It’s that time of year again to search for the best tax software. Yes, April 15th has a unique way of sneaking up on all of us, so it’s never too early to start getting the necessities in order to make this tax season as painless as possible. For the third straight year, TurboTax is our top overall pick.
Get started for free with TurboTax.
We have searched far and wide to bring you the top providers, giving you the best deals, coupons, and price to get you the highest return. We’ve also scoured for changes in the tax code and other things the taxpayer of yesteryear may miss when the tax man comes knocking in 2016. Overall, not much has changed over the multiple years in the landscape of great tax software companies, with the same bunch standing above the rest. Here are our picks for the very best tax software.
The Three Best Tax Software Products for 2016:
These Companies Barely Missed The Cut
TaxAct, TurboTax or H&R Block: What is the Best Tax Software?
When it comes to filing taxes, generally we can all agree that easier is better. While taxes can only be but so simple, these three names in tax software find unique ways to streamline the tedious process. Let’s take a quick glance at what stands out for the top three picks, and why TurboTax edges out the rest.Start TurboTax Federal Free Edition Here
Our pick for the best tax software to file your taxes for the 2015 fiscal year is the industry standard, TurboTax. While other companies have undoubtedly replicated what TurboTax pioneered, Intuit’s tax filing software still stands as the most streamlined and intuitive way to file your state and federal taxes. From its slick design to its top-of-the-line audit threat detection, you’d be hard-pressed to find an easier, safer way to file your taxes this year.
And as of this year, Turbo Tax has also rolled out some new features. That includes a new feature called “W-2 Snap and Autofill,” which lets you take a picture of your W-2 and upload it. Also included this year is SmartLook™, a feature that connects TurboTax users with a live tax customer support specialist if they need help. Lastly, ExplainWhy™ highlights the biggest components of each user’s tax return in order to help them understand it better.
TurboTax boasts an extensive Federal Free Edition that includes numerous perks you may have to purchase elsewhere. In addition to the companies plethora of tax planning options, TurboTax features intuitive mobile apps with all the core functions of the main site, making it a uniquely tech savvy option. I’ll dig deeper into the specifics in a bit.Start With H&R Block Here
Easily one of the most trusted names in finance, H&R Block stands out from the crowd because of its customer service and regional accessibility. Let’s be honest with ourselves, filing taxes can be an overwhelming ordeal, even with the perfect software. With over 12,000 locations in the United States, H&R Block will likely put you just a stone’s throw away from speaking face-to-face with a professional who can help you sift through the financial maze.
On top of its customer service, H&R Block also offers surprisingly a comprehensive free tax software option, the At Home Free Edition, that includes free audit support and representation. All in all, not a bad deal. A much more affordable option that TurboTax, but sacrifices some of the user experience.Start With TaxAct Here
If your top priority this tax season is saving some cash, TaxAct can be one of the best online tax software options. Although it’s the most affordable tax software, TaxAct doesn’t not run like a “cheap” software at all and very much holds its own against the stiff competition of TurboTax and H&R Block.
TaxAct is perfectly built for a standard W-2 worker with a less-than-confusing tax return situation. If this describes you, we would consider TaxAct and potentially save yourself a few bucks this tax season. Otherwise, you may want to look into TurboTax or H&R Block as the best tax software.
Still having a hard time picking? Checkout our Best Free Tax Software Guide
What Features Should Your Tax Software Have?
- Accuracy guarantee
- Audit-risk identification and recommendations
- A variety of ways to claim your refund (check, direct deposit, prepaid debit card, savings bonds)
- Basic facilitation
- Intuitive mobile interface
- Strong customer support system
- Ability to import all of your forms and data
Which Deductions Should Your Tax Software Offer?
- Standard Deductions
- Charity Donations
- Itemized Deductions
- Business Owner Deductions
- Depreciation Summary
- Vehicle Deduction Methods
- Rental Property Deductions
Aside from the plain-Jane nuts and bolts of the best tax return software, the biggest thing to look for is intuitive design. The very last thing you want this April is to be banging your head on your desk trying to sort through a clunky interface. The biggest area that TurboTax excels in is its user-friendly mobile and slick web design. TurboTax truly lives up to its name as the best tax software, and is undoubtedly the fastest way to get those taxes done.
How to Choose the Best Tax Preparation Software for You
The tax preparer software needs for a nine to five employee and a CEO of a start-up company are worlds apart. Maybe you’re like me and work multiple freelance jobs? Your tax software is completely dependent on your specific tax needs.
First-Timers: Start with TurboTax Free Edition
If you’re new to paying taxes, I would highly recommend starting with the free version of our top income tax software choice, TurboTax. It’s reliable and intuitive, and should make your first time filing taxes a bit less painful. If you’re lucky, your taxes will be simple enough that you don’t have to upgrade beyond the Free Edition.
Best Small Business Tax Software: Go with H&R Block
It’s always nice to have someone watching your back, especially if you are in charge of a small business. With H&R Block you can take your taxes to any local office and have them look over it for free. The personal touch of H&R Block’s customer service make it a no-brainer for any business owners out there. The best tax software for small business, hands down.
Best Professional Tax Software for Experienced Tax Filers: Stick with TurboTax
Overall, TurboTax still remains the best tax software for the serious tax filer. The intuitive software is built to handle even the most complicated tax needs with ease. TurboTax rapidly calculates everything from refunds and deductibles to accurate audit risks, making it perfect for both first-timers and as a professional tax software preparation software.
Income Tax Calculator
In order to help estimate your taxes, we’ve built this income tax calculator that will calculate your federal and state income tax, total income tax, and expected take-home earnings based on your filing type, locations, and annual earnings. This should help you prepare and plan your taxes as well as manage your finances for the year, especially if you owe more money than you anticipated this year because you didn’t withhold enough.
A Guide to the Different Versions of Tax Software
Thankfully, finding the right version of your software isn’t as difficult as it is sounds. Since it behooves these tax filing companies to move your money as smoothly as possible, they are created to allow smooth upgrading if needed for your current tax situation. If you’re unsure of where your exact situation lies, I would recommend starting with each company’s free tax software option and working your way up, or staying there if it covers you. Your income flow and your situation will dictate which tier you’ll be in, but I’ll give you a quick rundown of the four main levels offered by the best tax software companies:
Federal Free Edition — The best deal, this provides the resources to prepare and e-file both federal and state taxes and is generally utilized by those with the most basic tax needs. Federal filing is free, but state typically incurs a fee.
Basic Edition — includes all the features found in the Federal Free Edition with the inclusion of access to basic deduction identification tools and improved support.
Deluxe Edition — generally offers more to identify deductions through industry- or occupation-specific deduction searches. May also include more robust tools for life events, donations, and audit risk.
Premium Edition — generally grants access to the full functionality of the software with deduction assistance that expands to include rental properties and other business-specific tax deductions, along with advanced calculators and additional investment resources.
Tax Software Comparison: TaxAct vs TurboTax vs H&R Block
While we have found TurboTax to be the best tax software option overall, all of the main competitors have something unique to bring to the table. To remove any remaining bias, let’s compare some of the measurable qualities of each piece of tax software.
The table below compares the main components of each of the contenders, not a breakdown of every feature each company has to offer. You can find our deeper dive into the ins and outs of our main competitors below.
Best Tax Software Comparison
Below are ALL of the things you need to consider when choosing the best tax software. After comparing, simply click get started to be one step closer to finishing your taxes!
|Federal Price Range||$0 – $79.99||$0 – $49.99||$0 – $12.99|
|State Price Range||$27.99 – $36.99||$27.99 – $36.99||$5 – $14.95|
|Editions||Free Federal, Basic, Deluxe, Premier, Home & Business||Free Federal, Basic, Deluxe, Premium||Free Federal, Basic, Plus, Premium|
|Receive Payments by Multiple Methods||Yes||Yes||Yes|
|All Tax Filing Options||Yes||Yes||Yes|
|Get Started Now||Get Started Now||Get Started Now|
How We Selected the Top Tax Software
- I pored over dozens of reviews and statistics on the biggest names in Tax Software
- I read up on all there is to know about filing taxes taxes
- Determined a top tier of companies based on their ability to meet the criteria of a great company.
- With our top choices, we evaluated their performance in the areas of facilitation, disbursement, accuracy tools, and deduction discovery. The companies that excelled in all of these categories made the top three best tax software list (TurboTax, H&R Block, and TaxAct.)
- I also considered the different editions offered by each company, including Free, Basic, Deluxe, and Premium. “Free” only applies to federal returns, however, as state returns typically cost a small fee. The other versions simply become more inclusive as you climb the ladder. For example, Basic Editions typically include basic deduction identification tools, data importing, and more live support than Free versions. With Premium Editions, you can find tools for rental properties and other business-specific tax deductions along with advanced calculators and additional investment resources.
Online Tax Software Reviews: A Deeper Look at the Top 3
TurboTax: The Best Tax Preparation Software
TurboTax is undeniably the most recognizable name in tax prep software. While the biggest isn’t always the best, TurboTax has repeatedly proven itself worthy of the recognition.
- Comprehensive Federal Free Edition that includes 1040EZ, 1040A, and 1040 forms as well as live chat
- The best design in the industry
- Intuitive deduction tools
- AnswerXchange knowledge base is surprisingly all-encompassing
- Strong customer support
- Heads-up audit detection while you file your taxes
- A wide array of disbursement options
- Trusty phone support hotline
While all these features are paramount to great tax software, let’s be honest, you’re looking to save money. With TurboTax, you will get your biggest refund, guaranteed. TurboTax walks you through a plethora of deductions to help make your tax season a bit more cheerful, including charitable donations, small business owner, and owning a rental property.
All of this with 100% accurate calculations and step by step guidance.
While TurboTax is likely the best tax software in the field, it’s not without its weaknesses. As many TurboTax users will point out, the price has steadily climbed over the past few years and rests as one of the pricier options available. For example, the most expensive price tag for filing federal taxes is $79.99, compared to competitor H&R Block’s $44.99.
The company also has a steep processing fee of $34.99 if you pay your TurboTax fee with your federal refund.
Overall, in a very competitive field, TurboTax is able to slightly edge out the competition with an intuitive design, excellent customer service, and insurmountable audit and deduction detection.
H&R Block: The Best Customer Support and Service at an affordable price
H&R Block’s low-profile green block just may be the most universally recognized symbol in finance, and they have the customer service to back it up. With over 12,000 locations spanning the 50 states, this firm is able to offer a more personal touch should issues arise. Regardless of the plan chosen, H&R Block offers free in-person audit support, which can be the difference between a typical tax season and utter financial ruin. Truly, the ability to connect with a person face-to-face is where H&R Block stands strongest, and is unrivaled in this respect. No other company offers, to this extent, a customer service experience so personalized.
H&R Block is also considered to be one of the most reasonably priced best tax software amongst its competitors, with four filing plans ranging from free income tax software to $44.99 (federal.)
H&R Block Highlights
- Here’s a rundown of H&R Block’s highlights:
- The ability to walk into an office and speak with a person face to face (you can also call for help via phone, live chat or teleconference)
- Standout tools to help with more complex tax needs, including deductions
- Helpful page-by-page overviews and step-by-step workflow
- Peppered with links throughout each page to answer any questions you might have, such as “What qualifies?”
- The bookmarking system enables you to tag anything you want to go back to
- File federal taxes for free with the At Home Free Edition, which provides many tax forms other competitors don’t, plus free audit support and representation
H&R Block Downsides
Right now you may be asking “with all the upsides, why isn’t H&R Block the best tax software?” The main component that holds H&R Block back from shining the brightest is a rather bland and subpar website and a difficult to navigate interface. If you’re looking to stay on the software side and have no need for the personal touch, TurboTax outdoes H&R Block in spades, albeit at a more expensive price tag.
TaxAct: The Best Cheap Tax Software
TaxAct is undeniably one of the most affordable best tax software options on the market for the standard taxpayer, with its deluxe option priced at only $12.99. Although nothing can beat good savings, TaxAct is able to stay less expensive by not offering many high-end options needed for self-employed people, investors, or property owners. If you’re a straightforward W-2 employee with a simple return, TaxAct likely has all you need to effectively file your taxes and save some cash.
- TaxAct offers top value, as it’s affordable without sacrificing quality
- TaxAct provides a pre-built spreadsheet where you enter information like reporting category, sales proceeds, gains/losses, and other relevant stock information
- Mini-alerts identify errors, along with robust learning resources that make sure you get all the help you need
- With the Free Edition, you can file federal tax forms for simple and complex tax returns for different statuses and life situations
The biggest downside for TaxAct is, as mentioned above, it lacks many essential tools for self-employed, investors, and property owners to file their taxes. If you file a very plain-Jane tax return, TaxAct could be the company you’re looking for.
Online Tax Software That Missed the Cut
Although TurboTax, H&R Block, and TaxAct stood out the most, there were a few other free tax preparation software reviews worth looking into. Here’s a quick look at TaxSlayer and eSmartTax.
- You can choose to be guided or not, which is great if you want to bypass all the quizzes because you’re confident in your tax abilities
- Prior-year tax form access makes it easy to prepare your forms and alter them to save time
- The very helpful life events guide makes sure you correctly input information about births, a new home, etc.
Why TaxSlayer Didn’t Make the Cut
- Deduction tools aren’t as strong as the top three — items like charity donations, rental properties, and industry-specific deductions aren’t identified
- No live chat or user forum to get help instantly, however through the premium service, your questions do jump to the front of the queue for faster response time
- Affordable Care Act (ACA) forms and resources
- A clean and modern interface makes this software easy to navigate
- Owned by Liberty Tax, has office locations available for in-person help
- You can import prior-year forms and prepopulate information to save time
Why eSmartTax Didn’t Make the Cut
- Missing some of the more common features like a life events adviser and tax calculator
- Deduction discovery resources are very limited, which won’t suffice for more complicated taxes
- Sale of home feature is only available at its Premium level. Sale of a home is a fairly common transaction that would be a no-brainer at a Deluxe tier level.
The Best Tax Software (4 Things to Know)
When shopping for your tax software, there is a certain checklist you want to complete. In our research for the best tax software, these are things I looked for the most:
- A sleek, intuitive interface that expedites the tax process
- An arsenal of useful tools, including those for specific industries and special circumstances, as well as audit and deduction detection
- Ample customer service to assist during the filing process
- All in all, a not-so-frustrating experience
Next to Thanksgiving dinner with the in-laws, tax season is likely the most stressful time of year. Whether you’re filing for your family, your business, or yourself, the biggest piece of advice we can give you is to be proactive. While we all lead busy lives, it’s always best to get a jump on the upcoming tax season and not let it sneak up on you like it has a way of doing.
Admittedly, there will never be a replacement for hiring a professional to take care of your taxes. But for anyone looking to save some money and take matters into your own hands, we have found TurboTax to be the best tax software on the market. Its ease of use and intuitive design paired with the gravitas carried by its name make it the premier option on the market. H&R Block and TaxAct aren’t hanging too far behind, offering unsurpassed customer service and affordability, respectively. But for the majority of taxpayers, your best bet is the slick industry hallmark, TurboTax.
It’s perfectly natural to be a bit skeptical and to want to try it out for yourself. We would recommend getting started with either the free tax software version of TurboTax or H&R Block, both of which are surprisingly comprehensive and may be all you need to file those taxes. However, if your position becomes a bit more complicated, you can upgrade to the next tier of your best tax software until it suits your needs. Whichever software you choose, make sure it’s suited to fit your tax requirements, offers good deductibles and audit protection, and most importantly, helps put more of your hard-earned cash back in your wallet.
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About this resource:
Created on: January 12, 2015
Updated on: August 18, 2016
Edited by: Jon Gorey
Research by: Kevin Oliver