With a tax software program, taxpayers upload forms, like their W-2s and 1099s, and answer questions about their finances. Investopedia researchers collected data on 46 factors from each of seven popular tax preparation software applications. TaxAct does not offer a mobile app, but the online experience is compatible with smartphones and tablets. TaxAct ran the table in our ease of use category, earning top scores in software navigation and filer walkthrough, and offers many ways to import your data.
Customer support
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Liberty Tax is a competent online tax preparation service from the well-known brick-and-mortar preparer. However, its online help tools aren’t strong enough to support you if you anticipate needing a lot of handholding along the way. It is also for anyone who wants a no-frills tax prep experience with the option of backup assistance. Jackson Hewitt has an online DIY tax prep service, though it’s best known for its physical offices. It’s been in the online DIY tax prep business since the 1990s. It excels at simplicity, featuring a user interface, navigation system, and contextual support content that helps you through the complexities of the IRS tax code.
If you already know you want to file on your own but are wondering if you should use software (whether free or paid) or paper forms, that answer is simple. Depending on the provider, these pros might be able to give you tax advice or review your whole tax return before you file. Outside of this, the IRS and other state tax departments also offer free tax filing services, such as IRS Free File. However, state returns may not always be included in these offers. Quality tax software should also facilitate the refund or payment process between you and the tax entity. Once your filing is complete, the program runs a final check and submits your return to the IRS and/or the state tax department.
Free software pitfalls
Some packages and programs include access to a tax pro, such as a CPA, should you need it, but these services may require an upgrade or result in additional fees. The program will then guide you through your federal and/or state taxes by asking a series of interview-style questions that will help it populate tax forms on the backend. There may be multiple packages to choose from — but generally, the more complex your taxes are, the more you can expect to pay. TurboTax Free Edition supports Form 1040 and limited tax credits only. 1040, unemployment income, student loan interest, lifetime learning credit, American opportunity credit. This includes H&R Block, whose free version includes more forms than you might get with other online software.
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Most tax software offers a searchable FAQ section or knowledge base, and some offer video tutorials or user forums to help answer questions. How much you pay for tax software is often a function of how complex your taxes are or how much help you need. You can sign up for tax software online via the provider’s website. This can be especially costly for people using free tax software, since the cost of a state return often rises when you upgrade to a paid tier.
Best tax software value for the money: TaxAct
The final date to file an extension for your previous year’s taxes is typically by April 15 of the following year. If you expect you may need more time to file, you chicken road game should consider filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Before buying tax software, it’s important to identify your specific requirements. If you need extra hand-holding while completing your tax return, make sure you review support options.
Nearly all filing services allow you DIY your return, but sometimes you need professional guidance. Many tax software programs have an array of tools to ensure your return is accurate and maximize your refund. Some tax software services let you talk to an expert by video and use live screen sharing. Free tax software tends to make you manually input information and doesn’t provide much support – which may be OK when you only have a few tax forms.
The personal tax preparation services we review here can complete very complex tax returns. Sometimes, a friendly and understandable user experience isn’t enough, so tax websites offer online assistance. The other option, and one every online service offers, involves selecting only the tax topics that apply to you. When you prepare your income taxes using paper forms, you spend a lot of time shuttling back and forth between them. If you need to file a state return after you complete the federal process, however, it will guide you to a free, state-supported preparation and filing tool. We will likely have much more to report by the time you need to file your 2025 taxes.
Claiming dependents, having a health savings account (HSA) or receiving a 1099-NEC or two for freelance work are all common situations that can preclude you from using a free tax filing service. A lot of platforms advertise free tax filing, but you often won’t be able to use it unless your filing situation is extremely basic. For example, you’ll often have to pay extra for access to a tax pro or for audit defense services.
How does tax software work?
Taxes are confusing enough without the added stress of figuring out which tax software to use. Sabrina Parys is an editor and content strategist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes. Tax software providers update their online products annually to align with the current tax law. However, you’ll have an option to decline any additional fees before you file your tax return. You may be aware of some fees only after you start using the tax software.
Key Features to Look for in Tax Software
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Because of the flat fee, Jackson Hewitt is good if you’re required to file more than one state return — like if you don’t live in the state where you work. While most tax services don’t let you use the free version if you itemize, you’re reporting stock or crypto sales or you’re self-employed, you can use Cash App in most of these situations. Because pricing can be confusing and many services require add-ons or upgrades, budget-conscious filers may want to choose a different service. TaxSlayer also offers free federal filing to active military members. You can speed up onboarding by importing a PDF of last year’s returns.
- Unless you’ve experienced major life changes, such as a divorce or an interstate move, and want to discuss sensitive issues with a tax pro, online tax software is more than capable of meeting your filing needs.
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- All the tax software we reviewed does a good job of walking filers through the process, providing cues about progress, and helping users navigate their returns.
Determine If You’re Eligible to File Taxes for Free
However, if you are self-employed, own rental properties or have other investments, you may want to hire a tax professional. Check out the features and capabilities of the software, and figure out which ones your situation calls for. Take time to think about your financial picture and the particulars of your earnings and expenses. In some cases, you may enter your information directly onto a tax form, and you may need some tax knowledge to ensure you enter the information correctly.
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- TaxSlayer is a good budget option for people who don’t need a lot of assistance when filing their taxes and can be a great value for self-employed filers.
- Real-time support from H&R Block’s AI Tax Assist feature, online chat with a tax professional and Worry-Free Audit Support are available with all paid tiers.
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They’re available for questions not only during tax season but also year-round. Some tax prep sites offer to connect you to a tax professional via chat, phone, or screen-sharing. H&R Block and TurboTax have online communities where you can ask questions and search for existing threads. You spend most of your time responding to questions and clicking links to advance to the next screen or using the site-wide navigation tool.