Which tax preparation software is best?
If the tax authorities come to your door, there is no need to turn your house into a flea market to pay your dues. All you need is the right tax filing software. The best software for you should only be as complex as your finances. Otherwise, you may end up paying more with no added benefit.
The best tax preparation software for the average person is Intuit TurboTax Deluxe Federal And State 2021. It covers all the most common deductions and credits and has an easy to understand interface.
What to Know Before Buying Tax Preparation Software
Complexity of tax filing software
Some people’s taxes are simple enough to take 15 minutes once a year, while others need to carefully track their income and expenses throughout the year. Different software levels meet those needs.
- Base software is for people with little to no complications and a small income. Start here if you are filing tax returns for the first time.
- Advanced software is for people with complications and hefty incomes. If you are married to dependents and have a few income streams, go with this.
- Premium software is for people with different income streams and many complications. If you’ve ever considered an accountant because of your tax complexity, this is your best bet.
- Own boss software is for freelancers and gig workers, etc. It covers the basics of spending on top of premium offerings.
- Small business software is more for year-round accounting than tax revenue.
- Company software is also for year-round accounting, but for those with larger companies.
Operating System Compatibility
Most tax filing software can run on only one operating system. The most common operating systems are Windows, found on most computers, and macOS, found on Apple computers. Most tax preparation software comes with a version for each, so be sure to order the correct one.
What to Look for in Quality Tax Filing Software
Easy data import
The best tax filing software makes importing your data as easy as possible. This could be uploading an image of your files instead of entering them manually or letting you import the information from your different accounts.
E-declaration
Most tax preparation software offers the option to file your taxes electronically with the Internal Revenue Service. Double check that yours works before you buy, otherwise you will have to print and mail your return.
Customer service
Tax preparation software customer support includes the usual help with technology issues, but the best also includes support for those with tax questions. Customer support software for tax questions is a lifesaver for those new to tax filing and those with complex returns.
How much you can expect to spend on tax preparation software
Basic tax software can be found for free because you don’t have to pay the IRS to file your taxes. More advanced software can cost as little as $20 or as much as $100 plus. Year-round accounting software usually starts around $100 and can cost $1,000 plus.
Frequently asked questions about tax filing software
Should I do my own taxes or hire an accountant?
A. One course of action is not better than the other. It’s about how complex your taxes are, how good you are with numbers, and whether you’re willing to spend the time it takes to get everything ready.
If you run a business and it’s your first tax time after you open it, you may want to hire an accountant who can do your taxes as well as explain how to do them yourself next year.
If you have multiple sources of income and complicating factors like being married, having kids, and paying student loans, it’s a bit of a toss-up. An accountant is more expensive than software, but you will save time and effort and potentially get more money back.
If you have one source of income and few to no complicating factors, then free tax software or services that walk you through the steps are probably best.
I’ve never done taxes. Where do I begin?
A. The first step is to gather all the information you have about what came in and what went out. The more information you have, the more complex software you need. If you’re really lost, hire an accountant.
What is the best tax filing software to buy?
Top tax filing software
Intuit TurboTax Deluxe Federal and State 2021
What you need to know: This is an excellent balance of simplicity and depth for those with more complex returns.
What you will like: It covers over 350 deductions and credits and walks you through each of them while skipping the ones that don’t apply to you. You can quickly and easily import most of your tax files, including past returns if you’ve used this software before.
What to think about: This is last year’s version. The 2022 version will be released in November. Some consumers had problems installing it. State returns can be prepared, but not filed electronically.
Where to buy: Sold by Amazon, Dell and Staples
Top tax preparation software for the money
H&R Block Basic 2021
What you need to know: If your taxes are simple, there’s no need for anything more complicated.
What you will like: It covers single income for both singles and married people, whether filing jointly or individually. It also covers basic tax deductions and credits for those with dependents, such as children. It is available for Windows and macOS systems. State taxes are available for an additional fee.
What to think about: Like TurboTax, this is last year’s version and the 2022 version is coming in November. A few customers found the font too small and the interface confusing.
Where to buy: Sold by Amazon, Dell and Staples
Worth watching
Intuit QuickBooks Desktop Premier Plus with Payroll
What you need to know: This is the best software you can get if you run a small business with employees.
What you will like: This software covers everything you need to keep your finances clean and accurate, from tracking expenses to preparing your taxes. It can even create pay slips and you can set up direct deposits for your employees. Your data is automatically backed up.
What to think about: It is only available as an annual subscription and it is one of the most expensive. It’s complex and can take some time to master.
Where to buy: Sold by Amazon, Dell and Staples
Do you want to buy the best products for the best prices? Check out daily offers from BestReviews.
Sign up here to receive BestReviews’ weekly newsletter for helpful advice on new products and notable deals.
Jordan C. Woika writes for BestReviews. BestReviews has helped millions of consumers simplify their purchasing decisions, saving them time and money.
Copyright 2022 BestReviews, a Nexstar company. All rights reserved.
