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Updated on Wednesday, February 20, 2019
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:
- How well the software meets the needs of the intended user (simple filers, stock traders, etc.)
- Price vs. product offerings
- 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 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 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
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
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
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+
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 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 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 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 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 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 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.
|Best For||1040EZ||Homeowners, people with dependents, sole proprietors||Stock market investors without capital gains or losses||Freelancers, real estate investors, people who sold a home in the previous years|
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 Free||Classic||Premium||Self employed||Ultimate|
$0 First State ($29 each additional)
|Best For||1040EZ||All 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 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.
|Best For||1040EZ, 1040A (no dependents, claiming standard deduction)||People with dependents claiming the standard deduction||People with student loan interest, other itemizers.||Real estate investors, stock market investors||Self-employed people and contractors.|
Superlatives: Best for Stock Traders
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.
|Best For||All major schedules supported||Anyone who wants audit support|
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.
|Best For||1040EZ||Stock market investors||Self-employed, real estate investors, itemizers|
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.
|Best For||New filers, people with dependents, people with student loan debt.||Best for itemizers||Real estate investors, self-employed people with less than $5,000 in expenses, stock market traders||Self-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
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.
|Best For||W-2 employees, people with children but no dependent care costs.||Itemizers, people with dependent care costs||Investors, real estate investors||Self-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 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.
|Best For||All major schedules supported||Anyone who wants audit support|
Superlatives: Runner-up Best Audit Protection
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.
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.
|Best For||W-2 Income only.||Itemizers, Self-employed people with less than $5,000 in expenses||Self employed people||Stock market traders, real estate investors, people who sold a home in the previous year|
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.
$39.95 Federal + State
|Best For||Simple 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.
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.