29.95; this is fine for a 1040EZ or 1040A return, but not a full 1040. The full 1040 requires a step up to the Deluxe tier, which goes for $59.99, and the State return adds $39.99 to the package.
TurboTax includes the 'ItsDeductible' feature, which can assist in calculating the value of donated items. It can also store your documents online for safekeeping if they are needed later, such as for an audit.
Free Federal tax software to bring a smile to a skinflint
Getting your taxes done for free does sound like an attractive offer, and yes, the name of this product does indicate the truth. Federal taxes can indeed be done for free - for all returns including a full 1040, and even more complicated tax situations such as an Earned Income Credit, or a K-1. Adding a State return tacks on an affordable $12.95 fee.
Compared to the competition, FreeTaxUSA does indeed represent the bargain here. There is a higher Deluxe tier offered, which adds Audit Assist, Priority Support and can handle amended returns, but true to the cheapskate origins, it's only an additional $6.99.