The start of tax filing season is right around the corner. You might have already received some of your tax paperwork in the mail. And you’re probably thinking about which tax software option is the best for you?Well, we’ve been reviewing all the major options this season, including TurboTax, H&R Block, TaxAct, TaxSlayer, Credit Karma Tax, and more. Because of all the options, there is no “one-size-fits-all” for the best tax software. It all depends on what you have to file on your taxes. We’re breaking down the categories for each “type” of filer and which software makes the most sense for your situation. There’s nothing worse than spending 30 minutes thinking your taxes will be free, only to find out you need to upgrade to file!If there’s something you think we’ve missed, or don’t quite know which is best for you, let us know in the comments! We’ve seen them all, so we’ll try to point you in the right direction.Best Overall: is our choice for the best overall tax software. It’s either “best” or “runner-up” in most categories. And while other select products may niche down, most tax filers will find the combination of robust offerings, price, and the ability to go in-store if needed as a huge win. Check out H&R Block here >>
If you qualify for free file, you need to be taking advantage of it. The problem is, many tax programs advertise free file, but many don’t deliver. Even some of the major programs hook you with free file, only for you later to find out you don’t qualify because you have kids, or you have too many deductions, etc.Why: Credit Karma Tax is one of just two major tax software programs that provide free state and Federal filing for most tax situations. Credit Karma Tax is our top pick for free tax software this year because it has upgraded to a “semi-guided navigation” and fixed a lot of the issues that have plagued the service over the past few years. We’re still keeping an eye on the customer service, but the overall roll-out seems to be smooth so far.Credit Karma Tax has one of the most robust free file options. The software is easy to use, and it only has a few limitations. The service even offers a free audit defense from a third party.
Why: H&R Block Online Free Online Tax Filing has one of the easiest to use software services, and it has expanded what filers qualify for free. With H&R Block Free Online Tax Filing, you can still get free file if you’re claiming dependent related expenses, education expenses (including student loan interest deductions), and to claim the Earned Income Tax Credit (EITC). However, not everyone will qualify for free filing with H&R Block. For example, if you need to itemize or claim self-employment income, you will need to upgrade. By contrast, the winner, Credit Karma Tax, is free for all users.
In the United States, filers can deduct interest on student loans as an adjustment to income. That means you don’t need to itemize your taxes to claim the deduction.This year, we found two services that allow student loan borrowers to claim their deduction for free. Read our full guide to tax software for student loan borrowers.Why: H&R Block Online Free Online Tax Filing offers simple navigation navigation, and it allows you to deduct student loan interest for free. H&R Block is really easy to use, and it even offers an app where you can snap pictures of your forms. Then, H&R Block will figure out the numbers for you.
Why: Credit Karma Tax offers an easy-to-use service that’s free for all filers (who qualify). If you need to claim student loan interest, Credit Karma Tax makes it easy. Plus, you can claim any side-hustle or self-employment income for free too! That’s a great bonus for folks who are hustling to get rid of student loan debt quickly.
If you’re a homeowner or a charitable giver (or both), you may see a benefit from itemizing your taxes. Most of the time, people who are itemizing will need to pay for an upgraded service. However, our top choice in this category is actually free for all filers.Why: Credit Karma Tax allows users to file free state and Federal returns, even when you have to itemize your taxes. The software is easy to use, and a good alternative to paying $50 or more for a relatively straightforward return. The service offers a free audit defense from a third party.
Why: FreeTaxUSA is a decathlete of tax software services. It rarely tops the list, but it offers bargain basement pricing. Users who need to itemize taxes, will find that FreeTaxUSA is easy to use and simple to navigate. With FreeTaxUSA, Federal filing is free, and state filing costs just $12.95 per state.
The IRS released guidance for cryptocurrency investments in 2014, but it’s only been in the last year that it has clarified the guidance.That means that tax software systems are playing catch-up to help crypto traders file their taxes. Plus, there is a new question this year on everybody’s taxes that ask if you’ve ever mined or traded cryptocurrencies.These are the services that have delivered fastest and best results for crypto investors.Why: TurboTax makes it easy for Coinbase customers to import transactions into the tax software. Once you import your transactions, TurboTax does the math to help you declare profits and losses. As of this point in the year, TurboTax is the only major tax software service to create this partnership. You will need to upgrade to TurboTax’s Premier level to access this software.
Why: CryptoTrader.Tax isn’t a tax software, but it can help you figure out the tax implications of your virtual currency trades. If you’ve made fewer than 100 trades, you will pay just $49 to have a form 8949 created (necessary for filing taxes). Once you have your form 8949, you can use just about any software to file. The price for CryptoTrader.Tax increases steeply after 100 trades, so more enthusiastic traders may be better off using TurboTax to file.
Investors and traders typically want (or need) tax software that allows for import of 1099s issued by banks and investing brokers. Especially for investors with a large amount of transactions, it can be extremely tedious to manually enter everything into the computer. Furthermore, it also opens you up for more potential errors.Why: TurboTax is the winner for investors and traders because of the ease it is to import everything into TurboTax. Plus, TurboTax connects with the most banks and brokers that we’ve seen. If you’re concerned about importing a large number of investing transactions, TurboTax is your best bet. This also applies to individuals who use robo-advisors like Betterment or Wealthfront who may see hundreds of transactions per year due to tax loss harvesting.
Why: H&R Block is a close runner up to TurboTax when it comes to importing investment information. It also has a wide variety of import features that make it easy to use an appealing for investors.If you’ve used H&R Block in the past and want to continue to use it as an investor, you really can’t go wrong. It’s going to save you about $20 versus using TurboTax, and has many (but not all) of the import options. Not sure whether H&R Block will work for you? Start your free filing on the site to see if it will work.
Landlords have some of the most complicated returns, along with business owners. Keeping track of income, expenses, and depreciation on a property can be tedious, but they are essential for tax time.We look for software that makes calculating depreciation easy, and allows for easy import of prior year information to ensure continuity across returns.Why: TurboTax is the slight winner in this category. TurboTax handles rental property well, allows for easy import of past years information, and what sets it apart from H&R Block is that it connects with QuickBooks. So, if you use Quickbooks to manage your rental property, tax time is a cinch.
Why: Credit Karma Tax isn’t as slick or easy as TurboTax, but it is free. Landlords who have just a few rental properties may see a ton of value from using the free service. The depreciation and expense calculators in Credit Karma are accurate and fairly easy to understand. While you can’t import information into Credit Karma Tax, you can enter the right information relatively quickly (for a few properties).
This year, we’re separating side hustlers from small business owners because there is a difference we’ve been noticing in how returns can be handled for each. Side hustlers, in our tax definition, are people who are working in the gig economy on the side, or have small income on the side from selling stuff on eBay, etc.The interesting thing about side hustlers is that they use different expense tracking apps (like Everlance), and they may be eligible to file a Schedule C-EZ. Why: TaxSlayer has a great, easy to use interface very similar to TurboTax and H&R Block, but side-hustlers will pay half the cost or less compared to the premier software services.When you have just a few hundred dollars of extra income, and relatively easy to understand expenses, you don’t need to upgrade to the highest cost options.
Why: Credit Karma Tax allows side-hustlers to prepare their tax returns for free. If you’ve never dealt with self-employment income before, you may be a little confused using Credit Karma at first. However, Credit Karma does a great job serving up information bubbles throughout the software to allay your fears.
Small business owners have a lot to think about when it comes to their tax returns. Beyond just entering income and expenses, there are considerations around business structure, asset depreciation, individual retirement plans, and more.While many small business owners would likely benefit from an accountant, those that want to DIY it need to have software that is up for the challenge. Why: TurboTax has held the title of best tax software for small business owners, and it continues the trend. TurboTax is great for many reasons, but we love the easy to use interface, the connectivity with Quickbooks, and the ability to easily calculate the maximum contribution you can make to a solo 401k. Plus, when you use Turbo-Tax self-employed you’ll get free access to Quickbooks in 2020.
Why: FreeTaxUSA doesn’t have the guidance that TurboTax and H&R Block have, but it is easy to use even for small business owners. The built-in depreciation and expense calculators make a lot of sense to less experienced filers.Since none of the more expensive software services have connections to accounting software, you may as well get a bargain as a small business owner. FreeTaxUSA costs just $12.95 per state.
While we don’t recommend you get a tax refund anticipation loan, we also know we’re not your mother and can’t tell you what to do. Over 10 million people will get a tax refund anticipation loan – and historically that’s meant going into a physical H&R Block or Liberty Tax office and filing your return.However, a few companies are changing the game this year, allowing for eligible filers to get a tax refund anticipation loan online if they qualify. This is a game changer because it significantly lowers the cost to filers. When filers go into a branch, they’ll typically pay over $300 to process their return. Online, you can get this done for $17!Why: The H&R Block Tax Refund Advance is available up to $3,500, and is available starting January 4, 2020 in stores. You can get $25 off your tax prep by showing this coupon special to College Investor readers. Here’s what else you need to know about the Tax Refund Advance:
Why: Liberty Tax offers the Easy Advance, where you can get anywhere from $500 to $6,250. The following loan amounts are available: $500, $800, $1,300, $2,500, $3,000, $4,750, $6,250. Your loan amount options are based on your expected Federal refund less authorized fees. You can get the Easy Advance starting on January 2, 2020.
If you’re an experienced filer, maybe you don’t care about a good user interface, easy navigation, and helpful knowledge articles and tutorials. Maybe you just want the forms, and want them for the cheapest price possible!Well, if you’re simply an experienced tax filer that wants the best value, here you go.Why: FreeTaxUSA doesn’t have the guidance that TurboTax and H&R Block have, but it is easy to use and offers access to all major tax forms. With free Federal filing, and $12.95 for state filing, you’ll be hard pressed to find a better deal (although you may qualify for Credit Karma Tax). FreeTaxUSA offers consistently great software at a low price.
Why: Credit Karma Tax is completely free, and is an amazing software product for experienced filers and beginning filers alike. The one drawback to Credit Karma Tax is that it doesn’t cover all tax situations. If you moved in the middle of the year, or you have a K-1 form, or you have foreign investments, you’ll need to consider other options. But outside of those scenarios, we’re impressed by Credit Karma Tax this year.
If you need support for your taxes, there are companies out there that offer amazing support options for a price. For online and phone help, to even offering in-person help, here’s where you can go to get help and support for your tax return questions.
Why? TaxSlayer Premium is a moderately priced software with massive value for filers looking for support. It comes with unlimited “Ask a tax pro” options where you can get support from a tax professional (either an enrolled agent or a CPA). It also comes with audit defense support, and unlimited technical support. Given the price, TaxSlayer Premium offers an almost unbeatable value.
Why? Liberty Tax Online is more expensive that most other tax filing options, and the interface has historically been okay but not great. But, you do get one thing that nobody else offers for that price – you can have your tax return reviewed by a professional at their office before you file.In some ways, this is a way for Liberty Tax to upsell you, but in other ways, it can give you the support and peace of mind that your return is accurate before you file.
Maybe you want someone to do your taxes but you don’t want to go to an office and wait. Or having to schedule an appointment – such a waste of time! Today, there are companies offering virtual tax preparation – where you get have a real tax pro (an EA or CPA) prepare and file your taxes for you.In many cases, these services are easier and cheaper than going to a real tax office.Why? This is the third year of TurboTax Live (where it’s been available to everyone from the beginning), and it’s seen a lot of success. You are connected with a real tax pro, and they answer questions about your return. You have to do the leg work of entering your information into the software, but you have help at every stage. If you’re considering a CPA, but you want to try TurboTax Live, you’re likely to save hundreds of dollars while maximizing your return.
Why? H&R Block Tax Pro Go is a very similar product to TurboTax – you simply upload all your documents and a CPA or EA will handle it from there.You do get to select and book your own tax professional, and the app gives you an ETA up front (right now it’s about 5 days). However, it is slightly more expensive than using TurboTax, especially when you are self-employed.
As you can see, there is no “blanket” best tax software. It all depends on what you have on your tax return. Each software program tries to pick a niche and own it. But there is a lot of competition.Also note: prices and deals change all tax season. We try our best to assess, but things do change as the tax season goes on. So, if you see any changes, please let us know in the comments below!