The Best Online Tax Software
The best online tax software gives self-preparers confidence and control once April 17th rolls around. We compared 21 widely-available software options to find out which ones maximized deductions and catered to absolutely anyone, including the self-employed, W-2 workers, and those with multiple sources of income. Then we took the top three for a spin to discover which offered the best design and customer support to take the headache out of filing.
TurboTax is totally free for roughly 60 million eligible filers. But even if you need to upgrade, it's worth it — its step-by-step approach to filing, plus comprehensive in-app help systems, make it the easiest tax software to use by far.
Simple software that offers the option to talk to a human being online or in-person. It doesn’t provide quite as much in-product guidance as TurboTax, but it comes close.
Half the price of TurboTax, but not as user-friendly. Its cluttered screens can make filing less straightforward, but even its premium edition is cheaper than competitors.
The Best Online Tax Filing Software
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. As for premium features, TurboTax now offers live support via one-way video from a certified public accountant or enrolled agent, which means more guidance and reassurance that you’re getting the highest return possible.
H&R Block takes customer support one step further with their Tax Pro Review, which lets you schedule a meeting with an agent online or at one of their 12,000 locations nationwide. 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. The software offers fewer built-in guidance and help tabs than TurboTax, so filing on your own — a limitation of free versions — won’t be as simple for beginning filers. But if the upgraded option of face-to-face guidance is a must, H&R Block is second to none.
TaxAct also stands out for its affordability, even for upgrades. Its most expensive edition (Premium) is less than half the cost of TurboTax’s “Self Employed” edition. TaxAct covers the same forms and schedules as its competitors, but it’s not as feature-rich, nor as easy to use: It offers no video support, and the cluttered nature of its screens can get confusing. If all you need is to file a simple 1040EZ or 1040A, we’d go with TurboTax. But if your taxes are more complex and you can do without a few helpful features, TaxAct is a solid bet and great bargain.
How We Found the Best Online Tax Filing Software
With more and more Americans filing their taxes online every year, a number of companies have stepped in to meet the growing demand for online tax software. We started our search by compiling a list of the 21 most widely-available providers, then narrowed it down to three finalists using the following criteria.
We required the option to file the federal 1040EZ and 1040A forms for free.
This was an easy decision for us. If the IRS lets you file a federal return on its website for free, then the best online tax software should, too. We required both forms; If you bought health insurance through an Affordable Care Act (ACA) state or federal exchange (also known as the marketplace), you’ll need to file with at least a 1040A. As for the 1040EZ? It’s the most common tax form filed every year.
1040.com, 1040now.net, E-file, EFileTaxReturns, ExpressTaxRefund, ezFile, ezTaxReturn, FileYourTaxes.com, OnePriceTaxes, Taxbrain, TaxHawk, TaxSimple, TaxSlayer
Next, 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. We only included software that offers a business or self-employed option, ensuring that each of our finalists can accommodate all income types.
Liberty Tax Service, OLT.com
We looked for software with free options for both federal and state taxes.
If you live in one of the seven states without an income tax, any of our remaining software options could be a good fit for you. However, to accommodate the most users, we dropped any software that doesn’t let you file state taxes for free in addition to federal. While this isn’t a requirement for many taxpayers, most states require their citizens to file state taxes on top of federal. In addition, if you moved in the past year, having the option makes filing easier and less, well, taxing on your wallet — after all, moving is expensive enough. Though many companies advertise free filing, often that only refers to the federal portion. The best tax software should let you file all of your taxes without any hidden charges.
eSmartTax, FreeTaxUSA, Jackson Hewitt
Finally, we created profiles and filed our taxes.
We tested our three finalists using tax information for a single male who makes $22,485 per year and has no dependents (and got the same $860 refund on each software product). We compared the free versions and paid options to examine which offered premium features, including customer support by phone and live chat. Then we combed through help forums, asked questions on chat, and listened to our share of mediocre hold music before talking with customer support on the phone. We gave props to companies that provided support for any question, whether simple or complex — everything from where to find our W-2 to what we need to report if we’re under the Affordable Care Act. Our goal: find the tax software that made filing our taxes as easy as possible.
That meant finding software with easy to navigate screens, helpful hints and guides, and answers to commonly-asked questions. Software like TurboTax earned points for providing answers to any question we could think to ask — they even predicted our follow-up questions. We couldn’t say the same for others like H&R Block or TaxAct, which at times left us wanting more information.
After hours of research and comparisons on everything from price to screen layouts, we landed on our top picks — one software that’s best for most filers, plus two more that are better suited to users with more specific needs.
Our Picks for the Best Tax Programs Online
When it comes to overall design, user experience, and unique features, there’s no question that TurboTax is the best. Its online app is incredibly intuitive, with large buttons and friendly, conversational text, 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 navigable, and you can transition seamlessly 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.
During our testing, we loved that TurboTax didn’t push its high-priced options when we didn’t need them. Right from the start, TurboTax helps you choose the software that is best for you depending on your needs, even if it’s the free version. On its recommendation screen, we entered that we had a job, dependents, and rent payments, and it still 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. The software is incredibly instinctive, and our testers never felt lost, thanks to ever-present help functions and guides. When providing our health insurance information, for instance, TurboTax offered detailed but straightforward explanations to help our tester figure out what type of coverage they had.
We also like that TurboTax checks in to make sure you understand why your taxes are being filed in a particular way. If you don’t, TurboTax keeps you moving but promises to go over the information again later. Not only that, but 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 big thumbs up: “Great job so far!” When we’re in the throes of tax season, we’ll take any clarification and encouragement we can get (even if it’s from software).
The biggest change this year is the addition of the TurboTax Live service, which connects you via one-way video to a certified public accountant (CPA) or enrolled agent (EA). After connecting with a tax expert, you can get professional advice on maximizing your returns, and your assigned CPA or EA will even review your entire return to get as many dollars back as possible. The full service is released in January, but from our demo, we can attest that this is one of the best tax support tools in the industry apart from a face-to-face chat. The one downside: At $150, TurboTax Live is the most expensive software package we found.
If you don’t need help from a CPA or EA, you can also get extra help with any paid plan via SmartLook™, which connects you via one-way video to a TurboTax specialist. The difference? A specialist can help guide you through the steps of filing a return but won’t be able to answer tax-specific questions to maximize your return like a CPA or EA would. No matter which service you use, you’ll be able to schedule appointments more than two weeks in advance, which means even the busiest of customers can get the help they need.
If you’re self-employed (meaning you’ll file schedules SE and C), you can take advantage of the self-employment plan and 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, year-long subscription to Intuit QuickBooks.
Best Customer Support
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 hours 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 submitted a request for instant chat, H&R Block was immediately on the line, and even though it took a few minutes to talk to someone on the phone, it was still such a short wait that we didn’t ding the company. Plus, our customer service representative was kind and patient as they walked us through pricing — without pushing paid options.
New this year is what H&R is calling Tax Pro Review: an improved version of H&R Block’s Best of Both service. Essentially, clients begin their tax return online, and can then choose to be paired with a tax professional who will help them complete, review, and file the return. The best part? It can be purchased as a separate service for $59.99-89.99 (depending on the complexity of the return) rather than as part of a $150+ package like the similar TurboTax Live. Better yet, the Tax Pro service gives you the option to choose a tax expert in your local H&R office for a face-to-face chat.
H&R Block’s calling card is a real-life, flesh-and-blood helping hand. If you’re someone who appreciates the safety net of a human being guiding you through the muck of tax jargon, H&R Block is the way to go. (Free federal filers: You don’t get in-person assistance unless you upgrade, but you can still file your return in an office.)
In addition to Tax Pro Review, H&R Block is rolling out a service called Tax Pro Go, which starts at $60 and matches consumers with a digital tax professional. Clients simply have to upload their documents, and the professional will take care of the rest. Better still, the return will be sent to clients within five days for approval. We’ll admit the offer sounds tempting — a lot of tax software, including TurboTax, can start around $60, but you’ll have to do most of the heavy lifting. The catch? H&R Block won’t release the feature until January 5th. We’ll keep our eye on it for now, but since we can’t test it, we can’t include it in our consideration for the best.
As for free filers, they can expect nearly the same services as TurboTax, plus access to a 1040 Schedule A form for itemizing deductions — best for those who are a bit more tax savvy. And there’s not much to complain about with H&R Block’s software, either: It has a simple design with straightforward progression, with logical checklists that show you how far you’ve come and how much is still ahead. The checklist 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, you’ll be greeted by harsh red text that lets you know you haven’t finished the step you’re on yet. Not so fast, tax filer.
At times, H&R Block’s software also fails to predict common clarifying questions. For example, our tester wasn’t sure what to do when filling out their employment information — they had three jobs in the past year, which was one more than the allotted space on H&R’s online form. Under the “Need Help?” banner, H&R Block’s system drew a blank. Even though TurboTax only offered space for a single job, it still predicted the confusion and provided an explanation, reassuring our tester that the software wouldn’t forget extra income.
If you want to get in and out of your return as inexpensively as possible, TaxAct is the way to go. Even its Premium option is cheaper than that of competitors, maxing out at $35 (with an additional $37 per state). It also has a PriceLock guarantee, a not-so-subtle dig at competitors like TurboTax, which notoriously charges for add-on features 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.
You’ll make a few sacrifices for the price. TaxAct isn’t as interactive or enjoyable to use as our other top picks. We initially liked the no-frills nature of its simple, text-heavy screens, but it made the process feel monotonous after a while. At times, the amount of text makes the process more difficult to navigate — when compared with the large, scannable tools of TurboTax, it can be hard to find the information you’re looking for.
The software’s limited e-filing of state taxes might also 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. Still, despite its drawbacks, TaxAct is still a solid option for filers who don’t need the aesthetics of TurboTax or the individualized support of H&R Block.
Online Tax Software: Pricing & Features Comparison
*Average hold times from GetHuman.com
Other Online Tax Software We Considered
FreeTaxUSA is a bare-bones software that offers a free product for nearly every filing situation, though you’ll have to pay $12 to file state taxes and an additional $7 to gain access to customer support through live chat. These low prices are tempting, but the checklists of common questions aren’t well-organized and navigation buttons aren’t labeled consistently. In addition, the text itself feels more jargony than the friendly tax-partner language of our top picks — our tester likened it to filling out a form alone in a dentist’s office. For those who need less guidance, the software may be worth a look, but our top picks provide an overall better experience.
We were surprised to see just how much TaxSlayer has improved since last year. The company has totally revamped the design of their software, making it easier to navigate — not to mention way more visually appealing. However, the software only offers free access to the 1040EZ form. If you bought health insurance through an Affordable Care Act state or federal exchange, you’ll need to pay for access to the 1040A form. But if you know the 1040EZ is all you need, TaxSlayer prides itself on empowering users through a guided return process.
Did You Know?
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 before you have the chance to submit the return yourself. In 2014, the IRS prevented about $24 billion in attempted fraud but ended up paying an estimated $5.2 billion in fraudulent tax refunds.
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 goes a step further by sending a six-digit verification number to your phone or email whenever you login.
You can take steps to add security on your end, too. Keep clear of phishy emails; Shred old tax documents; Be extra suspicious of phone calls from the IRS (they could be scammers); Don’t file your tax info over unsecured wireless networks. If you really want to up your peace of mind, check out our review of the best identity theft protection services.
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 many software companies squeeze money from you is by charging for the privilege of re-uploading your tax info from the previous year or importing the information from your federal return over to your state return. And if you want to override any part of the process (say, your depreciation), you'll usually have to spring for pricier desktop versions of the products.
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.”
Companies have versions of their free software specifically for low- to moderate-income taxpayers.
The Free File Alliance is a nonprofit collection of 12 tax software companies that agreed to partner with the Internal Revenue Service (IRS) and provide free filing for low- and moderate-income taxpayers. The Free File versions give you access to more forms than you’ll find in a software company’s standard free option. The exact forms offered by each company will differ, but most Free File Alliance members offer free filing of most tax forms rather than limiting you to a 1040EZ or 1040A. What’s more, a few companies offer Free File software that will let you file federal and state taxes for free.
To be eligible for Free File preparation, the government mandates that your adjusted gross income be $64,000 or less. However, companies are allowed to make the same cutoff even lower for their individual versions of Free File software — the cutoff for TurboTax’s is $33,000. In fact, as long as they don’t exceed the government’s cutoff, each participating software company can set its own eligibility requirements which can be found on an IRS sponsored list.
So why doesn’t everyone know about Free File? Put simply, most companies don’t advertise their Free File options because it limits their ability to upsell or offer upgrades. In addition, Free File software is usually buried within the parent site or only accessible through the IRS site. For example, H&R Block only places their Free File option front and center after you manage to find it the first time. After you visit the Free File page, subsequent visits to H&R Block’s website will automatically redirect you to it.
Free File Alliance software isn’t available until January, but could be worth a look for many; At the last estimate, 70 percent of all taxpayers would qualify. When the software is available, you’ll see a “Start Now” button on the IRS Free File site to review the list of participating companies, and you must start the process on the IRS site in order to ensure you don’t pay fees. For those who may need more free forms than a 1040EZ or 1040A, it’s definitely worth a look.
The GOP tax reform bill won’t affect your 2018 filing.
At the beginning of November 2017, Republicans unveiled one of the most sweeping tax overhauls in decades, a bill called the Tax Cuts and Jobs Act. While it won’t affect 2017 taxes, there are some significant changes that will impact how much you’ll pay next year. A notable change is the penalties from the Affordable Care Act, says CBS News. “If you don't have health insurance, you won't have to pay the pretty hefty fee for not being covered.”
The Wall Street Journal writes, “The bill would cut taxes for most households, though those reductions wouldn’t be universal or permanent.” To start, whether you’re single or married, it’s likely that you’ll be paying a lower federal tax rate next year. The bill nearly doubles the standard deduction as well (increasing to $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly). To make up for these cuts, personal exemptions (currently $4,050 per dependent) will be completely eliminated, and you'll be unable to fully deduct state and local taxes, so some households in high-tax states could end up paying more.
These are the broad strokes, though — how your taxes will be affected depends on a myriad of factors. We recommend using a tax calculator to estimate next year’s changes.