The Best Online Tax Software
With the best online tax software, self-preparers can feel far less overwhelmed and much more confident once April 18th rolls around. We test-drove 21 different software options to find out which ones took the headache out of filing, maximized deductions, and catered to absolutely anyone, including the self-employed, regular W-2 workers, and those with multiple sources of income.
TurboTax is totally free for roughly 60 million eligible filers. But, even if you need to upgrade, it's worth it — it’s the easiest tax software to use, by far.
Simple, straightforward software that comes with the option to talk to a live person.
Half the price as TurboTax, but not as user-friendly.
Doing your taxes can feel like going to the dentist — a necessary, painful evil — but the best online tax software makes paying your dues to Uncle Sam (almost) stress free.
That’s why Intuit’s TurboTax is our top pick. Its step-by-step approach leads even first-time self-preparers through the process with ease; not to mention it has the most comprehensive deductions tool we found. And, if you’re filing a 1040EX or 1040A, TurboTax’s Absolute Zero program allows you to file federal and state for $0.
For those who prefer speaking with a real human, H&R Block has agents standing by at 12,000 locations nationwide. All our top picks offer live chat and email support — TurboTax’s SmartLook™ even offers free, one-way video chat with tax professionals — but if you’re having trouble with a particular section of your return, nothing beats sitting down with a tax professional who can walk you through the process.
TaxAct also stands out because it’s very affordable. When you compare its most expensive edition (Premium) with TurboTax’s “Self Employed” edition, the latter costs over twice as much. TaxAct covers the same forms and schedules as its competitors, but it’s not as feature-rich, nor as easy to use.
How We Found the Best Online Tax Software
We started by compiling a list of 21 of the top tax software providers, then narrowed our list to three finalists using these criteria.
We cut any software that didn’t have an option to file the federal 1040EZ form for free.
The IRS offers a free option to file a federal return on its website, so the best tax software products should let you do the same.
Taxbrain, OnePriceTaxes, ezTaxReturn, ezFile, FileYourTaxes.com, ExpressTaxRefund, 1040now.net, Liberty Tax Service
We ditched any that didn’t have easily navigable support pages for the Affordable Care Act.
Since the law is new, most filers will have questions about what they need to report and how it’ll impact their taxes. It’s imperative that this section is up-to-date, helpful, and easy to navigate.
Finally, we cut any software that didn’t offer support for freelancers, the self-employed, and those with alternate sources of income.
We wanted our recommendation to be robust enough to fit the needs of any taxpayer, even if they ran their own business, collected rental income, or worked as freelancers. Cutting software that didn’t offer a business option ensured that each of our finalists can accommodate all income types.
TaxSlayer, Jackson Hewitt, eSmartTax, E-file, 1040.com, OLT.com, TaxHawk, FreeTaxUSA
Online Tax Software Reviews and Testing
We spent a week testing our finalists using tax information for a single male who makes $37,847.06 per year and has no dependents (and got the same $570 refund on each software product). We tested the free versions and the least expensive paid option to examined the premium features, including customer support by phone and live chat. We combed through help forums, asked questions on live chat, and listened to our share of mediocre hold music before talking with customer support on the phone. After 80 hours of research, we had our top picks.
Our Picks for the Best Tax Software
When it comes to overall design, user experience, and unique features, there’s no question TurboTax is the best. Its online app is incredibly responsive and easy to use, and you can upload your W-2 simply by taking a picture of it. And if your employer’s payroll provider is a TurboTax partner, you can import it directly with a few clicks. Its tablet and mobile apps are just as sleek, and you can smoothly transition from one device to another. TurboTax has managed to make doing your taxes feel like a simple game, a breezy slideshow that ends with a fat refund check and no audit.
If you’re self-employed (meaning you’ll file schedules SE and C), you can take advantage of a brand-new feature called Expense Finder. After connecting the software to your bank account, Expense Finder surfaces every single transaction from the past fiscal year that might qualify as a deduction — and it comes with a free, yearlong subscription to Intuit QuickBooks.
TurboTax users also get free expert help via SmartLook™, which connects them via one-way video to a CPA or enrolled agent — aside from a face-to-face chat, this is one of the best customer support tools in the industry. And this year, TurboTax improved with the ability to schedule appointments. The one downside: SmartLook™ isn’t available for Federal Free Edition users.
During our testing, we really liked that TurboTax didn’t push its high-priced options when we didn’t need them. The flow (and soothing icons) helps you choose the software that is best for you depending on your needs, even if it’s the free version. We entered “single” when asked for our marital status and it pointed us right to the free federal 1040EZ option.
From there, filing with TurboTax was like having a pleasant grade-school teacher direct us through our taxes. After the completion of almost any task, even an incredibly tiny one, TurboTax is quick to give a pat on the back with an entire screen dedicated to a giant blue exclamation: “You’ve Done a Great Job So Far!” When we’re in the throes of tax season, we’ll take any encouragement we can get (even if it’s from software).
For its premium versions, TurboTax has some of the steepest prices and developer Intuit has upped costs even more in the last few years — charging for some premium features that were once free. But, it’s also made more of its software options cheaper than ever. TurboTax’s Absolute Zero program makes the expensive (and worth it) software free for millions of filers — anyone with less than $100,000 in income who doesn’t have any rental, investment, or business income to claim or big medical bills to deduct. TurboTax will tempt you to upgrade in order to pre-populate your state forms (instead of retyping it all in yourself), but it won’t charge you for anything else: not federal, not state, not a filing fee.
H&R Block’s calling card is a real-life, flesh-and-blood helping hand. In-person assistance at any of its hundreds of office locations is free to anyone who purchases the online or desktop software. (Free federal filers: You don’t get in-person assistance unless you upgrade, but you can file your return in an office.) If you’re someone who really likes the safety net of a human being guiding you through the muck of tax jargon, H&R Block is the way to go.
H&R Block was an easy top pick for personalized customer support. None of our finalists had 24-hour phone support (they were all generally available during business hours, though times vary depending on time of year). And we didn’t make much of email support; so many taxpayers file at the last minute that, in this setting, email is more like snail mail. When we called on H&R Block for instant chat, it was immediately on the line, and even though it took us a few minutes longer to talk to someone on the phone, it was still such a short wait we didn’t ding the company.
And there’s not much to complain about with H&R Block’s software, either: It’s got a simple, straightforward design with logical checklists that show you how far you’ve come. The progression might be a little too restrictive for some, though; you can’t skip around to different sections or even preview them to see what’s in store. If you try, a lot of red text lets you know you haven’t finished the step you’re on yet. Not so fast, tax filer.
Like TurboTax, TaxAct guides you through screen by screen, automatically saving your information as you go, but unlike TurboTax it doesn’t congratulate you with a giant, heartwarming compliment.
TaxAct is by far the cheapest of our recommendations. If you have a relatively simple return, and you want to get in and out as inexpensively as possible, TaxAct is the way to go. It also has a PriceLock guarantee, a not-so-subtle dig at competitors like TurboTax, which is notorious for pricing changes even after you’ve started your return. Additionally, free TaxAct users can access their return for seven years, which is a paid feature for TurboTax and H&R Block.
The software’s limited e-filing of state taxes might be a deal breaker for some users. The software is missing key forms that make it ineligible for e-filing in some states: It doesn’t have 1041, 1065, 1120, and 1120S for every state. To be fair, forms 1120 and 1120S are for corporations, and most corporations won’t use simple consumer tax software to file. Regardless, if you have a small business, you probably don’t want to file with TaxAct.
Pricing and Features Comparison
|Filing Federal Online||$0 - $90||$0 - $60||$0 - $30|
|Filing State Online||$30 - $100||$20 - $80||$0 - $25|
|Desktop Software (both federal and state)||$30 - $100||$20 - $80||$40 - $55|
|1040EZ and 1040A Free Filing|
|Average Phone Hold Time*||25 Minutes||27 Minutes||19 Minutes|
|Free Filing for the Military|
|Multiple Disbursement Options|
|Automatic W2 Import|
|Complete Taxes on the Mobile App|
|Extensive Educational Material|
|Support via Social Media|
*Average hold times came from GetHuman.com
Other Tax Software We Considered
While Efile has been gaining in popularity lately, and it passed our round of cuts, we didn’t feel comfortable recommending it in the end. We liked the no-frills nature of its simple, text-heavy design, but the process started feeling monotonous as we went from section to section. In the end, we feel the similarly priced TaxAct is a better fit for budget-conscious consumers.
TaxPoint can do both consumer and business taxes, but the checklists of questions weren’t intuitive or well-organized. We were left unnecessarily scratching our heads staring down the checkboxes next to sentences like, “Did you pay more than half of the cost to keep up the home that you lived in 2016?” (What if our landlord was the one who maintained our building?) And we nearly missed the box about paying interest on student loans — it was in a checklist with three questions about having children. The best software logically organizes questions under meaningful titles, such as “Your Family” and “Education.”
The Best Online Tax Software: Summed Up
Did You Know?
If you have a simple return, you can easily do it yourself, even at the last minute.
More than 50 million people do their taxes themselves. According to the IRS, of the 131 million tax returns filed online in 2016, 53 million of them were self-prepared. That’s up 5 percent from the previous year. IRS data also shows that more than 25 percent of tax filers wait until it’s crunch time and send in their returns in the final two weeks.
Even one of the CPAs (Certified Public Accountant) we talked to used TurboTax at home. “I found TurboTax to be pretty thorough and complete,” said Ashley Harris Jr. “Online tax software is fine for relatively simple tax returns; especially if the person will use the step-by-step approach those programs provide. But even then they really can’t be sure simply because they don’t understand tax laws. Errors made by people using these programs are usually the fault of the person, not the software.”
If your return is complex, it might be worth your money to hire help.
Even the most premium tax software is cheaper than hiring an accountant to prepare your taxes, but if you’re running a small business, frequently buying and selling investments, or want to maximize your deductions, it might be worth paying for another set of eyes. Harris recommends knowing your limitations: “I’m sure many people use the DIY software without any problems. But if they start getting into tax situations that can be difficult to analyze, or are not ‘black and white,’ I think they should seek a professional.”
The more you expect from your refund and the more forms you’re juggling, the more the cost of an in-person specialist starts to seem like a good option. The easier your return, the harder it is to imagine paying those rates. According to the National Society of Accountants, the average price of an in-person tax accountant ranges from $159 for a simple 1040 without itemized deductions to $447 for a more complex return with itemized deductions and business income (Schedule A and Schedule C). But if your files are disorganized or incomplete, most accountants will charge you for that too: $114 on average.
Filing late in the season makes you more vulnerable to an identity thief claiming your refund.
A common way for identity thieves to make cash is by filing fake tax returns based on stolen information. They pretend to be you and try to collect your refund before you get the chance. In 2014, the IRS prevented about $24 billion in attempted fraud, but ended up paying an estimated $5.2 billion in fraudulent tax refunds. In 2015, the IRS even opened an investigation into why tens of thousands of TurboTax users had fraudulent tax returns posted on their behalf. Once you file your return, you’ll block any thieves; instead of sending the thief a refund, the IRS will send you an alert.
Online tax software companies insist that it’s not the products that are insecure; it’s that identity thieves are getting better. Once the thieves have your Social Security number (which is actually easy to guess in a large portion of the population) and other sensitive information, they’re only a few steps away from stealing your refund. In response, our top picks all beefed up their security. In addition to asking for your password, they now require you to answer personal questions that are harder for a stranger to get right, like, “What is the name of your third-grade teacher?” TurboTax also sends a six-digit verification number to your phone or email.
You’ll have to pay for convenience, even if you can file for free.
Re-entering your tax information over and over again is a headache. Tax software lessens the blow by letting you re-upload information from last year that will be relevant to the current year. That said, one of the ways software companies squeeze money from you is by charging for the privilege of re-uploading your tax info from last year or porting your information from your federal return over to your state return.
It’s typically free to get your refund by check or deposited into a bank account. But if you want to deduct the cost of the software from your tax refund, most providers will tack on an extra fee of around $35. If you start filing taxes on your mobile phone or tablet using TurboTax, H&R Block, or TaxAct, they’ll charge you an extra fee for “mobile filing.”
If you’re an individual tax filer without many dependents, and you want your taxes done as cheaply as possible, with only a little customer support, we recommend TaxAct. If your return is a little more complicated — you’re a contractor or small-business owner with some 1099 forms; you own a handful of investments or properties; or you want to maximize your deductions — we recommend you skip TaxAct. Go with TurboTax for the best design; pick H&R Block if you’d like the comfort of having in-person support.
Secure your tax information. Keep clear of phishy emails; shred old tax documents; be extra suspicious of phone calls from the IRS (they could be scammers); and don’t file your tax info over unsecure wireless networks.
Collect your forms. Sometimes, the hardest step in filing your taxes is finding all your 1099s and W-2s.
No matter what, send in your payments by April 18th. This year, we all get an extra three days to file our taxes on time, but even if you file for an extension, you still have to pay on time. An extension will give you more time to send in your paperwork, but the IRS gives no grace period on sending in your payments. Even if you’re going to extend your personal tax season until October, estimate how much you owe and pay on time.
Read more. Whether you’re a beginner on a budget or you want software that’s geared more for the small-business owner, we’ve got you covered: