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Best Tax Software Reviews of August 2023

Brace yourself – tax season is upon us! Dreading the tedious task of filing your return? Fear not! Exceptional online tax software is here to lighten the load and make your life easier.

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Best Tax Software Companies 2023

Tax season is one of the most stressful times of the year for many Americans. Filing your taxes can be a time-consuming and complicated process, especially if you have a lot of deductions, investments, or business expenses to claim. Fortunately, tax software services can help you prepare and file your taxes quickly and easily from the comfort of your own home. In this article, we will discuss the pros and cons of using tax software services, the types of services provided by tax software companies, and answer some frequently asked questions about tax software.

Tax software has become an essential tool for taxpayers who need to prepare and file their taxes. Whether you’re a self-employed individual or receive cash app taxes, tax software helps streamline the process by providing easy-to-use online tax preparation tools. With the advent of free tax filing options, tax filers can file their federal tax returns at no cost and receive their tax refund faster. The best free tax software also offers a maximum refund guarantee and expert tax assistance to ensure taxpayers qualify for all eligible deductions and credits, including the child tax credit and earned income tax credit.

Tax Software Pros and Cons

Pros and Cons of Using Tax Software Services

Pros:

Convenience: Tax software services allow you to prepare and file your taxes online, from the comfort of your own home. This means you don’t have to visit a tax professional or spend hours filling out forms by hand.
Cost-effective: Tax software services can be much cheaper than hiring a tax professional. Most tax software companies offer a range of pricing plans, from free options for simple returns to more expensive plans for more complicated returns.
Accuracy: Tax software services can help you avoid common errors that could delay your refund or trigger an audit. Tax software can also help you maximize your deductions and credits, which could help you save money.
Speed: Tax software services can help you file your taxes quickly and easily, which means you can get your refund faster. Most tax software companies offer e-filing options, which can be much faster than paper filing.

Cons:

Limited support: While tax software services can be convenient, they may not offer the same level of support as a tax professional. If you have a complex tax situation, you may need the help of a tax professional to ensure you are claiming all of the deductions and credits you are entitled to.
Learning curve: Tax software services can be complicated, especially if you have never used them before. You may need to spend some time learning how to use the software, which can be frustrating.
Technical issues: Tax software services can sometimes have technical issues, such as crashes or glitches. This can be frustrating, especially if you are working against a deadline.

Types of Tax Software Services

Online Tax Software: Online tax software allows you to prepare and file your taxes online. Most online tax software services offer a range of pricing plans, from free options for simple returns to more expensive plans for more complicated returns. Some popular online tax software companies include TurboTax, TaxSlayer, TaxAct, and H&R Block.
Desktop Tax Software: Desktop tax software allows you to prepare and file your taxes on your computer, without needing an internet connection. Desktop tax software can be a good option if you don’t have a reliable internet connection. Some popular desktop tax software companies include TurboTax, H&R Block, and TaxAct.
Mobile Tax Apps: Mobile tax apps allow you to prepare and file your taxes on your smartphone or tablet. Mobile tax apps can be a good option if you need to file your taxes on-the-go. Some popular mobile tax app companies include TurboTax, H&R Block, and TaxAct.
Professional Tax Assistance: Some tax software companies offer professional tax assistance, which means you can get help from a tax professional if you have a complex tax situation. Some popular tax software companies that offer professional tax assistance include Jackson Hewitt, Liberty Tax, and H&R Block.

What is the best tax software?

Determining the “best” tax software depends on a variety of factors, including the complexity of your tax situation, your level of comfort with technology, and your budget. Here are some of the most popular tax software options and their key features:

TurboTax: TurboTax is one of the most popular tax software options, and it offers a user-friendly interface and a range of features for taxpayers with simple or complex returns. It provides a guided experience to help you navigate the tax filing process and includes live support from a tax expert if you get stuck.
TaxAct: TaxAct is a more affordable option than some of its competitors, and it’s a good choice for those with straightforward tax situations. It offers a straightforward interface and provides step-by-step guidance for entering your tax information. TaxAct also has a comprehensive knowledge center and offers live chat support.
H&R Block: H&R Block is known for its brick-and-mortar tax preparation services, but it also offers a range of online tax software options. It’s a good choice for those with more complex tax situations, as it includes access to tax experts via chat or video. H&R Block also offers a “worry-free audit support” guarantee.
TaxSlayer: TaxSlayer is another affordable option that’s best for those with simpler tax returns. It provides a simple, intuitive interface and offers free phone and email support. TaxSlayer also has a range of educational resources, including blog posts and video tutorials.
Jackson Hewitt: Jackson Hewitt is a lesser-known option that’s best for those with simple tax returns. It offers a range of software options, including a free version for basic tax returns. Jackson Hewitt also offers in-person tax preparation services for those who prefer a more personalized approach.
Liberty Tax: Liberty Tax is another lesser-known option that offers both online and in-person tax preparation services. Its software is relatively basic and best suited for those with straightforward tax returns. Liberty Tax also provides audit support for an additional fee.
FreeTax USA: As its name suggests, FreeTax USA is a completely free tax software option. It’s best for those with simple tax returns and includes a user-friendly interface and step-by-step guidance for entering your tax information. However, it doesn’t offer phone support, and some features are only available with the paid version.

Overall, the best tax software for you will depend on your individual needs and preferences. Consider factors such as the complexity of your tax situation, your level of comfort with technology, and your budget when choosing a tax software option.

Best tax software programs for self-employed individuals?

Self-employed individuals typically have more complex tax situations than those who are employed by someone else, so it’s important to choose tax software that can handle these complexities. Some of the best tax software programs for self-employed individuals include:

TurboTax Self-Employed: TurboTax is a popular and well-known tax software that offers a specific package for self-employed individuals. It includes features such as expense tracking, industry-specific deductions, and personalized guidance from self-employed tax experts.
H&R Block Self-Employed: H&R Block is another popular tax software that offers a package designed for self-employed individuals. It includes features such as expense tracking, guidance on home office deductions, and help with quarterly tax payments.
TaxAct Self-Employed: TaxAct is a more affordable option for self-employed individuals that still offers many of the necessary features. It includes guidance on self-employment taxes, business expenses, and tax deductions.
QuickBooks Self-Employed: QuickBooks is a popular accounting software that also offers tax preparation services for self-employed individuals. It includes expense tracking, invoicing, and helps with estimated tax payments.
FreshBooks Self-Employed: FreshBooks is another accounting software that offers tax preparation services for self-employed individuals. It includes features such as time tracking, invoicing, expense tracking, and mileage tracking.

Ultimately, the best tax software for self-employed individuals will depend on their specific needs and preferences. It’s a good idea to compare the features and pricing of different options before making a decision.

How does tax software work?

Tax software works by automating the tax preparation process. When you use tax software, you typically answer a series of questions about your income, deductions, and other tax-related information. The software then uses that information to calculate your tax liability and generate the necessary tax forms.

Most tax software programs guide you through the process with a series of prompts and forms that you need to complete. As you work through the questions, the software will automatically calculate your tax liability and help you identify deductions and credits that you might be eligible for.

Once you’ve completed all of the forms and answered all of the questions, the tax software will generate your tax return. You can then review the return for accuracy and make any necessary corrections before submitting it to the IRS electronically.

Tax software also typically includes features that allow you to import information from other sources, such as your W-2 or 1099 forms. This can help streamline the process and ensure that your tax return is accurate.

Tax software makes it easier for individuals and businesses to prepare their tax returns by automating many of the calculations and processes involved.

Taxpayers can file their federal income tax online using tax software and benefit from the maximum refund guarantee, regardless of their filing status or adjusted gross income. Tax software offers options for bank account information, payment of tax bills, and education expenses. Tax software offers expert tax advice and professional tax help for those who need it, including those who receive unemployment income or dividend income. Tax software also helps with real estate taxes and offers free file fillable forms for taxpayers who prefer to file a paper tax return.

What tax forms do I need to use tax software?

The tax forms you need to use tax software depend on your specific tax situation. For example, if you are an employee, you will need to use a different set of tax forms than if you are self-employed or own a business.

Generally speaking, most tax software programs will support a wide range of tax forms, including:

Form 1040: The standard tax form for individual income tax returns in the US.
Schedule A: Used to itemize deductions, such as mortgage interest, charitable contributions, and medical expenses.
Schedule C: Used by self-employed individuals to report business income and expenses.
Schedule D: Used to report capital gains and losses from the sale of assets.
Form 1099: Used to report income earned from sources such as self-employment, interest, dividends, and retirement accounts.

Some tax software programs may also support more specialized forms, such as those for rental income, foreign earned income, and business expenses. It’s important to review the list of supported forms for any tax software program you are considering to ensure it supports the forms you need for your specific tax situation.

Can tax software help me maximize my deductions?

Yes, tax software can help you maximize your deductions by guiding you through the process of identifying all eligible deductions and credits. Most tax software programs have built-in deduction maximizers that will ask you questions about your personal and financial situation to ensure that you are claiming all eligible deductions and credits.

Additionally, many tax software programs offer audit support and guarantee, which means that they will help you navigate an audit if the IRS decides to audit your tax return. However, it’s important to note that tax software is only as good as the information you provide, so it’s crucial to enter all the relevant information accurately to ensure that you are maximizing your deductions and credits to the fullest extent possible.

Should I hire a tax professional or use tax software?

Whether to hire a tax professional or use tax software depends on your personal preference, complexity of your tax situation, and budget. Here are some points to consider:

Tax software is generally more affordable than hiring a tax professional. If your tax situation is relatively simple, using tax software may be a good option.
Tax professionals can provide personalized advice and guidance that tax software cannot. If you have a more complex tax situation, such as owning a business, multiple sources of income, or investment income, a tax professional may be able to help you navigate the complexities and identify potential deductions or credits you may have missed.
Tax professionals can also represent you in the event of an audit or other tax issues, which can be valuable if you are unsure about how to handle such situations.
Tax software may be more convenient, as you can prepare and file your taxes from the comfort of your own home. You can also complete your taxes at your own pace, rather than working around a tax professional’s schedule.

One of the best online tax software options is also Credit Karma Tax, formerly known as the IRS partner site. Credit Karma Tax offers free federal filing, free filing options for self-employed filers, and expert tax support, including live tax support and tax expert support. Tax software offers a range of features, including direct deposit of refunds, itemized deductions, and the ability to file amended tax returns. Tax software also helps taxpayers pay taxes owed by providing access to IRS forms and offering affordable tax software that fits every budget, with actual prices that are reasonable for both individual tax filers and certified public accountants.

Ultimately, the decision to hire a tax professional or use tax software depends on your unique situation and preferences. You may want to consider consulting with a tax professional to determine what is best for you.

What is the difference between tax software programs?

Tax software programs differ in their features, ease of use, and cost. Some programs are designed for individuals, while others are geared toward small businesses or more complex tax situations. Here are some common differences between tax software programs:

Features: Different tax software programs offer different features. For example, some programs offer a step-by-step guide to help you complete your tax return, while others offer additional support such as audit defense or access to tax professionals.
Ease of use: Tax software programs can vary in their ease of use, from those that are very user-friendly and intuitive to those that are more complex and require some tax knowledge.
Cost: Tax software programs vary in price, from free versions to those that charge a fee based on the complexity of your tax return.
Support: Some tax software programs offer support through phone, email, or chat, while others may only provide limited support.
Compatibility: Tax software programs may be designed for use on specific operating systems, such as Windows or Mac, or may be web-based and accessible from any device with internet access.
Accuracy: All tax software programs are required to meet certain IRS standards for accuracy, but some may have higher accuracy rates than others.
Security: Tax software programs may differ in their security measures, such as encryption of data, multi-factor authentication, and protection against identity theft.

It’s important to choose a tax software program that meets your needs and is compatible with your tax situation.

Can I file my own taxes using tax software?

Yes, you can file your own taxes using tax software. Tax software is designed to guide individuals and businesses through the tax preparation process and make it easier to file taxes. Most tax software will prompt you to enter your financial information and will then automatically populate the appropriate tax forms. Once the forms are completed, the software will also help you file your taxes electronically or print out the forms for mailing. However, it’s important to note that tax software can only help you if you have a basic understanding of taxes and the tax system. If you have a more complicated tax situation, you may want to consider hiring a tax professional to ensure that you’re getting the best outcome.

How much does tax software cost?

The cost of tax software can vary depending on the provider and the specific package or edition you choose. Generally, basic editions of tax software can cost as little as $0 to $20, while more advanced editions can range from $50 to $200 or more. Some providers also offer free federal tax filing for simple returns, but may charge additional fees for state tax filings or more complex tax situations. It’s important to carefully review the pricing and features of different tax software options to find the best fit for your needs and budget.

What should I look for when selecting tax software?

When selecting tax software, there are a few things you should consider:

User-friendliness: Look for a software that is easy to use, even if you don’t have much experience with taxes. The software should be intuitive and guide you through the process step by step.
Forms and schedules supported: Make sure the software supports the forms and schedules that you need to file your taxes. If you have a more complex tax situation, you may need a software that supports more advanced forms and schedules.
Accuracy: The software should be accurate and up-to-date with the latest tax laws and regulations. It should also have error-checking features to help you catch mistakes before you file.
Refund and payment options: Check what refund and payment options are available with the software. Some software programs may charge an additional fee for certain payment methods.
Customer support: Look for a software that provides good customer support. This can include online help articles, phone support, or live chat.
Cost: Compare the cost of different tax software programs to find one that fits your budget.
Security: Ensure that the tax software you select has robust security features to protect your personal and financial information.

What is the difference between tax software providers and tax preparers?

Tax software providers offer tax preparation software that allows individuals to prepare and file their own tax returns electronically. These software programs offer guidance and assistance in completing tax forms and calculating taxes owed or refunds due.

On the other hand, tax preparers are individuals or companies who are trained and licensed to prepare and file tax returns on behalf of others. Tax preparers can include certified public accountants (CPAs), enrolled agents (EAs), and tax attorneys.

The main difference between tax software providers and tax preparers is the level of expertise and personal attention provided. While tax software can be helpful for individuals with simple tax situations, those with more complex tax situations may benefit from the expertise and personalized attention of a tax preparer. Tax preparers can offer advice on tax planning, help individuals navigate complicated tax laws, and assist with IRS audits.

How can tax software help me with health savings account deductions?

Tax software can help you with Health Savings Account (HSA) deductions in a few different ways. First, it can help you determine if you are eligible for an HSA deduction based on your income and other factors. Once it determines your eligibility, it can guide you through the process of reporting your HSA contributions on your tax return.

Additionally, tax software can help you track your HSA contributions and expenses throughout the year, so you have all the necessary information when it comes time to file your tax return. Some tax software programs may even offer specific features for HSA account holders, such as the ability to import data directly from your HSA provider.

Overall, using tax software can simplify the process of claiming HSA deductions and ensure that you are accurately reporting your contributions and expenses on your tax return.

What tax software companies offer support for complex tax situations?

Many tax software companies offer support for complex tax situations, including:

TurboTax: Offers support for small business owners, freelancers, and rental property owners, as well as those with investment income, retirement income, and cryptocurrency transactions.
H&R Block: Offers support for small business owners, self-employed individuals, and those with investment income, rental property income, and foreign income.
TaxAct: Offers support for self-employed individuals, rental property owners, and those with investment income.
Jackson Hewitt: Offers support for small business owners, self-employed individuals, and those with investment income, rental property income, and foreign income.
Liberty Tax: Offers support for self-employed individuals, rental property owners, and those with investment income and retirement income.
FreeTax USA: Offers support for self-employed individuals, rental property owners, and those with investment income and retirement income.

It’s important to carefully review the features and offerings of each tax software provider to determine which one is best suited for your specific tax situation.

What are the benefits of using tax software?

There are several benefits of using tax software to prepare and file your taxes:

Accuracy: Tax software is designed to minimize errors and ensure that all calculations are accurate. This reduces the risk of mistakes and can help you avoid penalties or audits.
Time-saving: Tax software can save you a significant amount of time compared to doing your taxes manually. With tax software, you can automatically import your financial data, which eliminates the need for manual data entry.
Convenience: Tax software allows you to file your taxes from the comfort of your own home or office, without the need to visit a tax preparer in person.
Cost-effective: Many tax software programs are affordable and offer a range of pricing options to suit different budgets. Additionally, using tax software can help you avoid paying a professional tax preparer, which can save you money.
Expert guidance: Many tax software programs offer guidance and support throughout the tax preparation process, helping you to understand complex tax laws and regulations and maximize your deductions.

Tax software is a convenient, cost-effective, and reliable way to prepare and file your taxes. It can help you save time, avoid errors, and maximize your deductions, making it a smart choice for many taxpayers.

What are the disadvantages of using tax software?

While tax software can be incredibly helpful in streamlining the tax filing process, there are a few potential disadvantages to be aware of:

Cost: While some tax software options are free or low-cost, others can be quite expensive, especially if you have complex tax needs. Additionally, some software may require you to pay extra for additional features or services.
Accuracy: While tax software is generally very accurate, it is still possible for errors to occur. If you input incorrect information or make a mistake, it could have serious consequences down the line.
Technical difficulties: Tax software can be complex and sometimes difficult to navigate, especially if you’re not familiar with tax law. Additionally, if you experience technical difficulties with the software or your computer, it could cause delays or other issues with your tax filing.
Lack of personal touch: While tax software can be very efficient and convenient, it doesn’t provide the same level of personal attention or expertise that you would receive from working with a professional tax preparer.
Limited support: Some tax software providers may offer limited support, which could be a disadvantage if you have complex tax needs or questions. Additionally, some may only offer support during certain hours or via specific channels, which could be inconvenient if you need assistance outside of those times or methods.

How do I choose the best tax software for my needs?

Choosing the best tax software for your needs can be a daunting task, but here are some tips to help you make an informed decision:

Determine your needs: Make a list of the features and services you need from a tax software program. Consider your income level, tax situation, and filing requirements.
Research: Research different tax software programs and read reviews from other users. Look for features such as ease of use, accuracy, customer support, and security.
Compare pricing: Compare the pricing of different tax software programs and make sure to factor in any additional costs, such as state filing fees or extra features.
Check for customer support: Make sure the tax software program offers customer support through phone, email, or chat. Check the hours of availability and response times.
Look for security features: Check for security features such as multi-factor authentication, encryption, and secure transmission of data.
Consider integration: If you use other financial software, consider tax software that integrates with your existing software to streamline the process.
Try before you buy: Many tax software programs offer a free trial or demo, so take advantage of this to see if the program meets your needs before purchasing.

Overall, choosing the best tax software for your needs requires some research and consideration of your specific tax situation and requirements.

What should I look for in a tax software provider?

When looking for a tax software provider, there are a few key factors you should consider:

Features: Look for a software provider that offers the features you need to file your taxes accurately and efficiently. This includes support for the tax forms you need to file, as well as any deductions or credits you plan to claim.
Ease of use: Tax software can be complex, so look for a provider that offers a user-friendly interface that makes it easy to navigate and complete your tax return.
Cost: Consider the cost of the software, including any additional fees for state returns or extra features. Look for a provider that offers a transparent pricing structure with no hidden costs.
Customer support: Make sure the software provider offers customer support to help you with any questions or issues you may encounter while using the software. Look for providers that offer phone, email, or chat support, as well as an extensive knowledge base.
Security: Since you will be entering sensitive financial information into the software, it’s important to choose a provider that uses advanced security measures to protect your data.
Reputation: Look for a software provider with a good reputation and a track record of providing reliable, accurate tax software. Read online reviews and ask for recommendations from friends or family members who have used tax software before.

Is it safe to file my taxes using tax software?

Yes, it is generally safe to file your taxes using tax software. Reputable tax software providers use advanced security measures to protect your personal and financial information. This includes encryption of sensitive data, multi-factor authentication, and ongoing monitoring to detect and prevent potential threats.

However, it is important to note that no system is completely foolproof, and there is always a small risk of cyber attacks or data breaches. To minimize this risk, make sure to choose a reputable tax software provider and follow best practices for online security, such as using strong passwords, avoiding public Wi-Fi for sensitive activities, and regularly monitoring your financial accounts for unusual activity.

What happens if I make a mistake on my tax return using tax software?

If you make a mistake on your tax return when using tax software, you can correct the error and resubmit your return. Most tax software programs have built-in error-checking mechanisms that will help you identify potential errors or inconsistencies. However, it’s important to note that tax software is only as accurate as the information you provide. If you enter incorrect information, the software may generate an incorrect return.

If you realize that you made a mistake after submitting your tax return, you can file an amended tax return using IRS Form 1040X. The amended return allows you to correct errors, add missed deductions, or report additional income. You typically have up to three years from the date you filed your original return or two years from the date you paid the tax owed to file an amended return.

If the mistake results in an underpayment of taxes, you may be subject to penalties and interest on the amount owed. It’s always best to review your tax return carefully before submitting it to avoid mistakes or errors. If you are unsure about a particular tax issue or have a complex tax situation, it may be best to consult with a tax professional.

Final Thoughts

In conclusion, tax software can be a great tool for individuals and businesses to prepare and file their tax returns accurately and efficiently. With numerous options available, it’s important to consider your specific needs and look for features such as ease of use, accuracy, security, customer support, and pricing when choosing a tax software provider. While tax software can greatly simplify the tax filing process, it’s always a good idea to double-check your information and seek the advice of a tax professional if you have any doubts or questions.