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Best Tax Software in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

The most sweeping tax reform legislation in decades was passed in 2018, and this is the first tax year when filers will feel the impact as they set out to prepare their taxes.

The impact on taxpayers will vary based on the individual. Some folks may get a bigger refund than expected, while others may owe extra money (especially if you’re a homeowner in a state with high property taxes). To help reduce any friction in the tax filing process and ensure that your records are filed correctly, choosing the right tax software is key. Software has only gotten better year after year, and in our third annual tax software roundup, we sought to find you the best tax software options out there.

We personally used all 13 of the products mentioned in this article. Our recommendations of the best tax software are specifically based on the following factors:

  1. How well the software meets the needs of the intended user (simple filers, stock traders, etc.)
  2. Price vs. product offerings
  3. Which has the best functionality (such as user interface, most imports, best navigation, etc.)

Which tax software fits your needs? Find out below. Please note, the prices for tax software change regularly. As the April 15th tax filing deadline approaches, prices for the software tend to increase.

Note: The prices reflected in this article are accurate as of the date of publishing.

The Best Tax Software of 2019

Best free tax software

Of the 13 tax software packages we reviewed only two allow all users to file state and federal taxes for free.

Winner: Credit Karma Tax

Credit Karma Tax Credit Karma Tax has a clean user interface, limited jargon and easy navigation which makes it a top choice for free filers. Additionally, the built-in calculators make Credit Karma appropriate for even complex filers such as those with rental properties or side businesses. This year, Credit Karma Tax also offers an audit assistance guarantee which can be an excellent bonus for this free service.

Runner-up: DIY Tax

DIY Tax, also known as FreeTax.com, is a free service offered by Liberty Tax Service. DIY Tax has built in calculators to support stock traders and rental property owners, and it has excellent support articles. Despite the positives, its user interface is harder to use than the Credit Karma Tax interface. Experienced filers may be able to navigate the software, but newer filers should stay away.

Best tax software for basic filers

We consider “basic filers” to be W-2 employees who don’t need to itemize their taxes, and who only earn income from a W-2 job and interest from bank accounts. Our tax software recommendations for these filers are completely free (for simple filers), and the offer the easiest to use interfaces.

Winner: H&R Block Free

H&R Block Free H&R Block is one of the most robust software solutions for people with W-2 jobs. Its free version allows you to claim the Earned Income Tax Credit, student loan interest deduction, the Child Tax Credit and the Dependent Care Credit, and the Retirement Saver’s Credit.

Runner-up: TurboTax Free Edition

TurboTax Free Edition offers a simple question and answer navigation style which makes it easy to file your taxes. Using the free edition you can claim the earned income tax credit and a child tax credit (but not dependent care credits). Filers who don’t need to itemize or claim other credits will find that TurboTax offers a great experience

Best tax software for students and recent grads

Most students and recent grads have fairly simple tax returns, but many will need to claim the Student Loan Interest Deduction, the Retirement Saver’s Credit, and the Earned Income Tax Credit. These recommendations offer the easiest to use platforms that are free for students and recent grads.

Winner: H&R Block Free

H&R Block Free If you’ve got student loan interest, you can claim an “above the line” deduction for it. However, most tax filing services require you to pay for this deduction. With H&R Block Free edition, you can claim the Student Loan Interest Deduction, the Earned Income Tax Credit, Retirement Saver’s Credit and other critical credits to lower your tax burden. The one drawback to H&R Block Free is that you can only enter W-2 and interest income while still qualifying for the free service. If you’re a side hustler, look to the runner-up, Credit Karma Tax

Runner-up: Credit Karma Tax

H&R Block Free is easier to use than Credit Karma Tax, but Credit Karma Tax is completely free for all users. If you’re a student or recent grad employed in the gig economy (driving for Uber, or renting out a room on Airbnb, etc.), Credit Karma Tax is the best choice for you.

Best tax software for itemizers

In 2019, fewer people than ever before will itemize their taxes. That’s because the new tax laws increased the standard deduction, and the deduction for state and local taxes is limited to $10,000. However, if you’re someone who pays state and local taxes, has mortgage interest to deduct and gives charitably, you may pay less to the federal government by itemizing your taxes.

Read more: Should You Itemize Your Taxes This Year?

Winner: Credit Karma Tax

Credit Karma Tax People who qualify to itemize can use Credit Karma to file their state and federal taxes for free. Credit Karma makes it easy to claim deductions for state and local taxes, mortgage interest and charitable contributions. The interface is clean, and Credit Karma Tax offers free audit assistance guarantees. That means a tax specialist will help you if the IRS audits you. This is an important bonus for itemizers in 2019.

Runner-up: TaxSlayer Classic

TaxSlayer Classic has an easy to use question and answer interface that rivals top contenders H&R Block and TurboTax. Using the interface, you’re unlikely to miss even the most obscure of tax deductions. However, TaxSlayer Classic costs $17 to file your federal taxes and $29 for state taxes, and it doesn’t come with audit protection like Credit Karma Tax.

Best tax software that offers audit protection

The IRS has the right to audit anyone, but people with complex taxes run a greater audit risk. No tax software (or accountant) can prevent you from getting audited. However, some tax software will give you access to a tax specialist or accountant if you undergo an audit. These are the software services that can lend a hand if you need it.

Winner: Credit Karma Tax

Credit Karma Tax In addition to being a free tax filing software, Credit Karma Tax offers a free audit assistance guarantee. If you’re nervous about the potential for an audit, filing with Credit Karma Tax is a good move in 2019.

Runner-up: FreeTaxUSA Deluxe

FreeTaxUSA Deluxe costs $6.99 for federal filing and $12.95 for state filing, and this price includes an audit assistance guarantee. If you’re audited, FreeTaxUSA’s audit specialists will help you understand the issues and help you prepare for the audit. FreeTaxUSA is a software worth considering if you want audit assistance.

Best tax software for stock traders

If you buy and sell stocks, bonds, or options outside of your tax-advantaged retirement accounts, you need a tax software that can handle all your information. Tax software for traders must allow users to import their brokerage statements and have internal calculators that minimize capital gains. Please note, if you only sell a dozen or so positions per year, you may want to consider a free service like Credit Karma Tax.

Winner: TaxAct Premier+

TaxAct Premier+  TaxAct Premier+ allows stock traders to import tax forms from most major brokerages, and it is a bit less expensive than competitors- $39.95 for federal filing and $39.95 for state filing.

Runner Up: H&R Block Premium – Online version

H&R Block Premium online software costs $49.99 for federal filing and $36.99 for state filing. But the price is well worth for active traders. H&R Block allows you to import all major forms from many financial institutions.

On top of allowing users to import tax documents, H&R Block also has accurate accounting for short-term gains and losses. This functionality helps investors minimize the tax they owe.

Best tax software for real estate investors

Real estate investors need to calculate depreciation on their properties, and they need to amortize certain expenses and deduct others. If you’ve sold property in the last year, you’ll also need to calculate your capital gains taxes. With all these moving parts, filing taxes can be confusing for real estate investors. The best tax software for real estate investors needs to feature helpful support articles, intuitive depreciation and amortization calculators, and as many import features as possible.

Winner: TurboTax Premier

TurboTax Premier TurboTax Premier costs $59.99 for federal filing and $39.99 for state filing, but despite the high cost, real estate investors will love it. The real estate portion of TurboTax is superior to all other interfaces on the market. If you use QuickBooks software to manage your real estate accounting, you can connect it directly to TurboTax. If you don’t, you can still upload a Schedule E or use the robust calculators embedded in the software.

Runner-up: Credit Karma Tax

Credit Karma Tax isn’t nearly as easy to use as TurboTax Premier because you cannot connect the software to any accounting app. However, it still offers plenty of functionality for real estate investors. Plus, it’s totally free. It’s built-in calculators make it easy to depreciate or amortize expenses. Its question and answer section also help real estate investors determine whether they qualify for the qualified business income deduction.

Best tax software for self-employed people

Are you a freelancer or contractor? If so, you know that you can deduct many business-related expenses. This means that taxes can get messy in a hurry. The best tax software for self-employed people makes it easy to claim business deductions. It will also offer robust explanations that will help you understand amortizing equipment expenses and whether you qualify for a home office deduction.

Winner: TaxSlayer Classic

TaxSlayer Classic TaxSlayer Classic has one of the easiest to use interfaces in the market, and it’s Classic level makes filing self-employment expenses easy. Plus the Classic level comes with IRS inquiry assistance (audit assistance) for a full year after filing. At just $17 for federal filing and $29 for state filing, TaxSlayer is a bargain for people

Runner-up: TurboTax Self-employed

TurboTax Self-employed offers incredible value to self-employed users. It’s the most expensive product on the market ($89.99 for federal filing and $39.99 per state), but it comes with incredible service. User can reach out to certified tax specialists with an questions, and users who file before the April 15th deadline can get a free subscription to QuickBooks Self-Employed. When you combine those advantages with TurboTax’s unparalleled user interface, the software can be a great choice despite the price tag.

Runner-up: Credit Karma Tax

Credit Karma Tax doesn’t have all the functionality of TurboTax or TaxSlayer, but it is completely free. If your business has straightforward accounting, Credit Karma Tax may offer all the functionality you need.

Best tax software for small businesses

Sole proprietors and single member LLCs can use tax software for self-employed people, but if you’re part of a partnership, a corporation, or a multi-member LLC, then you need more than the standard tax software that we reviewed above.

Corporations need software that supports Form 1120. S Corporations (with more than one member) need tax software that supports Form 1120S. Partnerships and multi-member LLCs need software that supports Form 1065.

Since business tax software is different from individual tax software, MagnifyMoney reviewed just three packages. The software packages include TurboTax Business, H&R Block Premium and Business and TaxAct for Small Businesses.

Winner: H&R Block Premium and Business

H&R Block Premium and Business H&R Block Premium and Business costs $89.95 for the federal and State software (this includes up to five federal e-files. State e-filing costs $19.95 per state. Additional state programs are $39.95 each. H&R Block offers an excellent interview style user interface that DIY business owners need. Plus the software allows users to create employee forms, and it supports the major forms for businesses, plus the form for nonprofit organizations. For most business owners that want to file their own taxes, H&R Block Premium and Business offers excellent value for the price.
Credit Karma Tax is a completely free filing service, and it has a decent user interface. Unfortunately, it has had several technical glitches this year, and Credit Karma has struggled to respond in a timely manner. If you run into trouble, you may want to try a different filing service.

Runner-up: TurboTax Business

TurboTax Business is one of the most expensive software packages on the market. It costs $159.99 for the federal software (which includes up to five federal e-files). On top of that, you’ll pay $59.99 per state and $19.99 per state e-filing fee. However, for most business owners the interface may be worth the price. TurboTax Business offers the same interview style interface that consumers love, but it offers increased functionality. Small business owners will especially love that they can use it to create unlimited W-2 forms and 1099-MISC forms.

Tax Software pricing, plans, and insights

In 2019, MagnifyMoney reviewed 13 unique tax software packages, and selected the best tax software options from those packages. Below, you can learn more about the each tax software, it’s pricing structure, and what to expect when you use it.

Credit Karma Tax

Credit Karma Tax Credit Karma Tax offers free federal and state filing for all users. Credit Karma also offers an audit assistance guarantee for its users. The software doesn’t allow any imports, but it’s clean user interface is easy to use and includes helpful knowledge bubbles that explain tax jargon. Users also can get free technical help when filing through Credit Karma Tax.

Superlatives: Best free tax software, Best tax software for itemizers, Best tax software that offers audit protection, Runner-up best tax software for real estate investors, Runner-up Best tax software for self-employed

DIY Tax

DIY Tax DIY Tax offers free federal and state filing for everyone. It’s user interface is cluttered and the navigation can prove to be confusing. However, the calculators in the software are accurate.

However, real estate investors and small business owners need to be careful with this platform. The depreciation and amortization calculators can be confusing. The software comes with limited technical assistance, but they push Liberty Tax Service offices for more robust tax support. The software doesn’t come with an audit support guarantee.

DIY Tax is sponsored by Liberty Tax Service, and you will see ads for its offices in the software. However, filing in a Liberty Tax office isn’t free.

Superlatives: Runner-up Best Free Filing Service

eSmart Tax

eSmart Tax eSmart Tax and DIY Tax are the same software package. However, you have to pay for eSmart Tax. Why would you pay? The Deluxe and Premium packages offer unlimited phone or email support from tax specialists. This is important if you need tax questions answered. However, in most cases, eSmart Tax is a software package to avoid, it’s simply too expensive to be considered worthwhile.

 

FreeBasicDeluxePremium
Price$0 Federal
$29.99 State
$34.95 Federal
$36.95 State
$45.95 Federal
$36.95 State
$59.95 Federal
$36.95 State
Best For1040EZHomeowners, people with dependents, sole proprietorsStock market investors without capital gains or lossesFreelancers, real estate investors, people who sold a home in the previous years

Superlatives: None

TaxSlayer

TaxSlayer TaxSlayer has an incredible question and answer user interface and helpful support articles. When it comes to itemizing deductions or finding credits, it is one of the easiest to use tax software packages on the market.

Unlike most tax software, TaxSlayer supports all forms on its second-tier Classic level. This means that anyone could complete their entire tax return at a relatively low price. TaxSlayer’s Premium and Ultimate levels gives you access to live chat support, audit protections, and help from tax professionals. The Self Employed tier offers similar but it doesn’t offer audit protection.

However, TaxSlayer has one demerit. It doesn’t allow you to see internal calculations for depreciation and amortization. That makes TaxSlayer inappropriate if you’re a real estate investor or self-employed.

TaxSlayer is also the only software company offering an interest free advance on your refund is TaxSlayer. With TaxSlayer you can get an advance of $500 or $1,000 after the IRS accepts your file. The loan is deposited on a TaxSlayer Prepaid Visa® Card powered by Green Dot. The card charges a $7.95 monthly fee, so you’ll want to use your refund quickly. After your refund appears, TaxSlayer will repay itself and then deposit the remainder of your ` in your bank account.

 

Simply FreeClassicPremiumSelf employedUltimate
Price$0 Federal
$0 First State ($29 each additional)
$17 Federal
$29 State
$37 Federal
$29 State
$47 Federal
$29 State
$57 Federal
$29 State
Best For1040EZAll others (itemizers, stock market investors, real estate investors, self-employed, etc.)Comes with audit assistance, ask a task professional, and live chat support

Superlatives: Best for self-employed, Runner-up Best for Itemizers

TaxAct

TaxAct TaxAct uses simple questions, helpful knowledge articles, and easy navigation to help you complete your taxes. It’s even easy to import your prior year’s taxes into the software. The one area where TaxAct shin

Despite all these praises, the software stumbles somewhat on its real estate coverage. The depreciation calculator seems clumsy in certain areas. Plus, it’s interface isn’t as easy to use as most of the top software packages, but it’s prices are nearly as high.

Overall, TaxAct tends to be a software to avoid unless you’re an active stock trader.

 

FreeBasic+Deluxe+Premier+Self- employed+
Price$0 Federal
$0 State
$9.95 Federal
$19.95 State
$29.95 Federal
$39.95 State
$34.95 Federal
$39.95 State
$49.95 Federal
$39.95 State
Best For1040EZ, 1040A (no dependents, claiming standard deduction)People with dependents claiming the standard deductionPeople with student loan interest, other itemizers.Real estate investors, stock market investorsSelf-employed people and contractors.

Superlatives: Best for Stock Traders

OLT.com

OLT.com OLT.com offers bargain basement pricing, but it shows in the interface. It’s clumsy user interface only allows you to import prior year tax forms from its own database. Its support articles send you to the even more confusing IRS website.

However, OLT.com offers a few bright spots. The health insurance coverage is easy and accurate. It is the only tax software that makes it easy to claim the premium tax credit for part of the year. Also, the real estate depreciation calculators are flexible enough to deal with complex circumstances. In most cases, we don’t recommend OLT.com since there are free options that offer better service.

 

FreePremium
Price$0 Federal
$9.95 State
$7.95 Federal
$7.95 State
Best ForAll major schedules supportedAnyone who wants audit support

Superlatives: None

1040.com

1040.com - Tax Software Pricing According to 1040.com, tax filing should be smart and simple, and to a certain extent, 1040.com delivers. The software is friendly and informative. It offers free live chat and email technical support. It also offers support articles that are approachable and informative.

Unfortunately, it’s friendly interview style interface starts to falter if you’re a real estate or stock market investor. The software doesn’t have built-in calculators which makes it inappropriate for people with complex filing situations.

Although 1040.com is easy to use and has a decent interface for people with simple filing situations, it’s not a recommended software. Users in most filing situations can find less expensive software options that deliver more value.

 

Free$24.95$44.95
Price$0 Federal
$0 State
$24.95 Federal
$19.95 State
$44.95 Federal
$24.95 State
Best For1040EZStock market investorsSelf-employed, real estate investors, itemizers

Superlatives: None

H&R Block Online

H&R Block Online H&R Block is one of the biggest names in tax software for good reason. People with complex tax returns will love the value that H&R Block offers. H&R Block offers unlimited technical support to all filers, and phone and chat tax support for those who pay. The only disappointment is that H&R Block online filing customers do not get a free in-person audit support. This is reserved for those who purchase a $119.99 (plus $36.99 per state) Tax Pro Review service.

However, H&R Block offers easy navigation, helpful interview questions, and robust articles that can help you untangle even the most complex filing situation. H&R Block’s built-in calculators are flexible enough to deal with uncommon tax situations. Plus, you can import most major forms, including prior year’s tax returns from competitors. H&R Block’s software isn’t quite as easy to use as TurboTax, but it’s less expensive in most situations.

 

FreeDeluxePremiumSelf-employed
Price$0 Federal
$0 State
$29.99 Federal
$36.99 State
$49.99 Federal
$36.99 State
$79.99 Federal
$36.99 State
Best ForNew filers, people with dependents, people with student loan debt.Best for itemizersReal estate investors, self-employed people with less than $5,000 in expenses, stock market tradersSelf-employed with more than $5,000 in expenses

Superlatives: Best for Simple Filers, Best for Students and Recent Grads, Runner Up Best for Stock Traders

TurboTax

TurboTax If you’re looking for the Cadillac of tax software, TurboTax emerges as the winner. The interface is easy to use no matter how complicated your tax situation is. And anyone who pays for the service can get help from tax professionals. And the professional help is a step above most other providers. With your permission, support staff can “draw” on your screen to guide you through tough situations.

Real estate investors, self-employed people and small business owners will appreciate TurboTax’s robust interface. However, TurboTax is consistently the most expensive software, so only users who really need TurboTax’s features should pay for the high price.

 

FreeDeluxePremiumSelf-Employed
Price$0 Federal
$0 State
$39.99 Federal
$39.99 State
$59.99 Federal
$39.99 State
$89.99 Federal
$39.99 State
Best ForW-2 employees, people with children but no dependent care costs.Itemizers, people with dependent care costsInvestors, real estate investorsSelf-employed

TurboTax also offers TurboTax Live where you can get help from a CPA. Federal costs range from $49.99 to $169.99 for federal filing and $29.99 to $39.99 for state filing. This offer is available when you create an account with TurboTax.

Superlatives: Best for Real Estate Investors, Runner-up Best for Simple Filers, Runner-up Best for Self-Employed.

FreeTaxUSA

FreeTaxUSA FreeTaxUSA and TaxHawk offer the same tax software at the same price. They are owned by the same parent company, and you can even move your profile from one site to the next. The websites offer a decent user experience, and experienced filers will find everything they need to complete their taxes.

FreeTaxUSA offers two pricing tiers. Both levels support all major tax forms. Users can also access chat support from tax and technical specialists from both levels. However, upgrading to the Deluxe level will give you priority access to tax specialists, and it gives users audit support.

The name might lead you to believe you’re getting free tax filing, but you’ll have to pay at least $12.95 for state filing. Nonetheless, FreeTaxUSA is a great bargain — especially if you have a complex filing situation.

 

FreeDeluxe
Price$0 Federal
$12.95 State
$6.99 Federal
$12.95 State
Best ForAll major schedules supportedAnyone who wants audit support

Superlatives: Runner-up Best Audit Protection

Jackson Hewitt Online

Jackson Hewitt Online Jackson Hewitt brings the neighborhood tax filing office online. They feature excellent knowledge articles and easy interview style tax filing. It’s easy to import your taxes from any major competitor or from Jackson Hewitt. This makes switching to Jackson Hewitt Online easy.

Jackson Hewitt Online has some excellent features including built-in calculators make depreciation and amortization easy. It also offers live chat tech support to all its customers. However, the navigation and built-in knowledge articles are subpar. Those drawbacks make Jackson Hewitt online somewhat difficult to use.

Overall, the Jackson Hewitt Online software is a middle of the pack software, and most users can find better software at lower prices.

It’s important to note that this review is only for the online Jackson Hewitt software package. Magnify Money did not review Jackson Hewitt office preparations.

 

Free$29.99$49.99
Price$0 Federal
$0 State
$29.99 Federal
$36.95 State
$49.99 Federal
$36.95 State
Best For1040EZ

Superlatives: None

Liberty Tax Online

Liberty Tax  Online Liberty Tax Online is identical to DIY Tax and eSmart Tax, but the price is quite a bit higher. While the clunky user interface doesn’t make tax filing easy, the high price tag actually might be worthwhile to some consumers. Unlike Liberty Tax’s other software projects, Liberty Tax Online comes with a Double Check Guarantee.

With the double check guarantee, users can fill out their tax return online and then visit a Liberty Tax retail location. In the Liberty Tax retail outlet, a tax professional will review the user’s form before filing. If you miss anything important, a certified professional can help you out. All of Liberty Tax Online’s packages come with audit assistance guarantees as well.

 

SimpleBasic EditionDeluxePremium
Price$24.95 Federal
$35.95 State
$34.95 Federal
$39.95 State
$54.95 Federal
$39.95 State
$79.95 Federal
$39.95 State
Best ForW-2 Income only.Itemizers, Self-employed people with less than $5,000 in expensesSelf employed peopleStock market traders, real estate investors, people who sold a home in the previous year

Superlatives: None

ezTaxReturn

ezTaxReturn ezTaxReturn has a clean and fairly easy to use interface for people with simple filing situations, but it doesn’t support state returns in every state. Plus, the software is a mess for people with complex filing scenarios need to avoid it. ezTaxReturn doesn’t have built in calculators to depreciate rental property or business depreciation. Additionally, the software only supports one rental property. It also doesn’t support many capital gains calculations such as wash sales, options trading, or selling a rental property.

The only way to qualify for ezTaxReturn’s free offer is if you qualify for the earned income tax credit (EITC), and you don’t have dependents, and you only have W-2 or interest income. Since knowing whether you qualify for the free software can be a challenge, it’s best for most people to avoid ezTaxReturn in 2019.

 

FreeAll others
Price$0 Federal
$0 State
$29.95 Federal
$19.95 State
$39.95 Federal + State
Best ForSimple filers in some states*Anyone else who qualifies.

*ezTaxReturn supports these states: Alabama, Arizona, Arkansas, California, Colorado, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia and Wisconsin. Free returns for Connecticut, Delaware, Hawaii, Maine, Kansas, Nebraska, New Mexico and Utah.

Superlatives: None

Tax Software FAQs

Tax-related identity theft is the number one reported form of identity theft. However, most theft isn’t the direct result of using online software. Any time you apply for a credit card or use online banking, your information enters the digital world. If this information gets stolen, you’re at risk. Nobody can eliminate the possibility of identity theft, but you can work to protect yourself.

Part of protecting yourself involves only giving out your information on trusted websites. When you file your taxes, you provide all your personally identifiable information to a software service. You need to know whether or not that information is safe.

Every software company that we reviewed is an Authorized IRS e-File provider. This means that these sites comply with the security and business standards set forth by the IRS.

None of the software packages we reviewed will sell your personal information to a third party. Each of the software packages we reviewed requires you to use multi-factor authentication. This makes it difficult for hackers to access your personal information. These websites are as secure as possible, but they are not 100% safe.

If you think you’ve been the victim of tax fraud, contact the IRS immediately at 1-800-908-4490 to work with the IRS resolution specialists. You will need to file an identity theft affidavit that explains that someone filed taxes in your name.

If you don’t want to use tax software, you can choose a paper filing option. Each state requires you to mail your check to a different office.You can also use the IRS’s free electronic fillable forms. However, these offer limited guidance and can be difficult to use. With so many other free options, these should be a last resort.

Finally, you can hire a professional tax preparer to do your taxes for you. Be sure that the person you hire is in the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

An accountant can save you time, headache, and in some cases, money. Tax professionals must follow the tax code, but their specialized knowledge helps them pick up on deductions or credits that you might miss on your own.

In general, the more complex your tax return, the more you may want to hire an accountant. If you choose to hire an accountant, be sure that they are an authorized tax return preparer. They should sign your return as an authorized preparer.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah here

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Best of

The Best Health Savings Accounts in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

So, you need to choose a health savings account (HSA) to go along with your new health insurance plan. There are plenty of options out there, and it’s easy to get overwhelmed. The best savings accounts help you save money with high interest rates and low fees—your HSA should be no different. With a high-yielding HSA, you can cover your out-of-pocket medical expenses and boost your savings at the same time.

We’ve taken the work out of finding the best health savings accounts on the market. Using data from DepositAccounts.com (similar to MagnifyMoney, a LendingTree-owned company) we scoured more than 17,100 nationwide banks and credit unions to find the highest health savings account rates available. To ensure quality and availability, we excluded institutions with a DepositAccounts health rating below a B and credit unions with restrictive membership requirements.

Health savings account deposits at all of the institutions listed below are insured by the FDIC or NCUA.

The 10 best health savings accounts in 2019

Institution
APYMinimum balance to earn APY
Great Lakes Credit Union2.00%$100
Connexus Credit Union
2.00%$15,000
Evansville Teachers FCU1.86%$500
Interior FCU1.61%$25,000
Summit Credit Union1.15%$10,000
First Technology FCU1.00%$0.01
The Adirondack Trust Company1.00%$1
Lake Michigan Credit Union1.00%$5,000
Elements Financial1.00%$10,000
Matadors Community Credit Union0.75%$5,000

Great Lakes Credit Union: 2.00% APY, $100 minimum deposit

Great Lakes Credit Union offers the highest health savings account rate on balances from $100 to $2,000. Balances over $2,000 will still earn interest, but at a slightly lower rate (more comparable to rates lower on this list).

You will need to meet a few requirements in order to earn interest on a GLCU HSA. For one, you need to receive a monthly direct deposit of at least $500. You’ll also need to make at least 15 signature-based debit card purchases totaling at least $150. Finally, you must also enroll in eStatements and be active with GLCU’s online Bill Pay or Mobile Banking features.

The account does not charge a monthly fee.

Great Lakes Credit Union was founded in 1938 and now maintains 11 branches in Illinois; however, you can also take advantage of CO-OP Shared Branches and surcharge-free ATMs. To become a GLCU member, you’ll just need to open a Share Savings Account and fund it with at least $5.

Connexus Credit Union: 2.00% APY, $15,000 minimum deposit

Connexus Credit Union also offers a high health savings account rate, but you’ll need at least $15,000 in your account to earn at that rate. Still, you can earn at decent rates on all other balances larger than $100, with higher balances benefiting best. The account doesn’t require a minimum balance or charge a monthly fee. You can request an HSA debit card when you open your account for use at Connexus ATMs.

You can find Connexus branches and ATMs in Wisconsin, Minnesota, Ohio and New Hampshire. Connexus is also part of the CO-OP Shared Branch network, which gives you access to more than 5,600 Shared Branches and more than 54,000 surcharge-free ATMs through both CO-OP and MoneyPass. To open an account with the credit union, you’ll need to become a Connexus Credit Union member.

Evansville Teachers FCU: 1.86% APY, $500 minimum deposit

Evansville Teachers FCU’s Health Savings Checking account earns at a great interest rate on all balances of $500 and over. Plus, there’s no maintenance fees. You’ll need at least $25 to open the account. You can also benefit from check writing abilities, debit card access and payroll deductions with an ETFCU HSA.

ETFCU also offers five HSA share certificates with term lengths ranging between one to five years. Each require $1,000 to open and earn at competitive interest rates. However, ETFCU doesn’t recommend you use HSA share certificates unless you’ve had an health savings account established for a while, since locking money in share certificates make it much harder to to dip into your funds.

You can find Evansville Teachers Federal Credit Union locations in Indiana and Kentucky. The credit union is also a member of the Alliance One ATM network, which offers fee-free access to about 5,000 ATMs. ETFCU was started by several teachers in Evansville, Ind. in 1936 — but you don’t have to be a teacher to qualify for ETFCU membership, though.

Interior FCU: 1.61% APY, $25,000 minimum deposit

Interior Federal Credit Union’s health savings account earns its great interest rate on balances of $25,000 and over. All other balances earn at lower interest rates, with balances of $5,000 and over benefiting the most. The account doesn’t require a minimum opening deposit, nor does it charge a monthly fee.

The Interior FCU Health Savings Account includes an HSA Visa debit card, which you can use for your medical purchases and at over 55,000 surcharge-free ATMs worldwide, including those at Walgreens, 7/11 and WaWa. Interior FCU has only two branches, one in Washington D.C. and one in Reston, Va. However, you’ll also have access to 5,600 Shared Branches/Service Centers in the country through the CO-OP network.

Interior FCU has been around since 1935. To open an HSA with the credit union, you’ll first need to be a member with a Primary Savings account. You can be eligible for an Interior FCU membership in a number of ways, often depending on your place of employment.

Summit Credit Union: 1.15% APY, $10,000 minimum deposit

You’ll need at least $10,000 in your Summit Credit Union Health Savings Account to earn at the most competitive health savings account rate. All other balances still earn interest, but the lower the balance, the lower the rate. Luckily, there’s no minimum deposit requirement, nor is there a pesky monthly fee. The Summit HSA comes with a free debit card, which you can use at Summit, Cirrus and Nyce ATMs.

Summit Credit Union was founded as CUNA Credit Union in 1935 in Madison, Wis.; you can find the credit unions branches throughout southern Wisconsin. Notably, unlike many credit unions, Summit Credit Union has an open charter, which opens up membership to anyone. You’ll need to open Primary Savings account with $5 to become a member.

First Technology FCU: 1.00% APY, $0.01 minimum deposit

First Technology Federal Credit Union’s HSA Checking account is easy to open and own. In addition to its decent rate, it doesn’t charge setup or monthly service fees on its health savings account, nor are there any minimum balance requirements. You just need at least $0.01 to open the account and to start earning interest. To open this HSA, you can call First Technology FCU at 855-855-8805.

You’ll receive a free HSA debit card with the account, which you can use at over 30,000 CO-OP ATMs. You can also visit over 40 First Tech branches and access more than 5,000 CO-OP Shared Branch locations.

You can qualify for a First Tech membership depending on your employment or residence. First Technology Credit Union was founded in 1952 by members of Hewlett-Packard and Tektronix. You can find First Tech branches, known as Experience Centers, in California, Colorado, Georgia, Idaho, Massachusetts, Oregon, Puerto Rico, Texas and Washington.

The Adirondack Trust Company: 1.00% APY, $1 minimum deposit

To get started with an Adirondack Trust Company Health Savings Account, you’ll only need to deposit $1 — after that, there’s no other minimum balance requirement to earn interest. To access your health savings account, you can take advantage of free unlimited check writing and free ATM access with your ATC HSA Visa debit card. Getting paper statements on this account will cost $4, while using online banking will still cost you $2.

Founded in 1901 in upstate Saratoga Springs, N.Y., ATC maintains 13 branches along the Adirondack Mountains area and offers access to two Amsure branches in Saratoga Springs and Albany, N.Y.

Lake Michigan Credit Union: 1.00% APY, $5,000 minimum deposit

While you’ll only need $5 to open a Lake Michigan Credit Union, you’ll need at least $5,000 in your health savings account to earn at the listed APY; balances below $5,000 will have a much lower rate. The account doesn’t charge a monthly service fee and comes with a free debit card. You can use this debit card to pay for your medical costs and withdraw cash at any LMCU branch. You can also access your LMCU HSA funds through unlimited check writing and online banking.

Founded in 1933, Lake Michigan Credit Union offers open and free membership. As you might expect, you can find LMCU branches in Michigan, but there are also several branches in Florida. Plus, in addition to LMCU ATMs, you can also take advantage of over 55,000 Allpoint ATMs.

Elements Financial: 1.00% APY, $10,000 minimum deposit

You can benefit the most from Elements Financial’s health savings account if you have $10,000 available to set aside for future medical expenses; lower balances (of $100 and over) still earn interest, but at lower rates. The account does charge a $4 monthly fee, but you can avoid it by averaging a daily balance of at least $2,500.

The account includes a free Visa debit card, which you can use for purchases and to access your funds with over 78,000 ATMs worldwide through the Allpoint, CO-OP and Alliance One networks. In addition to these ATMs, you can visit Elements Financial branches and over 5,000 CO-OP Shared Branches in all 50 states and 50 countries.

Elements Financial is a credit union that requires membership before you open an account. Founded in 1930, it currently serves employees from over 135 companies in the U.S. If your company is an Elements partner, you can open a checking or savings account or complete an application for a loan or credit card to start the application process.

Matadors Community Credit Union: 0.75% APY, $5,000 minimum deposit

The health savings account from Matadors Community Credit Union requires a minimum opening deposit of $100, but you’ll need at least $5,000 to earn the highest rate tier on the account — you’ll still earn interest with balances of $100 and over, just at lower rates. There’s also a $3 monthly fee on the account.

In addition to a free MasterMoney Debit Card, you’ll also have use of unlimited check writing abilities to use your HSA money. You can use your debit card to make your medical purchases, and at Matadors Community CU and 30,000 fee-free CO-OP ATMs. You can also visit two Matador branches in Chatsworth and Northridge, Calif. or over 5,000 CO-OP Shared Branches. MCCU offers membership to employees of partner employer groups in the San Fernando, Simi and Santa Clarita Valleys of California.

How to use your HSA wisely

Health savings accounts are used only for medical expenses, and if you shop around you can earn interest on your balances with the right account. But did you know HSAs offer tax benefits, too? You fund an HSA with pre-tax dollars, which lowers your taxable income in the year you make the deposit. As long as you spend HSA funds on approved medical expenses, it doesn’t get taxed. If you do use your HSA funds for something other than approved medical expenses, you may get hit with a 20% tax penalty.

This HSA tax advantage can come in especially handy in retirement. Funding an HSA today reduces your tax burden come tax time. If you wait until retirement to make those withdrawals, you can turn your HSA into a significant retirement contribution. Not only has the balance been earning interest for years, but now you can use that money for medical expenses, which tend to pile up in retirement. Plus, after you reach age 65, you can use your HSA for non-medical expenses without triggering the 20% tax penalty, although the withdrawals are taxed like normal income, similarly to IRA withdrawals. This also applies in the event you become disabled or die.

HSA requirements

You can generally open a health savings account if you’re already covered by a high-deductible health plan (HDHP). This works well since the HSA funds can help you cover the higher out-of-pocket costs that usually come with having an HDHP. To qualify for an HSA, you also can’t have other health coverage, be enrolled in Medicare or be claimed as a dependent on someone else’s tax return.

HSA contribution limits

As set by the IRS, the amount you can contribute to your health savings account will depend on your HDHP coverage, your age, the date you become eligible and the date you stop being eligible. For 2018, if you had self-only HDHP coverage, you can contribute up to $3,450 to your HSA. If you had family HDHP coverage, you can contribute up to $6,900.

For 2019, the contribution limits for self-only HDHP coverage is $3,500 and $7,000 for family HDHP coverage.

For tax year 2018, you can make HSA contributions until April 15, 2019. Even if you weren’t eligible in 2018, you can still make HSA contributions until that date for the months you were eligible. If you have an employer contributing to your HSA, they can do so from Jan. 1, 2019 to April 15, 2019. They just have to notify you and the account trustee that the contributions are allocated for 2018.

HSA vs. FSA

A flexible spending account, or FSA, is another type of supplemental medical spending account. Like a health savings account, FSAs are also funded with pre-tax dollars to use towards qualified medical expenses like prescriptions and copayments. FSAs are employer-sponsored, however, and are usually funded through voluntary salary contributions, but your employer can also contribute. You cannot open an FSA if you’re self-employed. No taxes are deducted from your contribution. For 2018, you cannot contribute more than $2,650 to an FSA.

What further sets FSAs apart from HSAs is that you must use the money in an FSA by Dec. 31 of the contribution year, unless you’re granted a grace period or a $500 carryover option by your employer. A big drawback to FSAs is that if you don’t use the money in the account on time, your employer gets those funds. This is also true if you were to leave the company. To the opposite, the funds in an HSA are yours to keep even if you leave your company.

Health savings account vs. online savings accounts

While health savings accounts help you designate funds toward medical expenses, most HSAs don’t earn at the competitive rates we’ve come to see from online savings accounts. A $10,000 deposit into a health savings earning 2% APY would yield $200 after a year of annual compounding interest. This doesn’t fall too far behind some of the best online savings accounts. A savings account earning 2.45% would yield only $45 more than the HSA after a year.

Still, you’ll find plenty more high-yield options to really boost your savings by looking at online savings accounts, and not just for medical expenses. Plus, you typically don’t have to meet any requirements to open a savings account, like having an HDHP or meeting credit union membership qualifications.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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Best of, Reviews

The Top 7 Second Chance Bank Accounts

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Some banks don’t like giving second chances to customers who have less-than-stellar financial histories, especially since it could expose them to expensive risks. A record of bounced checks or debit card overdrafts could easily lock you out of the conveniences of modern banking.

Fortunately, banks also like making money, and some offer special “second chance” accounts that minimize their risk while allowing consumers to stay in the banking system. A second chance bank account gives customers with troubled records a fresh opportunity to demonstrate they can bank responsibly.

When it comes to a second chance account, fees are an unfortunate reality. But some accounts offer customers a better deal than others, and we’ve researched our database to find the second chance accounts with the most reasonable fee structures, while also factoring in whether they provide online and mobile banking, and how accessible accounts are throughout the country.

Second chance account basics

With a second chance bank account, customers shut out of traditional bank accounts get the opportunity to win their way back into a bank’s good graces. Similar to credit bureaus, financial services company ChexSystems maintains records of consumers’ banking histories. Bounced checks, overdrawn accounts or instances of fraud can all end up on your ChexSystems record; if you accumulate enough black marks on ChexSystems, banks could deny your application to open a new account.

Because second chance accounts are meant for customers who have demonstrated bad banking behavior, some lack features of traditional accounts, such as overdraft protection. In the eyes of the bank, you represent too much of a risk for them to extend you such courtesies.

Nobody likes paying fees, and we generally advise consumers to avoid needless banking fees due to the many fee-free banking options available. But fees are the price you pay for access to banking when you have a poor record. Plus, the second chance accounts listed below give you access to online and mobile banking, which is always a plus.

The 7 best second chance bank accounts

1. Tie between BBVA Compass ClearConnect Checking and BBVA ClearChoice Free Checking

BBVA Compass

Regional bank BBVA’s Compass ClearChoice Free Checking product is available as a second chance bank account. Keep in mind that it’s only available to residents of the states where BBVA maintains physical branches: Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. But if you don’t live in those states, you can still avail yourself of BBVA’s Compass ClearConnect Checking account (unless you live in Alaska and Hawaii, in which case you are out of luck).

ClearChoice Free Checking features:

  • Free online and mobile banking, free customized alerts, free online and paper statements, and a free debit card (with option to personalize)
  • $25 minimum deposit to open
  • No monthly service charge to worry about

Fees to watch out for:

  • BBVA ATMs are free, otherwise a $3 fee will apply
  • $38 insufficient funds fee ($32 in California)
  • $15 deposit item returned fee
  • $32 stop payment fee made over the phone or in person ($30 in California); $25 if made online
  • No fee for closing your account within 180 days of opening

You can get a full list of Compass ClearChoice fees for each state here.

LEARN MORE Secured

on BBVA Compass’s secure website

Member FDIC

ClearConnect Checking features:

  • Free online and mobile banking
  • Minimum deposit of $25 needed to open the account
  • No monthly service charge

Fees to watch out for:

  • No fees for using any of the 55,000 BBVA and Allpoint ATMs, but for ATMs outside the network a $3 fee applies
  • $38 insufficient funds fee ($32 in California)
  • $15 deposit item returned fee
  • $32 stop-request fee when made over the phone or in person at a branch ($30 in California); a $25 fee to make the stop-request online
  • $25 account close fee if made within 180 days of opening

You can get a full list of Compass ClearConnect fees broken down by state here.

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on BBVA Compass’s secure website

Member FDIC

2. Wells Fargo Opportunity Checking and Savings Accounts

Wells Fargo Bank

Wells Fargo’s Opportunity Checking and Savings Accounts are tailor-made for folks with a lackluster credit or banking history. With a $25 opening deposit, you’ll get access to a second chance bank account that offers most of the bells and whistles of a traditional bank account. The account does come with a monthly fee, although it’s possible to waive it if you meet a few requirements (see below).

Account features:

  • $25 minimum deposit to open
  • Free transfers are available between Opportunity Checking and Savings accounts
  • You can choose to opt into overdraft protection
  • Free access to bill pay
  • “My Spending Report with Budget Watch” is available if you want to pay extra attention to where your money is going
  • Free debit card with access to more than 13,000 Wells Fargo ATMs throughout the country

Fees to watch out for:

  • $10 monthly service fee, waived if any of the following are true:
    • You make 10 posted debit card purchases or payments
    • You keep a minimum daily balance of $1,500 in the account
    • You receive $500 total in direct deposits each statement cycle
  • $35 overdraft and returned item fee
  • $12.50 overdraft protection transfer fee
  • $15 fee for excess activity (exceeding withdrawals from your savings account)
  • 3% foreign transaction fee with your debit card
  • $5 for money orders
  • $31 for stop payments

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on Wells Fargo Bank’s secure website

Member FDIC

3. Woodforest National Bank Second Chance Checking

Woodforest National Bank

This regional bank has a checking account aptly named Second Chance Checking, to help people rejected by other banks access — provided they live in one of the 17 states where a physical branch exists and can meet the $25 minimum opening deposit requirement. Those states are: Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.

Fees to watch out for:

  • $9.95 monthly maintenance fee if you use a direct deposit (or $11.95 without a direct deposit), $3.00 monthly paper statement fee (which can be avoided if you sign up for electronic statements)
  • $9 one-time account set-up fee
  • $2.50 ATM withdrawal fee when used at a non-Woodforest network ATM
  • $15 debit card set-up fee
  • $29 overdraft fee (for each charge)

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on Woodforest National Bank’s secure website

Member FDIC

4. First National Bank and Trust Company Renew Checking

First National Bank and Trust Company (WI)

First National Bank and Trust Company’s second chance bank account offering is called Renew Checking. You’re eligible for a new account if you live near the bank’s Beloit, Wisc. headquarters, in southern Wisconsin and northern Illinois.

Account Features:

  • No monthly minimum balance
  • $25 minimum deposit to open
  • Free online and mobile banking, bill pay, and e-statements
  • Access to 70,000 no-fee ATMs worldwide through Allpoint and MoneyPass
  • Eligible to upgrade account after twelve months in good standing

Fees to watch out for:

  • $9.95 monthly service fee, or $7.95 with direct deposit
  • $30 early account closure fee (if closed within 90 days of opening)
  • $34.50 overdraft fee
  • $34.50 insufficient funds fee
  • $34.50 stop payment fee

The fee schedule for personal accounts at First National Bank and Trust Company is here.

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on First National Bank And Trust Company (WI)’s secure website

Member FDIC

5. Peoples Bank Cash Solutions Second Chance Checking

Peoples Bank Cash Solutions

This Texas-based bank offers a second chance bank account that is available nationwide, and so long as you don’t have a record of bank or checking fraud on your record, you should be approved for this account. You’ll need to deposit at least $30 before the bank activates your account and provides you with checks and a debit card.

Fees to watch out for:

  • $4.95 monthly maintenance fee
  • $27.50 overdraft fee
  • $27.50 nonsufficient funds fee
  • $3.95 printed statement fee (which can be avoided with electronic statements)
  • $2.00 ATM withdrawal fee at machines not owned by Peoples Bank
  • $25 stop payment fee
  • $20 account closure fee (if within 90 days of opening account)

LEARN MORE Secured

on Peoples Bank Cash Solutions’s secure website

Member FDIC

6. Radius Essential Checking

Radius Bank

Products from online bank Radius are available to customers nationwide, and accessibility is a strong point in its favor. This second chance bank account only requires customers to deposit $10 to open an Essential Checking account, which is lower than some other accounts on this list.

Account Features:

  • A free debit card
  • 24/7 mobile and online banking
  • Access to Radius’s budgeting and personal finance tracking apps
  • Eligibility to upgrade to Radius’s Reward Checking account after 12 months of positive banking history

Fees to watch out for:

  • $9 monthly maintenance fee
  • $25 per item non-sufficient funds fee (waived on all overdraft items $5 or less)
  • $5 daily overdraft fee

LEARN MORE Secured

on Radius Bank’s secure website

Member FDIC

Alternatives to a second chance bank account

Get a prepaid debit card

Tired of the traditional banking experience? You could opt for a prepaid debit card instead. With a prepaid card, you can load money onto it and spend at merchants that accept major credit and debit cards. But if you try and spend more money than what’s on the card, the transaction is declined — although this prevents you from accruing any overdraft or insufficient funds fees. This is useful if you feel you may still have trouble managing your spending and need an extra layer of security to prevent you from getting into trouble.

Some prepaid cards offer extra perks like advance direct deposit and free ATMs so long as you stay in their network.

Open a secured credit card

You may also have better luck applying for a secured credit card if your credit score is in good enough shape. Usually, this requires depositing cash with the lender, who then gives you the credit card for the same amount. Each month that you make on-time payments, the bank will report that good behavior to the credit bureaus, helping you boost your credit score. At the end of the payment period (generally 12 months, though it varies by banks), you’ll get the full deposit back.

Secured cards can come with high interest rates and many don’t feature the enticing rewards other high-end cards do, but they get the basic job done for consumers who don’t need a card with a high credit limit.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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