The best tax software can help you file your federal and state tax returns easily and without having to shell out big bucks.
In fact, many online tax prep tools featured on this list are free for eligible customers and provide different levels of customer support for both novice and seasoned tax filers alike.
Our Top Picks for the Best Tax Software
- TurboTax - Best for investors
- H&R Block - Best for multiple ways to file
- TaxAct - Best for small businesses
- Jackson Hewitt - Best for unlimited state returns
- TaxSlayer - Best tax for self-employed filers
- E-file - Best for year-round discounts
- FreeTaxUSA - Best low-cost tax software
- Cash App Tax - Best free tax software
- Drake Tax - Best for tax preparers
- 1040.com - Best for simple tax returns
Best Tax Software Reviews
- Easy import for investment documents
- Report cryptocurrency gains and losses
- Free for active duty, reserve and National Guard members
- One of the most expensive online tax software
- Many features requires upgrade to paid plan
Why We Chose It: We chose TurboTax as the best tax software for investors for its help with reporting sales of investment securities and funds earning, among other investment services included in its wide range of tax-filing products.
Intuit’s TurboTax is one of the best-known online tax-prep software out there. It’s also an excellent choice for investors, who may benefit from the software’s ability to import investing gains and losses from a variety of sources.
“There’s been a rise in the number of people investing,” says TurboTax tax expert Lisa Green-Lewis. “Taxpayers had a pain point of inserting all their info for transactions, like stock and cryptocurrency sales,” she says, and the software facilitates that.
TurboTax is only free for certain taxpayers for simple tax returns only (see if you qualify). This means the free version is not available for freelancers, business owners and other self-employed individuals who get a 1099 form. Also, those who earn farm or rental income or have earnings from investments like stocks and bonds can't file a simple tax return.
| Services | Free* | Deluxe | Premier | Self Employed |
| Federal | *$0 - for qualified users | $59 | $89 | $119 |
| State | *$0 - for qualified users | $49 | $49 | $49 |
| TurboTax Live | $79 (plus state) | $119 (plus state) | $169 (plus state) | $199 (plus state) |
| Turbo Tax Full Service | $199 (plus state) | $249 (plus state) | $359 (plus state) | $389 (plus state) |
- Option to file expat taxes online with an advisor
- In-person, online, and downloadable options
- Multiple add-on products
- Must pay an additional cost for on-demand support
- Schedule C only available in Self-Employed plan
Why We Chose It: We chose H&R Block as the best tax software for multiple ways to file because it offers four ways to file your taxes, including e-filing on your own or with a tax professional.
H&R Block offers products comparable to those of its main competitor, TurboTax, but at a lower price point. As one of the leading tax software providers, it features a streamlined interface that's easy to navigate, comprehensive explanations on all tax forms and a clear step-by-step guide to help you file taxes on your own.
H&R Block’s free online filing option for simple returns is easy to use and offers the ability to import your previous year’s tax return from another provider. If you have a more complicated return, there are also four paid tax-filing software tiers: "Basic," "Deluxe + State," "Premium" and "Premium & Business."
The company offers an option to file with a tax pro, either in person, online or by dropping off your documents at a local office. They also offer a hybrid service called Tax Pro Review for those who prefer a DIY approach. After filing your own tax return, a tax professional will review it, providing an extra set of eyes.
H&R Block specifically targets the growing number of taxpayers who have a Health Savings Account (HSA). These “triple tax-exempt” accounts are funded with tax-deductible contributions, and H&R Block offers to maximize deductions and credits for filers who have them. However, this service is only available through the company's paid tiers.
| Services | Basic | Deluxe + State | Premium | Premium & Business |
| Federal | $19.95 | $44.95 | $64.95 | $79.95 |
| State | $39.95 ($19.95 for e-file) | $39.95 per additional state ($19.95 for e-file) | $39.95 per additional state ($19.95 for e-file) | $39.95 per additional state ($19.95 for e-file) |
- Get your maximum refund, backed with $100,000 accuracy guarantee
- Navigate your tax return easily using TaxAct Bookmarks
- Unlimited access to returns for seven years
- State returns are pricey
- Poor audit support
Why We Chose It: We chose TaxAct as the best tax software for small business owners because of its comprehensive plan for self-employed individuals, which covers a variety of cases.
TaxAct is worth considering if you have different income streams, are an entrepreneur, a contractor or self-employed. The Self-employed tier covers freelance income (including 1099-NEC), farm and business income, and depreciation calculations. It also covers circumstances included in the company’s Premier tier, including stocks, sale of home, and rental property income.
TaxAct offers a fairly robust calculator you can access under the Tax Tools tab. If you’re reasonably well-versed with the terminology, you can play around with the tool to get a ballpark idea of your estimated taxes without committing to anything. Finally, TaxAct backs up its claim that you’ll get your maximum refund with a guarantee of up to $100,000.
TaxAct also offers a free package for federal and state filing for all active-duty service people via the TaxAct military landing page. The offer is applied once you enter an eligible Employer ID Number during filing.
| Services | Free | Deluxe | Premier | Self Employed |
| Federal | $0 | $46.95 | $69.95 | $94.95 |
| State | $39.95 (per state) | $54.95 (per state) | $54.95 (per state) | $54.95 (per state) |
- Multi-state filing included in flat $25 price
- Virtual tax pro assistance is available
- In-person customer service
- Must file in-store to receive advances
- Pitches for pricier products
Why We Chose It: We chose Jackson Hewitt as the best tax software for unlimited state returns because of its single, low fee which covers an unlimited number of state returns.
Jackson Hewitt is well known for its pop-up shops and kiosks that sprout up in strip malls and big-box stores during tax season, but the tax preparer also has online software for people who want to file their taxes from home. For $25 you can prepare and file an unlimited number of returns (both state and federal).
Apart from its in-person options at your local mall during tax season, its customer support is comprehensive and even includes IRS audit assistance.
| Services | Online |
| Federal | $25 (includes State) |
| State | $25 (includes Federal) |
- More affordable than other tax software providers
- Comprehensive tax return knowledge base
- Maximum accuracy guarantee
- Limited audit assistance and customer support
- Does not support certain business returns
Why We Chose It: We chose TaxSlayer as the best tax software for self-employed filers because of its affordable and inclusive products for freelancing individuals.
TaxSlayer’s greatest advantage for self-employed filers is clear: it’s cheaper than the other alternatives out there. For $55 — the most expensive of its three paid online tax prep tiers — you get live chat assistance from tax pros as well as estimated tax payment reminders.
Independent contractors with super-simple returns may appreciate the company’s free filing option. Though it has less frills than some of its competitors’ free versions, it provides all the tools needed to quickly file a basic 1040 tax return.
TaxSlayer also offers free federal tax filing for all income types, deductions and credits via the landing page if you’re an active-duty military member. However, you’ll still have to pay for filing state taxes, which costs $39.95 per state.
| Services | TaxSlayer Military | Simply Free | Classic | Premium | Self-Employed |
| Federal | $0 | $0 | $29.95 | $49.95 | $59.95 |
| State | $39.95 | $0 | $39.95 (per state) | $39.95 (per state) | $39.95 (per state) |
- Navigation sidebar with installed customer support tools
- Best for simple DIY tax returns
- Opt for free audit assistance
- Limited on-demand customer support
- No discount for military members
Why We Chose It: We chose E-File as the best tax software for year-round discounts because of its generous promotions and discounts available throughout the year for filers.
E-file is a good choice for budget-conscious filers who just need the basics. Its filing process is simple: once you create an account, enter your taxpayer information and E-file will prepare your return. The standard interface features prior-year import and a support sidebar that guides you every step.
E-file emphasizes speed on its homepage, boasting that users with simple tax returns can file electronically in under 15 minutes with its online software. It's not only fast, it's also generally less expensive than other tax preparers. E-file has a basic option for federal filing, but even its Deluxe Plus and Premium Plus tiers come in under $40. It accepts promo codes, too.
E-file will automatically save your progress as you complete your tax forms. Though the platform is entirely online and promotes electronic filing, you can also print out your tax forms to mail in physically. If you encounter a question before that point, the company also has phone or email assistance available for a fee.
| Services | Free Federal Basic Software | Deluxe Plus E-file | Premium Plus E-file |
| Federal | $0 | $20.99 | $37.49 |
| State | $22.49 (per state) | $22.49 (per state) | $22.49 (per state) |
- Free tax storage for up to seven years
- Low state income tax returns fees
- Free federal tax extension filing
- No in-person help or phone-based customer support
- Limited importing tools
Why We Chose It: We chose FreeTaxUSA as the best low-cost tax software because it offers free filing for people in all tax situations, such as filing jointly, homeownership, dependents, itemized deductions, self-employed, investments, rental property, retirement and tuition program distributions.
FreeTaxUSA is an online-only tax service that’s particularly well suited to filers looking for a bargain, and who are comfortable filing their tax return with little or no assistance. Whether your tax situation is simple, basic or advanced, the software lets you file your federal tax return for free. State returns cost a flat rate of $14.99, regardless of the complexity of your return.
FreeTaxUSA features easy prior-year imports from TurboTax, H&R Block and TaxAct. However, there is no document import feature, meaning you’ll have to enter some of your tax information manually. Once you file your return, it will be automatically stored as a PDF for up to seven years.
The tax software provider also says it helps military members get the biggest refund available. It supports tax breaks such as combat pay exclusion, moving expense deduction, uniform deduction, reservist’s travel deduction, job search expenses, EITC for Nontaxable Combat Pay and more.
| Services | Free Edition | Deluxe Edition |
| Federal | $0 | $6.99 |
| State | $14.99 (per state) | $14.99 (per state) |
- Supports most major IRS and state forms/schedules
- Free filing for federal and state taxes
- Completely mobile tax return filing
- Doesn't support easy import of investments
- No professional support with paid plans
Why We Chose It: We chose Cash App Tax as the best free tax software because it’s the only tax software provider that offers a completely free tax filing service for federal and state returns.
Cash App Tax, acquired by Cash App from Credit Karma in November 2020, is worth considering if you’re comfortable with a DIY tax software and don’t need one-on-one support. Unlike most of the leading tax preparation software providers, Cash App Tax does not enforce strict income limits to qualify for its free products. The software offers support for most major IRS forms and schedules as well as many other tax situations that other freebie tax software providers don’t accommodate, such as student loan interest and rental property income.
To facilitate your tax preparation process, the software is equipped with easy-to-use navigation tools to guide users through every step of the way. You can also easily import your 1040 using their Smart File feature on the Cash App Tax mobile app or your computer.
The software offers free audit defense and an accurate calculations guarantee: if the service makes a mistake, you could receive up to $1,000.
Cash App Tax currently provides state filing in 41 states and the District of Columbia. Its services are not available in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming.
| Services | Free |
| Federal | $0 |
| State | $0 |
- Complete practice management and tax preparation
- Hosted, online and desktop installation options
- Can service small and large corporations
- Limited third-party integration
- Must be renewed every year
Why We Chose It: We chose Drake Tax as the best tax software for tax preparers because it offers multiple tiers that are designed to meet the needs of different tax professionals.
Drake Tax has provided tax software services to tax preparers since 1977, with an electronic filing option since it became available. The company has helped a wide range of offices produce accurate and compliant tax returns.
Most notably, Drake Tax offers a variety of professional tax software options that can service just about any level of tax business — from a single CPA working from a home office to a large corporation. For instance, Drake’s Pay-Per-Return System is great for tax preparers who may not manage large quantities of returns a year.
If you have trouble understanding a form, Drake Tax has a customer support line that’s available from December to April 20. You can safely email the tax return to a customer support specialist to get hands-on assistance and resolve an issue within a week’s time.
| Free Trial | Pay-Per-Return | Unlimited | Power Bundle | |
| Cost | $0 | $345 | $1,725 | $1,875 |
| 1040, 1040-NR Returns | N/A | 10 included, $29.99 for each additional | Unlimited | Unlimited |
| 1120, 1120-S, 1120-H, 1065, 1041, 990, 706 Returns | N/A | $44.99 each | Unlimited | Unlimited |
- One affordable flat rate for federal and state filing
- Guided navigation and audit support
- Mobile friendly website
- No full-service filing option
- No on-demand live support
Why We Chose It: We chose 1040.com as the best tax software for simple tax returns because of its user-friendly interface and affordable flat rate of $25.
1040.com is a good choice if you’re looking for a no-frills, affordable tax preparation software. The online-only software provider is filer-friendly and equipped with a sophisticated walkthrough system that guides you through your tax return.
Navigation is simple. Once you get started you can use the "tell me more" button to learn more about different tax forms or ignore it and continue scrolling. If you’re familiar with your tax forms and don’t need a step-by-step walkthrough, you can save time and use the menu to jump between forms.
1040.com supports prior-year imports for return filers and W-2 import, which can speed up half of your tax prep process. You’ll also get three-year secured storage of your tax returns. Keep in mind that 1040.com is limited to only W-2 imports: any other tax statements must be entered by hand.
Should you need support from a tax expert, 1040.com has a service team available through chat and email — no upgrade required.
| Services | File Taxes |
| Federal | $25 (flat rate) |
| State | Included |
Other tax software companies we considered
The following tax software companies offer packages that we believe are worth mentioning. However, we found that they do not excel in any one area or lack essential features that would otherwise land them in our top reviews.
ATX Tax
- Library with over 6,000 tax compliance forms
- Additional integrations for easy import
- Robust diagnostics to catch errors
- Designed for tax professionals
- Best suited for mid-sized accounting firms
EzTax Return
- Great for simple tax returns
- Safe storage for up to three years
- More affordable than most tax prep software
- Available only in 21 states
- Email customer support only
Community Tax
- Licensed tax practitioners, CPAs on staff
- Assist with tax prep, planning, resolution and accounting
- Free phone consultation
- Must create an account to learn about pricing tiers
Liberty Tax
- Easy-to-follow tax preparation experience
- Import tax documents quickly and easily
- Fast and user-friendly interface
- Limited advice from financial professionals
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Tax Software Guide
Getting through tax season has never been easier thanks to the wide variety of online tax preparation tools available today. But with so much new software, it’s gotten harder to pick one.
Before you make a choice, it’s important to understand what tax software is, how it works, and what you can expect from this type of service.
What is a tax software
Tax software programs are designed to help the average taxpayer accurately prepare and file state and federal income tax returns.
Online tax software can be a cost-effective way to file your tax returns from the comfort of your home, and the products don’t require any previous experience for you to navigate them.
If you need extra support, almost all tax software programs are equipped with tools to help you answer common questions regarding your returns. That may include a glossary defining common tax terms, a step-by-step navigation bar or a live chat or consultation with a tax professional.
How does tax software works
Tax software programs generally use two types of interface to coach you through your tax return: an interview-style questionnaire or a form-based step-by-step guide.
Most tax preparation software programs also feature simple navigation tools that allow you to upload returns from prior years, W-2s and investment income documents. This can save you a substantial amount of time as the software automatically imports your information into your return.
Once you’re done entering all your information, tax software programs often run a diagnostic to check for errors. Before you file, they verify that your information meets legal state provisions and check whether you’re eligible for certain income adjustments or tax credits (for example, based on your tax bracket).
After you file, you can easily track the status of your tax refund through the company's online portal or the IRS website.
| Pros | Cons |
| Most tax preparation software is easy to use and includes step-by-step guidance for filers. | Tier packages that increase in cost according to the complexity of the return and the services needed. |
| File your tax returns on your own time thanks to easy online access. | Usually require an additional cost to get one-on-one support from a tax professional. |
| Tax returns and information are often saved automatically for easy access and download. | May not offer the level or channels of support you need. |
| Less expensive than hiring a CPA. In some cases, you can even file for free. | Not all complex tax returns are supported. You may be better off hiring a CPA. |
How do you choose the right tax software?
There are numerous tax software programs available online, but not all of them are designed for the same circumstances. Some software is meant to guide total beginners in personal finance through the process, whereas others are meant to be used only by professionals.
Choosing the right tax software comes down to three main factors: cost, user experience and forms availability.
Cost
Tax preparation software is often an affordable option for taxpayers to file their state and federal income tax returns. However, if your tax return is complex, as is the case for self-employed individuals, business owners, investors, couples filing jointly or those with dependents, you may have to pay for a premium service.
Consider how much you’re willing to spend on tax preparation software and if you are able to make due with simpler, free software options. Some companies offer budget-friendly plans, but these often lack support for filers that need more hand-holding. Other software options offer audit support or on-demand customer support from a tax professional, but with a higher price tag.
User experience
Tax preparation software programs are designed to simplify the tax return filing process, especially for inexperienced individuals. It’s important that the user feels guided and understands what is happening every step of the way.
Look for tax preparation software that offers clear explanations for every field on their digital forms. Also, make sure you’re aware of the customer support channels available to you, such as live chat, email, tax term glossaries and phone support.
Tax forms available
There’s no point in becoming familiarized with a tax preparation software if it doesn’t even offer the type of forms you need to file. Most common forms are usually offered widely (and for free), but specific types of forms may require some more careful hunting down.
Here are a few often-used forms you may come across:
- 1040: Form 1040 is an IRS form used by U.S. taxpayers to file their annual income tax returns. Most taxpayers use a 1040 form to report their income tax for the year and any refund or additional tax owed.
- W-2: A W-2 is a tax form that shows your total paid wages, as well as federal, state or other income tax withholdings for the year, as reported by your employer. The IRS requires employers to send W-2 forms to their employees no later than January 31 following the end of the tax year, which generally falls on December 31.
- 1099-INT: Form 1099-INT is used to report the amount of interest a company or entity paid to you.
- 1099-DIV: Banks and financial institutions use form 1099-DIV to report dividends and other distributions you have received.
- 1098-E: Form 1098-E is used to report the amount of interest you’ve paid in a year toward your federal student loans. You’ll receive your 1098-E via email or postal mail if the interest you paid exceeds $600 (2020) or you can download a copy from your loan servicer. In some cases, you may be eligible to deduct a portion of the interest you paid on your federal tax return.
- 1098-T: Form 1098-T is a tuition statement form that reports the amount of college tuition you paid during a calendar year. With a 1098-T, you may be eligible for an adjustment to income or tax credit.
- Schedule A: Taxpayers use a Schedule A to report itemized deductions (e.g. charitable gifts and donations, mortgage interest, business expenses, medical bills) to the IRS. Once you list all of your itemized deductions, you can calculate your total itemized deductions amount, which is subtracted from your adjusted gross income (AGI) to determine your total taxable income.
- Schedule B: There are eight main situations where you may be required to fill out a Schedule B form. These include earning more than $1,500 in dividends or interest, receiving accrued interest from a bond, or having a foreign financial account or trust..
- Schedule C: If you’re self-employed or act as a sole proprietor business owner, a Schedule C reports income profits or losses for the year. According to the IRS, any activity qualifies as a business if your primary purpose in engaging in the activity was to earn income and you were involved in said activity with continuity and regularity.
Best Tax Software FAQ
What is the best tax software?
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There is no one-size-fits-all best tax preparation software. The best tax program for you will depend on your budget, the complexity of your tax return and the product features you're seeking. For example, a college student may not need the same type of tax software as a married couple filing together with dependents.
Before settling on a tax preparation software provider, look into the tax forms it supports, whether or not the service offers one-on-one professional tax support or technical support and if the programs are available in your state.
Which free tax software is best?
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Cash App Tax is one of the best free tax software programs for filing federal and state returns at no cost. Unfortunately, it doesn't support all tax forms. Similarly, other companies like TurboTax, H&R Block and TaxSlayer offer free tiers for basic federal tax returns only.
If you're a military member, several online tax software providers offer free filing for federal returns regardless of the complexity of your return. The IRS also has an online free file program that allows you to file your income tax returns through a partner site. However, most tax preparation software programs will require you to pay for state returns.
Were there tax changes in 2021?
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The biggest changes for the 2021 tax season had to do with the COVID-19 pandemic. Thanks to the Coronavirus Aid, Relief and Economic Security Act, you can deduct charitable donations up to $300 even if you don't itemize. If you do itemize, you may want to take advantage of the IRS's decision to suspend its limits on the percentage of charitable contributions taxpayers can deduct.
For the 2021 tax year, taxes will accommodate people who didn't receive the full stimulus check amount they were owed. If you never received an Economic Impact Payment or believe the amount was wrong, you can claim the Recovery Rebate Credit.
How soon can I pay my taxes?
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The IRS announced that it began accepting and processing tax returns for the 2020 tax year on Feb. 12.
Here are a couple of good reasons why it pays to file your taxes sooner rather than later:
- You can get your refund money faster
- If you forget to file your taxes by the deadline (that's usually April 15), any back taxes owed are still due on that date, in addition to late filing fees.
- You can avoid scams. The IRS warns
about scammers stealing Social Security numbers to make off with people's refunds. If you've already claimed your refund, a thief is going to be out of luck.
What software do tax preparers use?
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Tax preparers need specialized tax filing software that lets them help accurately file others' individual and business returns. A tax preparation software for professionals should include resources such as line-by-line assistance, advanced tax research options, practice management capability, and a client portal for easy document sharing. Based on our research, we concluded that Drake Tax offers the best value for tax professionals.
How We Chose the Best Tax Software
When looking at tax preparation software, we first evaluated the types of features included in different pricing plans. We considered if they are IRS-approved, the states they service, and the tax situations they support, as well as whether they offer a maximum refund and accuracy guarantee. We also reviewed each software's navigational tools and took into account if they offer free services for military members and free filing for federal and state returns.
Summary of Money’s Best Tax Software Programs of 2021
- TurboTax - Best for investors
- H&R Block - Best for multiple ways to file
- TaxAct - Best for small businesses
- Jackson Hewitt - Best for unlimited state returns
- TaxSlayer - Best tax for self-employed filers
- E-file - Best for year-round discounts
- FreeTaxUSA - Best low-cost tax software
- Cash App Tax - Best free tax software
- Drake Tax - Best for tax preparers
- 1040.com - Best for simple tax returns