If you’re like most Americans, you dread filing your taxes. You have to track down the right forms, deal with the IRS, and try to remember all your deductions and credits. That’s why so many people turn to online tax software to help file taxes. Great tax software simplifies the filing process without draining your pocketbook. But choosing the right software can be as much work as filing your taxes.
To help you choose the right software, we’ve tested 11 of the leading online tax software packages. We’ve ranked each software on the following criteria: usability, helpfulness of support articles, availability of audit support, and accessibility of tax and technical support. Then, we compared these criteria to the price to determine which software package is best for your situation.
Which tax software fits your needs? Find out below.
Best Tax Software of 2016
Best Free Filing Service
Of the 11 tax software packages we reviewed only two allow all users to file state and federal taxes for free.
Best Software: Credit Karma Tax
Credit Karma Tax features an outstanding user interface with easy interview questions. The built-in calculators make Credit Karma appropriate for even complex filers. You can’t import information, and Credit Karma doesn’t have robust help, but it’s easily the best software you can use for free.
Runner-up: DIY Tax
DIY Tax is a joint partnership between Liberty Tax Services and eSmart Tax. Their user interface is clunky, but it has all the functionality you need. Their software interface allows you to import prior tax returns, and they have excellent support articles.
Best for Simple Filing
Simple filers are W-2 employees who claim the standard deduction. You typically file as Single or Married Filing Jointly. You don’t have dependents, and you earn less than $100,000.
Best Software: TaxAct, free edition
TaxAct offers completely free state and federal filing options for simple filers. However, they do charge $10 for prior year import. The user experience is easy, and TaxAct offers free tax and technical support.
Runner-up: Credit Karma Tax
Credit Karma Tax offers free filing for all users, and they have an easy-to-use interface. While they only offer email tech and tax support, Credit Karma allows simple filers to explore more complex credits and deductions for free.
Best for Maximizing Deductions and Credits
Charitably inclined people, most homeowners, parents who pay for child care, and people who qualify for the earned income tax credit may want to maximize deductions and credits.
Best Software: Credit Karma Tax
Most software packages require you to upgrade to itemize deductions or claim credits. With Credit Karma Tax you can claim them for free. The only problem with Credit Karma Tax? If you fail to qualify for a credit, they don’t offer great explanations.
Runner-up: TaxSlayer Classic
TaxSlayer Classic offers federal filing for $17 and state filing for $22. The software is easy to use and intuitive. It even allows you to upload your W-2 form. For maximizing deductions and credits, you won’t find a better software for the price. TaxSlayer gives you access to technical support, but you need to upgrade to ask tax-related questions.
Easiest for New Filers
We assume that new filers have simple forms to file, but they want a clear user interface and ready access to tax and technical support.
Best Software: 1040.com EZ
1040.com offers free federal filing, and state filing for $9.95. Normally, we don’t recommend paying for a service that you can get for free elsewhere, but new filers will love 1040.com’s user interface and live chat support. Their tax and tech professionals can quickly guide you if you get stuck.
Runner-up: Credit Karma Tax
Credit Karma Tax has an excellent user interface that you can use for free. Even new filers can use the interview questions to determine whether they qualify for credits or deductions. Unfortunately, Credit Karma only offers email support.
Best Audit Protection
The IRS has the right to audit anyone, but people with complex taxes run a greater audit risk. No tax software (or accountant) can prevent you from getting audited. However, some tax software will give you access to a tax specialist or accountant if you undergo an audit. These are the software services that can lend a hand if you need it.
Best Software: FreeTaxUSA Deluxe
FreeTaxUSA Deluxe costs $6.99 for federal filing and $12.95 for state filing. FreeTaxUSA does not feature an intuitive user interface, but they have built-in calculators that most complex filers need. They also promise to give you personal assistance if you’re audited. If you can stand the software, it’s the best price for audit protection.
Runner-up: TaxSlayer Premium
TaxSlayer Premium costs $35 for federal filing and $22 for state filing. At the Premium level, trained tax professionals will help you if you’re audited after using the TaxSlayer software. The software is generally easy to use. However, the amortization and depreciation calculators can be confusing.
Best for Investors
If you buy and sell stocks, bonds, or options outside of your tax-advantaged retirement accounts, you need a tax software that can handle all your information. Tax software for investors needs to handle dividends as well as short-term and long-term capital gains.
Best Software: H&R Block Premium – Online version
H&R Block Premium online software costs $54.99 for federal filing and $36.99 for state filing. But the price is well worth it in this case. H&R Block allows you to import all major forms from many financial institutions. If you actively trade, you need this capability. H&R Block also has accurate accounting for short-term gains and losses, which will help investors minimize the tax they owe. H&R Block also has helpful community forums and unlimited real-time chat support if you need help.
Runner-up: Credit Karma Tax
Credit Karma Tax offers a free solution for all kinds of investors. You must manually enter all your trading information, but Credit Karma calculates capital gains and losses and the appropriate tax rate. It’s a decent (and free) solution for less active investors.
Best for Real Estate Investors
Real estate investors need to calculate depreciation. They need to amortize certain expenses and deduct others. This can be confusing for DIY tax preparers. The best tax software for real estate investors needs to feature helpful support articles, intuitive depreciation and amortization calculators, and as many import features as possible.
Best Software: TurboTax Premier
TurboTax Premier costs $54.99 for federal filing and $36.99 for state. The real estate portion of TurboTax is second to none. If you use QuickBooks software to manage your real estate accounting, you can connect it directly to TurboTax. If you don’t, you can still upload a Schedule E or use the robust calculators.
Runner-up: H&R Block Premium
H&R Block Premium also costs $54.99 for federal filing and $36.99 for state. The software allows users to import many documents including an entire Schedule E. The depreciation and amortization calculators offer standard inputs, but they are flexible enough for special events. H&R Block also makes it easy to import last year’s tax return. Most real estate investors need this to accurately report depreciation.
Best for Self-Employed People
Are you a freelancer or contractor? If so, you know that you can deduct many business-related expenses. This means that taxes can get messy in a hurry. The best tax software for self-employed people makes it easy to claim business deductions. It will also offer robust explanations that will help you understand amortizing equipment expenses and whether you qualify for a home office deduction.
Best Software: Credit Karma Tax
Credit Karma Tax makes it easy for you to find and deduct appropriate expenses if you’re self-employed. Their built-in amortization calculators are easy to use, and Credit Karma offers helpful explanations. Outside of the most complex self-employment situations, Credit Karma is a simple filing solution.
Runner-up: Jackson Hewitt Basic
Jackson Hewitt Basic software offers one of the lowest cost Schedule C-EZ forms if you’re self-employed. The cost is $19.95 for federal returns and $36.95 for state returns. Their extensive support articles and helpful interface mean that you can find the help you need at the right price. Plus, you can get unlimited live chat support from technical assistants. If you need help from tax experts, you will have to pay for a consultation at a local Jackson Hewitt office.
Best Bargain for Self-Employed People
When you’re self-employed, you don’t always have the luxury of choosing the best-value product. Sometimes, you just need the cheapest product that will get the job done. If that’s you, these are the software products you should consider.
Best Software: Credit Karma Tax
Credit Karma Tax is the best 100% free option if you’re self-employed. It offers all the functionality you need.
Best Software: FreeTaxUSA
FreeTaxUSA allows free federal filing and $12.95 state filing. Their calculators and website are adequate for self-employed people. This software allows you to deduct mileage, amortize expenses, and categorize meals and entertainment. FreeTaxUSA isn’t beautiful, but it gets the job done at a low price. If you upgrade to Deluxe, you’ll even get audit assistance.
Best for Small Businesses
Sole proprietors and single member LLCs can also use tax software for self-employed people. As long as the software supports a Schedule C, it will work for your small business needs.
If you’re part of a partnership, a corporation, or a multi-member LLC, then you need more than the standard tax software that we reviewed above.
Corporations need software that supports Form 1120. S Corporations (with more than one member) need tax software that supports Form 1120S. Partnerships and multi-member LLCs need software that supports Form 1065.
If you need business tax software consider one of these options.
$149.99 federal (up to five federal e-files); $49.99 per state + $24.99 per state e-filing fee.
TurboTax Business offers the same interview style interface that consumers love, but it offers increased functionality. Small business owners will especially love that they can use it to create unlimited W-2 forms and 1099-MISC forms.
$79.95 federal (up to five federal e-files); first state software free, after that: $35 per state + $19.95 per state e-filing fee. H&R Block offers an excellent interview style user interface with increased functionality such as creating employee forms. This software supports the major forms for businesses, plus the form for nonprofit organizations.
TaxAct bundles federal and state filing and software for a total of $100. You can purchase federal filing only for $60. TaxAct has a slightly more stripped-down user interface than H&R Block or TurboTax, but business owners can easily complete everything. You can even create as many employee tax forms as you need.
Tax Software Pricing, Plans, and Insights
Credit Karma Tax
Credit Karma Tax offers free federal and state filing for all users. With a robust and easy-to-use interface, it’s an excellent default choice for most filers. Their guided path through the tax software is as good as the most expensive tax software on the market. But it has a few shortfalls. You can’t import your prior year’s taxes. This makes year-to-year comparisons impossible within the software. You also can’t import any forms, which can be a pitfall for active traders and real estate professionals.
Credit Karma offers tax and tech support via email. They currently have at least a 3-day wait time for answers. Credit Karma doesn’t offer audit support either.
Superlatives: Best Free Filing Service, Best for Maximizing Deductions and Credits, Best for Self-Employed People, Best Bargain for Self-Employed People, Runner-up Best for Simple Filing, Runner-up Easiest for New Filers, Runner-up Best for Investors
DIY Tax offers 100% free federal and state filing for everyone. Their user interface is a bit clumsy, but it proves accurate and usable. They even allow you to import your prior year’s taxes for your reference. Real estate investors and small business owners need to be careful with this platform. The depreciation and amortization calculators can be confusing. Their software offers technical support, but they push Liberty Tax Service offices for tax support. The software doesn’t come with an audit support guarantee.
DIY Tax is sponsored by Liberty Tax, and you will see ads for their offices in the software. Remember, filing in a Liberty Tax office isn’t free.
Superlatives: Runner-up Best Free Filing Service
eSmart Tax and DIY Tax are the same software package. However, you have to pay for eSmart Tax. Why would you pay? The Deluxe and Premium packages offer unlimited phone or email support from tax specialists, which can prove helpful. But in most cases eSmart Tax isn’t a great option.
|Price||$0 Federal $29.95 State||$14.95 Federal
|Best For||1040EZ||Homeowners, people with dependents, sole proprietors||Stock market investors without capital gains or losses||Freelancers, real estate investors, people who sold a home in the previous years|
TaxSlayer has an incredible user interface and helpful support articles. When it comes to itemizing deductions or finding credits, it is one of the easiest to use tax software packages on the market.
Unlike most tax software, TaxSlayer supports all forms on its second-tier Classic level. This means that anyone could complete their entire tax return at a relatively low price. Their Premium level gives you access to live chat support, audit protections, and help from tax professionals.
However, TaxSlayer has two demerits. First, you cannot import a prior year’s tax return from a competitor. The only tax information you can use is information you entered into TaxSlayer during a previous tax year. Second, TaxSlayer doesn’t allow you to see internal calculations for depreciation and amortization. That makes TaxSlayer inappropriate if you’re a real estate investor or self-employed.
$0 First State ($22 each additional)
|Best For||1040EZ||All others (itemizers, stock market investors, real estate investors, self-employed, etc.)||Comes with audit assistance, ask a task professional, and live chat support|
Superlatives: Runner-up Best Audit Protection, Runner-up Best for Maximizing Deductions and Credits
When does free really mean free? When it comes to simple tax filing through TaxAct. People who file a 1040 or 1040EZ can file federal and state taxes for free through TaxAct. Even if you don’t qualify for free filing, TaxAct usually represents an excellent value. At any level, you can receive phone and email support from tax and technical professionals. TaxAct doesn’t offer audit support, but it is priced accordingly.
For the most part, TaxAct simplifies tax filing. It uses simple questions, helpful knowledge articles, and easy navigation to help you complete your taxes. They even make it easy to import your prior year’s taxes into their software. TaxAct also offers some of the best guidance if you’re a stock market investor or self-employed.
Despite all these praises, the software stumbles somewhat on its real estate coverage. The depreciation calculator seems clumsy in certain areas. Outside of this flaw, TaxAct offers tremendous value for the price.
|Best For||1040EZ, 1040A (no dependents, claiming standard deduction)||Itemizers, stock market investors||Self-employed, real estate investors|
Superlatives: Best for Simple Filing
OLT.com offers bargain basement pricing, but it shows in the interface. You have to pay $7.95 for tax and technical support. Nonetheless, the $7.95 also brings audit support, which offers some value.
Their clumsy user interface only allows you to import prior year tax forms from its own database. Their support articles send you to the even more confusing IRS website.
However, OLT.com offers a few bright spots. The health insurance coverage is easy and accurate. It is the only tax software that makes it easy to claim the premium tax credit for part of the year. Also, the real estate depreciation calculators are flexible enough to deal with complex circumstances.
In most cases, we don’t recommend OLT.com, but a few people may benefit.
|Best For||All major schedules supported||Anyone who wants audit support|
Superlatives: Best Interface for Health Care Premium Tax Credit
According to 1040.com, tax filing should be smart and simple. If you’re a new filer or a freelancer with basic expenses, 1040.com delivers. 1040.com offers free live chat and email technical support. They also have support articles that are approachable and informative.
In fact, their entire software is friendly and informative. New filers are likely to appreciate the high-quality and low-cost support from 1040.com, but other simple filers can find better deals elsewhere. Their friendly interview style interface starts to falter if you’re a real estate or stock market investor. You will need to add forms that don’t have built-in calculators. This means that 1040.com is best for people with less complexity in their filing.
|Best For||1040EZ||Stock market investors||Self-employed, real estate investors, itemizers|
Superlatives: Easiest for New Filers
H&R Block Online
H&R Block is one of the biggest names in tax software for good reason. People with complex tax returns will love the value that H&R Block offers. H&R Block offers unlimited technical support to all filers, and phone and chat tax support for those who pay. The only disappointment is that H&R Block online filing customers do not get a free in-person audit support. This is reserved for those who purchase a $79.99 “Best of Both” upgrade or who download H&R Block’s software.
However, the H&R Block interface offsets this disappointment. H&R Block offers easy navigation, helpful interview questions, and robust articles that can help you untangle even the most complex filing situation. H&R Block’s built-in calculators are flexible enough to deal with uncommon filings. Plus, you can import most major forms, including prior year’s tax returns from competitors. This makes H&R Block ideal for anyone with complex filings.
Their software isn’t quite as easy to use as TurboTax, but it’s quite a bit less expensive. In particular, freelancers and self-employed people with basic expenses will see huge value since they can purchase the Deluxe edition.
|Best For||New filers, basic filers (allows for earned income tax credit), homeowners||Stock market investors, self-employed with basic expenses, other itemizers||Real estate investors, self-employed with more complex expenses|
*Deluxe and Premium filers can upgrade to a $79.99 “Best of Both” package. This means that a CPA will review your return and you’ll receive in-person audit assistance.
Superlatives: Best for Investors, Runner-up Best for Real Estate Investors
If you’re looking for the Cadillac of tax software, TurboTax emerges as the winner. Their interface is easy to use and navigate. TurboTax even allows you to import last year’s taxes from any of their competitors. 1040EZ filers will even get to file federal and state returns for free. After that, the price climbs quickly. But for many filers the high price is well worth the cost.
The interview style format makes tax filing simple, even if you’re facing a complex situation. Paying customers who get stuck can get help from tax or technical professionals. TurboTax takes their support seriously. With your permission, support staff can “draw” on your screen to guide you through tough situations.
Real estate investors, self-employed people, and small business owners will appreciate TurboTax’s robust interface. The one thing they won’t appreciate? The price of audit support. TurboTax’s MAX costs $44.99. This is the only way to get audit support from TurboTax this year.
|Best For||1040EZ/ 1040A||Itemizers||Investors, real estate investors||Self-employed|
*Anyone can upgrade to TurboTax’s MAX for $44.99.
Superlatives: Best for Real Estate Investors, Runner-up Best Interface for Health Care Premium Tax Credit
FreeTaxUSAand TaxHawk offer the same tax software at the same price. They are owned by the same parent company, and you can even move your profile from one site to the next. The websites aren’t pretty, but experienced filers will find everything they need to complete their taxes. You can even upload prior year’s tax returns from competitors. This is a huge value given the bargain basement pricing.
FreeTaxUSA offers two pricing tiers. Both levels support all major tax forms. You can also access chat support from tax and technical specialists from both levels. However, upgrading will give you priority access to specialists. Upgrading also gives you access to a tax specialist if you’re audited.
The name might lead you to believe you’re getting free tax filing, but you’ll have to pay at least $12.95 for state filing. Nonetheless, FreeTaxUSA is a great bargain — especially if you have a complex filing situation.
|Best For||All major schedules supported||Anyone who wants audit support|
Superlatives: Best Audit Protection, Best Bargain for Self-Employed People
Jackson Hewitt Online
Jackson Hewitt brings the neighborhood tax filing office online. They feature excellent knowledge articles and easy interview style tax filing. It’s easy to import your taxes from any major competitor or from Jackson Hewitt. This makes switching to Jackson Hewitt Online easy.
Built-in calculators make depreciation and amortization easy. However, Jackson Hewitt doesn’t offer many import options. This makes their relatively high pricing difficult to justify. Simple filers (1040EZ) and self-employed people with basic expenses may see high value in the Jackson Hewitt software. After all, they offer live chat tech support to all their customers. If you need tax support, you’ll have to upgrade to Premium to get the phone support.
Jackson Hewitt also allows online filers to pay extra for an in-person tax consultation. Prices for these meetings vary by location.
It’s important to note that this review is only for the online Jackson Hewitt software package. Magnify Money did not review Jackson Hewitt office preparations.
|Best For||1040EZ||Freelancers||Investors, families with dependents, homeowners, itemizers||Small business owners, real estate investors|
Superlatives: Runner-up Best for Self-Employed People
Tax Software FAQs
Is online tax software safe?
Tax-related identity theft is the number one reported form of identity theft. However, most theft isn’t the direct result of using online software. Any time you apply for a credit card or use online banking, your information enters the digital world. If this information gets stolen, you’re at risk. Nobody can eliminate the possibility of identity theft, but you can work to protect yourself.
Part of protecting yourself involves only giving out your information on trusted websites. When you file your taxes, you provide all your personally identifiable information to a software service. You need to know whether or not that information is safe.
Every software company that we reviewed is an Authorized IRS e-File provider. This means that these sites comply with the security and business standards set forth by the IRS.
None of the software packages we reviewed will sell your personal information to a third party. Each of the software packages we reviewed requires you to use multi-factor authentication. This makes it difficult for hackers to access your personal information. These websites are as secure as possible, but they are not 100% safe.
If you think you’ve been the victim of tax fraud, contact the IRS immediately at 1-800-908-4490 to work with their resolution specialists. You will need to file an identity theft affidavit that explains that someone filed taxes in your name.
What if I don’t want to use tax software?
If you don’t want to use tax software, you can choose a paper filing option. Each state requires you to mail your check to a different office.
You can also use the IRS’s free electronic fillable forms. However, these offer limited guidance and can be difficult to use. With so many other free options, these should be a last resort.
Finally, you can hire a professional tax preparer to do your taxes for you. Be sure that the person you hire is in the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
Should I hire an accountant?
An accountant can save you time, headache, and in some cases, money. Tax professionals must follow the tax code, but their specialized knowledge helps them pick up on deductions or credits that you might miss on your own.
In general, the more complex your tax return, the more you may want to hire an accountant. If you choose to hire an accountant, be sure that they are an authorized tax return preparer. They should sign your return as an authorized preparer.