April 15th — tax day — is typically a day no one forgets, but that date has been pushed back quite a bit this year due to the coronavirus pandemic. July 15th is the revised deadline for 2020, so although summer has arrived with backyard barbecues, poolside lounging and jumping in the waves — all socially distanced, of course — you’ll still need to set aside some time inside the house to get your taxes done and submitted to the IRS and state agencies.
With many online tax programs available, there are plenty of options to do your taxes at home in a relatively easy manner. But which one should you use? There are pros and cons to all of them, so to determine which tax software is truly the best, we picked the top four programs and went through the entire process of entering our tax information. We then compared the results to that of a tax professional to see if these programs can get you the same (or better) results.
Each program offers four different filing options based on the complexity of your taxes. And although they cover many of the same forms and deductions, there are some differences, and quite a spread when it comes to price.
This chart lists out those options along with their respective prices at the “do-it-yourself” level. Some of the programs are also available to purchase via Amazon or your local office supply store at a slightly cheaper price, though you’ll only be able to “try before you buy” at each tax program’s website.
If you have a very straightforward tax situation — a W-2 from a job and perhaps some interest or dividend income — all of these programs offer a free option that will likely work for you. Not many forms are included, though H&R Block provides the most forms under this no-cost filing option. On the flip side, H&R Block will also work hardest at trying to sell extra options to you throughout the process, so “free” might not end up being truly free if you decide to take them up on one or more of their pitches.
If you have relatively simple taxes but still more than what’s allowed in the free versions, all of the basic-level paid options will work just fine, so cost might be your biggest factor when selecting one of the four. Since professional accountant support typically isn’t needed when it comes to a simple tax situation, TaxSlayer should be your go-to for your low-cost option.
However, if you have more complex taxes — which could include running a small business, having numerous deductions or owning lots of real estate — you’ll want to put cost aside and use TurboTax. TurboTax is hands down the most customer-friendly option with an easy-to-use platform.
But you may find you’ll need to pay some of TurboTax’s add-on fees to ensure the most accurate results, meaning you might be better off just handing over your tax documents to an accountant to save the headache. Taxes are complicated and making sure you get everything accurate while maximizing your deductions, is just that… complicated.
Why we like it in a sentence: Throughout the entire process, TurboTax is the easiest to use, helping you figure out which forms you need in a customer-friendly way, and offering live customer support whenever you need it.
From the moment you arrive at the TurboTax website, the company holds your hand to help you figure out the right software version to use for your specific taxes. The site asks a number of questions about common financial items — such as whether or not you have a job, pay rent, pay student loans, sold stock, have children and more — which will then automatically populate into the TurboTax version you need to get started.
Out of all four tax programs, entering my W-2 information was by far the easiest with TurboTax. With all the other programs, I had to manually enter each line item from my W-2 form, but not with TurboTax. By just entering my employer ID and the dollar amount from box 1, the program was able to automatically import my entire W-2 and populate all the required boxes. If TurboTax doesn’t recognize your employer’s EIN, you can also take a photo of your W-2 form using the TurboTax mobile app.
I was also able to import some of my 1099-INT and 1099-DIV forms by logging into my respective financial institution websites right from the TurboTax site. This made the process seamless and ensured all information was entered correctly.
My personal taxes are on the complicated side, and TurboxTax’s search feature was a huge help. Since not every form was presented to me throughout the process, I had to do some digging to find some of the more uncommon ones. But TurboTax has a great search feature, which allows you to enter the form name, along with a jump feature that takes you immediately to that form. This was definitely unique to TurboTax, and made entering all my forms much easier.
While most of these software programs offer support, in my experience TurboTax had by far the best customer support. I did my TurboTax work late at night, and at one point I was having some difficulty figuring out where to enter my Schedule K-1 information. With just a 5-minute wait, I was able to speak to an attorney with 8 years of experience. I was also able to share my screen with the support representative, who guided me to the correct form by highlighting the steps on my screen.
Best of all, TurboTax support is available during most waking hours in the US — 8 a.m. to 12 a.m. Eastern time during the week — and on most weekends leading up to the tax-filing deadline, while H&R Block closes at 8 p.m. Eastern during the week, has limited hours on Saturdays and is closed on Sundays. Speaking to a support specialist (not an accountant) is included in your TurboTax fee with the three paid versions, and offered for an add-on fee on the free filing option.
TurboTax also offers the option to have a CPA review your return line-by-line, and to speak to them throughout the year with tax questions. This service costs an extra $80, but could be worth it if you’re concerned about the accuracy of what you’ve done on your own.
Why we like it in one sentence: H&R Block Free provides more forms for free than the other programs, allowing slightly more complicated returns at no cost.
Although all four tax preparation programs offer free versions, H&R Block gives you access to the most forms without a charge. This means even if your taxes are a step up from simple, you still might be able to file through an online tax preparation program for free.
With H&R Block’s free filing option, you’ll still be able to file Schedules 1, 2 and 3, which are common amongst many taxpayers. This allows you to cover child and dependent care expenses, student loan interest deductions, tuition and fee statements and unemployment income. With many of the other tax programs, you might have to pay for the mid-tier service in order to access these options.
However, the real downside of H&R Block’s software is that the interface isn’t very user-friendly. Finding forms is quite hard since the program’s search functionality doesn’t work well, and chat sessions are limited. The software also has a feature that allows you to take a picture of some of your forms to extract the details automatically, but it did not work very well in my tests.
And although many people should be able to use the free option, H&R Block does try to regularly upsell you. Compared to the other programs, it has significantly more pop-ups offering the chance to buy partner apps or additional tax services.
If you do decide to use one of the paid H&R Block editions, as of this writing, you can currently get a 25% discount off the regular price when you purchase through the links on this page. However, this discount is subject to change or to be discontinued at any time.
Best Pricing: TaxSlayer ($17 for Classic version plus $39 per state)
Why we like it in one sentence: Regardless of the complexity of your taxes, TaxSlayer will offer you the least-expensive pricing across the board.
With some programs charging as much as $110 to file a complicated Federal return, TaxSlayer costs no more than $47 for your Federal return, even for the most complex tax situation (though you’ll pay an extra $39 per state as well).
Now, one might assume that a lower cost equals lower results, but that turns out not to be the case. I found it quite easy to navigate the TaxSlayer website, and entering some forms was even easier than other sites. For example, with H&R Block and TurboTax, figuring out where to enter my Schedule K-1 information wasn’t as simple as it should have been. But with TaxSlayer, it was an upfront option where I didn’t have to go searching for it.
Even with its no-cost option, TaxSlayer offers free phone and email support, although you’ll need to upgrade to the Premium version to speak to an actual tax professional. But the cost of the Premium edition is just $37, while the same level of support with the same filing needs will cost you $139.99 with H&R Block.
In my tests with TaxSlayer’s chat support, there was no hold time, and getting answers to my questions was quite easy — although to be fair, they weren’t very complicated questions. However, the major disadvantage with their support is that it’s only available during the week from 9 a.m. to 5 p.m. Eastern time.
Best Guarantee: TaxAct ($54.95 for Deluxe version plus $54.99 per state)
Why we like it in one sentence: TaxAct has a $100,000 Accuracy Guarantee, which makes us feel confident that our taxes have been done correctly.
When it comes to a guarantee, TaxAct blows all the other programs out of the water. While all four programs are marketed as 100% accurate, TaxAct goes further by offering up to $100,000 in reimbursement if their software fails to provide accurate results.
However, it’s important to keep in mind that this guarantee covers any error made by the program itself, not errors that you might make entering the data. According to the TaxAct site (the bolding is ours), “if an error in our software results in you ultimately receiving a smaller refund or larger tax liability than you receive using the same data with another tax preparation product, we will pay you the difference in the refund or liability (up to $100,000) and refund the applicable software fees you paid us.” The guarantee also includes any penalties or interest due to an error.
Aside from having the absolute best accuracy guarantee, TaxAct is fairly simple to use, its pricing is in the middle of the road across the four programs, and it offers the option to file your taxes jointly with an expert.
My taxes are typically prepared by a CPA, and this year was no different. Back in March, I handed my accountant all my tax forms and my taxes were completed with little effort on my part — for a whopping fee of $900. But for that price, I trust my accountant will maximize my deductions and save me as much money as possible.
When I was analyzing the accuracy of these four tax software programs, I entered the information from the exact same forms I originally handed over to my accountant, and compared the end results of each program to the return I received from my accountant.
Although none of the programs provided the exact same result as my accountant, TurboTax was by far the closest, with just a 0.3% difference in the amount of taxes I owed. H&R Block came in at roughly a 3% difference, TaxSlayer had a 6% difference and TaxAct ended up with a whopping 20% difference.
However, since I’m not an accounting expert, and as a result of some limitations in each of the programs, I wasn’t able to match all the deductions that appear on my accountant-prepared return, which also impacted the end results. For example, when it came to our rental property, I wasn’t able to get anywhere close to the same depreciation results as my accountant. In fact, this was the case with all the programs, where I had to leave some things out due to confusion.
We went through each of the four programs completing a real-life tax return with a fairly high level of complexity, attempting to enter every piece of data and use all the features available. We then compared the resulting return from each program to the return prepared by a professional CPA using the same information to see if the amount owed on the federal and state levels matched.
The main criteria we evaluated included:
- Accuracy: To ensure accurate results, we matched the end result to a professionally prepared filing. We also compared the results between the four programs.
- Ease of use: We looked at many different aspects of each company’s site when determining how easy the software was to use. This included how long it took to get started and sign up for the program, navigating through the software, determining whether the process was straightforward or confusing, and the time spent to complete the filing.
- Cost: We compared all costs for all types of filing needs. We also took notice as to whether or not we were being upsold extra options throughout the process.
- Guarantees: We looked at the guarantees each program offered to ensure that they stood behind their results.
Using the test criteria described above, we calculated points for each tax software program in every subcategory. Each software’s score was made up of the sum of its marks in each subcategory. Here’s a breakdown of our point systems:
- Accuracy had a maximum of 45 points: outcome matching to professionally prepared filing (25 points), matching the other tax software results (20 points).
- Ease-of-use had a maximum of 35 points: ease of getting started (5 points), ease of navigating the software (15 points), help and support features (10 points), length of time to file (5 points).
- Cost had a maximum of 15 points: program cost at each level (10 points), upselling tactics (5 points).
- Guarantee had a maximum of 5 points: Notable guarantees and protection (5 points).
Using the criteria above, TurboTax had the highest score overall with 82 points. TaxSlayer wasn’t too far behind with 75 points. H&R Block and TaxAct came in third and fourth, respectively, with 65 and 60 points.
It wasn’t surprising to me that TurboTax was the clear winner, as that was my own personal top pick after using the four programs prior to tallying up the official score. With that said, I’ve realized doing my complex taxes myself isn’t for me and I still prefer a professional, but for simpler returns, using a tax program is definitely a cost-effective option.
Fortunately, you don’t have to pay for any of these programs upfront — you only pay at the end of the process when you file. So, if you end up going through your taxes and realize that doing it yourself is not for you, there’s no money lost. Or if you start with one tax program and aren’t happy with the way it’s going, you can always try another one to see if it works better for your particular tax scenario.
Note: The prices above reflect the retailer’s listed prices at the time of publication.