The 2020 tax season is upon us, and if it has you feeling anxious and overwhelmed, you're not alone. Maybe you're thinking back to last year's filing deadline, when you were scrambling at the last minute to gather all your forms and trying to navigate federal and state income tax codes. Sure, you were saving money by not hiring experienced tax preparers for help, but now you're wondering if it's worth it rather than go through the hassle all over again before filing taxes.
From figuring out tax deductions to taxable income to self-employed tax to capital gains to your student loan, tax prep and filing taxes can be complicated. But hiring a one-on-one professional tax preparer can be extraordinarily expensive.
The good news is that there are many tax software providers and filing companies that aim to make filing taxes -- from reporting your taxable income, setting up direct deposit and going through your itemized deductions -- easier and more affordable. Whether it's through an online form, downloadable software or an app, you can turn tax prep and filing into a less laborious process. For the frugal taxpayers out there, you can even find free or super low-cost options for doing your taxes online that rival some of the more established competitors.
Choosing a tax prep and filing software that's right for you and your income can seem complicated and time-consuming. But we've waded through all the features and fine print to show you some of the best tax software suited for taxpayers' needs.
Read more: How to estimate your 2020 tax refund
There's something for all filers with TurboTax -- the company offers a myriad of options even if your tax situation is complicated. A bonus for tax filers who use Quickbooks (hello sole proprietors!): You can connect it to TurboTax, useful for self-employed people or real estate investors. And if your tax situation isn't complicated (requiring lots of itemized deductions or advice on taxes, for instance) the user-friendly interface makes it simple to breeze through tax prep. TurboTax Deluxe, its most popular option, searches deductions and looks for a tax credit to get you your maximum refund. And TurboTax Premier is specifically designed for investments or rental property.
It's hands-down the best tax software for live personal support -- a must for many people when they're filing taxes online. For an extra fee, you get TurboTax Live where filers can receive help from a certified tax professional through on-demand support via live video chat. A CPA or EA will also review your tax return before it's sent off to the IRS, ensuring you're making the proper deductions and just making sure your tax situation is under control. . Max, its audit defense option, offers a dedicated specialist to represent you. It also includes identity theft coverage services such as identity loss monitoring and insurance. Not too shabby for an e-file provider.
Read more: IRS stops TurboTax from hiding free tax-filing products in searches
One caveat is that you will probably pay more compared to the others on our list. There is a free version, however, for those who only need basic requirements and it's one of the few places where you can enlist the help of certified tax specialists without seeing one in person.
Pricing: Free to $120 for federal; $45 per state; additional $60 to $90 for TurboTax Live; additional $50 for Max
It's not as intuitive to use as TurboTax, but H&R Block is another heavy hitter that offers some decent features such as unlimited technical support to filers, plus phone and chat support for higher tiered customers who need a bit of help on their DIY tax adventure. You get to wade through simple questions, built-in calculators to help with many tax situations and detailed articles to sort through your individual situation -- even if it appears complex.
Read more: 12 of the best tax deductions
We like that you can file your taxes online, in-person, via its app or by downloading its software. You get a 60-day 100% satisfaction guarantee, import prior year's tax returns from other companies and a 4% refund bonus if you receive it via an Amazon gift card. For an additional fee, filers get a certified tax pro to review their tax return before filing it.
The downside is that filers don't receive free in-person support for audits -- only those who purchase H&R Block software or the Tax Pro Review service will get this benefit.
Pricing: Free to $105 for federal; Tax Pro Review $145; $30 to $40 per state
Aside from its simple tax-filing interface and thorough knowledge articles, Jackson Hewitt Online offers built-in calculators to help filers figure out amortization and depreciation, plus free IRS audit assistance. If you prefer filing in person, you can opt into its Worry-Free Guarantee plan, where you could be reimbursed if you receive a reduced refund or face additional tax liabilities. The Worry-Free Guarantee Platinum tier includes Audit Security where a dedicated specialist manages and represents your case.
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That being said, to filers looking to do their taxes online, you will not find much here that isn't offered elsewhere -- the ability to import taxes from competitors, tech support via live chat, a free option and auto completion of state returns.
Pricing: Free to $50 for federal; $40 per state
TaxSlayer supports all tax forms on its Classic level and above. Even if you use the free version, customers can access tax advice via its educational tools, phone and email support. Higher tiers, such as TaxSlayer Premium, get access to audit protections, assistance from tax professionals and live chat support.
Read more: Manage, save and invest your money with these apps
If you're a real estate investor or own a rental property, be aware there aren't calculators for amortization and depreciation, nor are there audit protections for self-employment income. The major perk is that TaxSlayer offers a no-interest advance on your tax refund -- receive either $500 or $1,000 once the IRS accepts your filing and receive the funds on a Green Dot Prepaid Visa card in as little as 24 hours. Once you receive your refund, Tax Slayer will deposit the rest after deducting your advance and any applicable fees.
Pricing: Free to $47 for federal; $29 per state
While some other free tax filing software charges for state returns, Credit Karma Tax doesn't. Instead it gives you a user-friendly interface, helpful guidance to explain tax-related terminology and live chat technical support. Credit Karma also claims to have more features compared to TurboTax's free option, including filing for mortgage interest, property tax and student loan interest deductions.
Read more: Where to file your taxes for free
Other features include audit defense, where customers can receive services such as a consultation from a representative who can also attend a hearing on your behalf and help with tax debt resolution options. If you end up receiving a larger tax refund or owe less in federal taxes after filing with Credit Karma, you may be able to receive up to $100 in gift cards.
Credit Karma's tax software has its limitations -- you can't import a tax return from a competitor. To start filing, you need to grab the IRS transcript of last year's tax return.
On all paid tiers, TaxAct users can receive guidance from a tax specialist as an add-on option, much like TurboTax offers. Depending on the tier you could receive unlimited one-on-one phone or in-app chat support and screen-share capabilities. It's simple to import last year's taxes, navigate through its platform and browse through its knowledge database as you input your itemized deductions.
Read more: Tax day frustration: Why can't the pros keep up with financial tech?
Where TaxAct shines is its $100,000 Accuracy Guarantee -- receive up to $100,000 for any difference in liability or refund, IRS penalties and interest, plus a refund for TaxAct software fees. This feature might make it the best tax software for you if you have a high taxable income or a complicated tax situation where you feel errors may be likely.
Pricing: Free to $80 for federal; $15 to $80 tax specialist support; $40 state filing (except free tier)
Comparable to Credit Karma Tax, FreeTaxUSA is mostly free except you need to pay when filing state taxes. It's a little more user-friendly since it offers options for importing previous tax returns from competitors and filing an amended tax return. Most tax forms are supported and the deluxe version gives you added perks such as priority live chat and customer support, filing unlimited amended returns and receiving access to its audit service, giving you access to tax specialists. These professionals will be able to address your specific questions, including how to understand an audit notice, paperwork you need for taxes and assistance in writing a response to the IRS.
Pricing: Free for federal; $15 per state; $6.99 deluxe version
Originally published earlier.
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