For some people filing their taxes can be quite a challenge, but it is crucial to do so accurately, especially if you own a small business or struggle to keep your documents in order. Therefore, it’s no surprise that online tax filing software has become increasingly more popular. Not to mention these services claim to be able to secure users an even bigger refund.
But is tax filing software genuinely worth the cost? Do they really help save time, hassle, and money? After analyzing roughly two dozen online tax solutions, this review has compiled a top 10 list based on affordability, thoroughness of the filing system, and interface accessibility.
How the Best Online Tax Filing Providers Were Evaluated
Price - Spending money to save money is not an easy decision. That’s why this top 10 list made sure to take into consideration (and include) tax software that offered free and low-cost plans.
Features - No matter the software, a range of useful tools and features are a must. As such, software with additional tools designed specifically to make filing one’s taxes easier and less time-consuming scored higher on this list.
Interface - Not everyone is tech-savvy and able to navigate complicated web-interfaces and tools. Therefore, for the purpose of this review, it was important that every top pick was easy to use, with some options being suitable for complete beginners.
Thoroughness - Tax software aims to reduce filling time and decrease the chance of errors that could lead to audits, fines, or other injunctions. That’s why sites that guaranteed thoroughness, accuracy, and speed were preferred other others.
1. TurboTax - Best Overall Tax Filing Software
TurboTax by Intuit is easily the number 1 choice because of its extremely user-friendly interface and its accuracy in the filing process. It includes a Free, a Premier, and Self-Employed Plan.
Excellent customer service
Available on mobile devices
More expensive than the industry average
With the free plan, you have access to the filing of simple federal and state tax returns that include W-2 income, Earned Income Tax Credit, and child tax credits. You can also import PDF forms from other tax software solutions as well. With the Premier Plan ($90+ $50 per state filed), stocks, bonds, ESPPs, and rental property income are included.
With the Self-Employed Plan ($120+%50 per state filed), you have one-on-one assistance from self-employment specialists. Although it costs slightly more than the industry average, small businesses are provided with numerous features such as the possibility to search for industry-specific deductions and access to expense, mileage, and job tracking.
Not to mention that TurboTax also offers personalized support in case of an audit. This service is available online and to download on iOS and Android devices, making it easier to check the status of your return on the go. With TurboTax, you can rest assured that the accuracy of the filing is 100% guaranteed.
2. Taxslayer - Most Affordable Online Tax Filing Software
Launched in the early 1990s by Rhodes-Murphy & Co for tax preparers and accountants, today, this online tax preparation service counts roughly 200 employees. It boasts over 10 million tax returns per year and is one of the most affordable solutions compared to the others examined.
Most affordable tax preparation service
Filing is reviewed by professionals
On-screen explanations are often not as thorough
The Free plan includes W-2 income, student loan interest, and education expenses. The Classic plan ($17+$39 per state filed) includes all the income types and credits such as the Earned Income Tax Credit and Child Tax Credit. The Premium Plan ($37+$39) provides access to IRS Audit Assistance for three years and priority phone and email support.
The Self-Employed plan ($47+ $39 per state filed) offers guidance with 1099 income, personalized advice, and quarterly estimated tax payments reminders.
Unlike other services, this company matches you to professionals who can review your tax return. And it offers its customers reimbursements in the case of federal or state penalties or if interest charges are incurred, and in the case that customers do not receive the maximum refund.
3. H&R Block - Best Online Tax Filing Software for Small Businesses
Founded in 1955, H&R Block is one of the most acclaimed tax preparation company for small businesses. It’s well renowned not just in the United States, but also worldwide, with more than 12000 branches. Along with tax preparation services, this company also offers payroll and business consulting services.
Brick-and-mortar locations worldwide
Schedule 1,2 and 3 are free
The interface could be better
H&R Block tax preparation software is very similar to TurboTax. It is a cheaper solution with a less intuitive interface compared to Intuit's software. Clients follow a step-by-step filing process to request their documents to be reviewed by an accountant at an additional fee.
The Free Plan allows clients to import forms with a picture, and it includes Earned Income Tax Credit, Child care expenses, student loan interest, Social Security, and retirement plan income.
The Premium plan ($69.99 + $44.99 per state filed) allows customers to import expenses from third party expense tracking apps and includes stock sales income and rental property income. With the Self-Employed plan ($104.99+ $44.99 per state filed), clients can include small business expenses like a home office, asset depreciation, and vehicle expenses.
Uber drivers can also import your driver's tax information. Lastly, what differentiates H&R Block from TurboTax is that customers can easily go to a brick-and-mortar H&R Block location to have in-person support. Besides, the Free plan includes more forms than the industry standard.
4. E-file - Fastest Online Tax Filing Software
E-file is an authorized IRS e-filing platform that offers fast, easy, and accurate filing. Although the paid services are still on the affordable end for the industry, E-file also offers free federal electronic filing.
Fast and simple
Refile at no extra charge if the tax return is rejected
Free federal electronic filing
Not available for mobile devices
No free state options
It also presents a few limitations for taxpayers looking for more advanced and efficient tools that might steer customers away from relying on E-file for their tax filing needs. The free package offers free federal electronic filing.
The premium package allows customers to report investment and business income at a lower price compared to TurboTax and H&R Block, although it lacks the sophistication that the competitors have.
This software is ideal for anyone who knows their way around all tax-related matters and doesn't require too much help. A tax "expert" is available, but the wait time for an answer can be quite long.
Therefore, if you are looking for affordability and don't mind doing things on your own, E-file won't disappoint. Lastly, if the IRS rejects your documents, E-file offers the possibility to refile free of charge.
5. Jackson Hewitt - Second-Largest Online Tax Filing Company
Founded in 1982 by John Hewitt, Jackson Hewitt only started offering tax preparation and filing services in 2014. Since then, it has become the second-largest tax preparation company in the United States. Jackson Hewitt stands out for his professional and extensive customer support.
Like the other companies mentioned so far, Jackson Hewitt offers very similar services. The customer is walked through step by step during the filing process thanks to a series of questions and explanatory popups. What differentiates Jackson Hewitt tax preparation service from its competitors is the Tax Pro from the "Home" feature.
This service allows the customers to upload their documents, and a tax professional will then assist the customer online or via phone, providing a one-on-one experience similar to an in-office visit. The pricing for this service is available by request.
In addition to this service, there is a free plan and two paid plans. No matter what you choose, with Jackson Hewitt, there is a 100% accuracy guarantee and professional customer service.
6. TaxJar - Best Online Tax Filing Software for E-Commerce Vendors
TaxJar is the perfect solution for e-commerce vendors. It helps business owners keep track of and file sale taxes. With over 15000 businesses under their wing, TaxJar tracks the tax compliance cycle for you.
This service connects directly to your selling platform, whether it is Amazon, Magento, Shopify, Square, Walmart, Stripe, BigCommerce, Etsy, WooCommerce, and the like. You will be able to sync with shopping carts and have access to return ready reports, local and state-level tax reports, information on shipping taxability, and over and under collection detection.
Anyone Interested Can Also Download a Free Guide Here
7. TaxExact - Best Online Tax Filing Software for Accountants
TaxExact is known in the industry for creating online and offline tax platforms for accountants and CPAs. One peculiarity of this company is that not only does it provide simplified versions of the tax returns, but it also helps tax preparers better understand the why's and how's of the tax codes.
TaxExact also helps clients isolate errors or discrepancies with their current tax software and, therefore, drastically saves time. This service offers three different package options that can assist you during this upcoming tax season.
Check Out the Latest Discounts and Request a Free Demo Here
8. The Neat Company - Most Cost-Effective Online Tax Filing Software
The Neat Company was founded in 2002 to enhance digitization through award-winning scanning, data entry products, and reducing paper clutter thanks to the cloud-based platform that helps businesses save time and money and gain a better outlook of their activities.
Today the Neat Company is also specialized in spending tracking, expense management, and tax preparation. Over 100,000 small businesses rely on this company for their accounting activities. Their tools are cost-effective and can be used with TurboTax and H&R Block for more efficient filing.
Visit The Neat Company to See Pricing and Plans Available
9. FreeTaxUSA - Best Online Tax Filing Software for Experienced Users
This software is ideal for taxpayers who know how to properly file their taxes on their own and do not require sophisticated software.
Although some tax forms are not supported (the foreign employment form and at-risk limitation forms), and you may have to pay more for state returns, FreeTaxUSA offers Schedule C, Schedule E, Schedule D, and K-1 related income sources in the Free and Deluxe plans. These are usually only available in premium plans in other competitive companies.
The Deluxe plan also features priority live chat, access to a tax specialist, and audit assistance.
10. LibertyTax - Best Online Tax Filing Software for Personalized Support
Founded in 1997, LibertyTax now has more than 3000 locations in the US and Canada. Similar to H&R and Jackson Hewitt, this company offers the possibility to have access to more personalized support and guidance from its professionals.
Although the e-filing is based on an online cloud-based system, the service is supported by real advisors; therefore, customers can always count on additional support if needed. Customers of LibertyTax, from time to time, can also take advantage of the incredible deals, especially during tax seasons, such as advance loans and promotions that help customers save money.
Visit Liberty Tax to Check Out the Latest Prices and Discounts
Q: How soon can you start filing for your federal income tax return in 2020?
A: The IRS will communicate when it will start accepting tax returns for 2020. But as a rule of thumb, the earlier, the better. Therefore, as soon as you have all the relevant documentation, you can send your tax return documents to the IRS.
Usually, employers have until the end of the year to send out their W-2. With regards to other forms, these will be available around this time as well.
Q: What are the consequences of a missed tax deadline?
A: If you can, you should avoid missing the deadline. You could face a failure-to-file penalty if you miss the deadline and end up owing the IRS money. For your state and federal tax return, the deadline is April 15, 2021, for individuals and businesses.
However, if you are aware that you won't be able to meet the deadline, you can request an extension, but only as a precautionary measure. In case of approval, you will have until October 15, 2021, to file for your taxes.
Q: What is the best filing software?
A: TurboTax is the best online tax filing platform currently available. Online and offline support is unmatched. The numerous features, together with a user-friendly interface and the possibility to get help from a CPA, make Intuit TurboTax the number one choice for most individuals and businesses.
Q: What is the easiest tax software to use?
A: H&R Block is the easiest software to use, especially for self-employed taxpayers. It helps users save time in the filing process.
The Bottom Line
Speed and accuracy are two of the main reasons why business owners use tax preparation software. Inputting data becomes as simple as scanning an existing form, and the information needed will be automatically added into the correct fields. The software also proofreads your documents before they are sent to the IRS.
The best tax software should significantly reduce filling time and decrease the chance of errors that could lead to audits, fines, or other injunctions. Some online tax platforms are even designed to automatically check for deductions or credits that could increase your tax return.
Choosing an online tax software to suit your personal or business needs can be a difficult decision, but this top ten list covering some of the best options available on the market is a great place to start.
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