Tax time is here and so are your W-2s since most employers sent them out to arrive by the end of January. In fact, business taxes are due in many states in mid-March! So, it’s time to get started and get rolling, especially if you are due a refund check.
But, when tax season comes around each year there are those who always go with a name they know, those who go straight to an accountant and those who are willing to shop around. We will point out some strengths and weaknesses of each tax product company and also share our choices for the best of the best to help you decide which service best suits your needs.
What Features Should Be Offered By Most Tax Software?
Not all tax product offerings are the same, but there are some features that you should always look out for when it comes to picking the right tax product for you. Below we will cover some of the features that every worthwhile tax software should offer.
Direct Deposit Refund
Direct deposit may not seem like such a big deal, but it is a much faster way of receiving a tax refund and most tax companies these days prefer it (some even offer discounts for using it). Direct deposit may not be a must-have feature on your list but if you are looking for a reputable tax company to go with, the chances are that they offer it as an option.
In the age of technology, utilizing electronic filing is the same as utilizing direct deposit refund services. Most big tax service providers offer the opportunity to electronically file your taxes.
Error checks are an important part of tax filing for any software user. To file your taxes is one thing, but to file taxes and catch any potential errors or mistakes is another. Often we spend so much time working on our taxes that we can neglect to notice even the most obvious mistakes so it is important to have a second line of defense to minimize the risk of an IRS audit. Most reputable tax products these days offer error check services.
There should be no question that a tax service provides the opportunity to file federal returns.
Pay Only When You File
Where filing taxes used to mean purchasing software before filing taxes, now tax products can often be downloaded online and taxes can be e-filed as well. This often means not having to pay until your taxes are filed. The ability to complete your taxes using a service before paying for it shows that the company has confidence enough in their product to let you try it out before paying their fee and provides you hands-on evidence as to why you should have confidence in it as well.
Not all filing software provides the opportunity to file state returns in addition to federal returns but these days so many do offer this feature there really is no excuse for not offering it. A state return feature makes filing your taxes a much easier and more streamlined process and allows you to get everything taken care of in a single session with less hassle.
Tax Return Status Check
Filing taxes is a stressful process and it can be particularly frustrating not knowing the status of your tax return. These days most reputable tax software provide the opportunity to check the status of your tax return online, this makes the whole tax filing process much easier by giving you a peace of mind. It also allows you to better budget when any refund monies will be coming into your bank account.
Saving lots of money on taxes is worth the few dollars more spent today on this software vs. the competition. TurboTax is our #1 pick, with up to five e-filings per purchase you can file taxes for the whole family. Plus 1040EZ filings are free. The program seamlessly integrates with your specific state’s tax filing systems. Top that with great customer support, a professional audit and tax consultant service and you’ll find TurboTax is hard to beat. This is why they are our choice for best tax company.
TurboTax Refund Bonus Program
Again this year, TurboTax offers federal tax e-filers the option of using $100 increments of their federal refund to purchase an Amazon gift card, and filers will receive up to 10% more on the gift card. Users of the Free Federal Edition are not eligible for this bonus program.
- 5% extra on the gift card for users of Basic software or CD, Deluxe online, Premier online, or Home and Business online.
- 10% extra on the gift card for those who purchase software or CD of the Deluxe, Premier, or Home and Business Editions.
Don’t let the big brand name scare you off, this is a solid tax program and is our number two choice with a price tag that is hard to beat. H&R Block tax software supports all entities looking to file taxes but they also offer top of the line support services with the exception of user forums. The only thing this software lacks is the cost of filing state returns. Otherwise the features are similar to TurboTax and come at a lower price.
H & R Block Refund Bonus Program
This season H & R Block has a similar bonus program to TurboTax’s offer, but H & R Block offers a wide variety of gift card options. When you’re ready to e-file you choose any $100 increment of your federal return toward the purchase of e-gift cards from a number of retailers, including Target, Best Buy and more than 40 retail stores, restaurants and services.
- Using Federal Free Edition or Basic, you can get an extra 5% on each gift card.
- Using Deluxe, Premium, or Premium & Business, you can get an additional 10% on each gift card.
This is another popular program that you can buy at a competitive price. If you are not looking for live chat or help forums, this program has a lot to offer at a good price. New this season is comprehensive assistance to help you calculate your tax credit and penalty amounts due to the Affordable Care Act. TaxACT falls just above the middle of the road due to its extreme affordability and the ability to file taxes no matter what entity you are filing as, making it our #2 pick. TaxACT may fall short in customer help and support with a lack of help forums and live chat but in all other aspects we considered, it offers a lot for the price.
Tax Software Comparison Table
As a result of the large size of our tax product comparison table, we are placing it on a separate page so you can reference it more easily. Please visit our tax software comparison table (or click on the image on the left) for feature details of the tax products that we review in this article. We will do our best to continue to add to this table as we find additional companies, and update the current software listed as they add new features.
You’ll find a list of terminologies at the bottom of the comparison table, as well as at the bottom of this article.
What Are My Options When it Comes to Tax Software Services?
In order to help you to narrow down which tax company may be best for you this year, we have put together a tax service comparison table that highlights the main features of each of the tax company’s offerings along with their pros and cons.
If you’d like to jump straight down to the reviews, you can choose from the following tax preparation providers:
CitizenTax is no longer a tax solution as of January 2015.
eSmart Tax offers free basic Federal filing and for-purchase Basic, Deluxe and Premium editions that are affordable compared to similar competitor offerings, particularly with the features they offer. Although all filing options are online (no downloadable software), users should take a serious look at eSmart. They have exceptional customer service options compared to most of their peers (including the option of in-person support at any Liberty Tax location). And their website, clearly upgraded from previous years, offers easy-to-use navigation and guidance, and a number of helpful tax filing resources that are easy to find and understand. While eSmart doesn’t provide for larger business filings, mid-level users may want to consider eSmart Tax compared to other similar options.
Of all of the tax products compared in this article, ExpressTaxRefund offers the least amount of services for one of the highest fees. ExpressTaxRefund is not the service for you if you are a big business, a rental property owner, or looking for consultation from a tax professional before filing your taxes.
FreeTaxUSA stands out due to their 100% free Federal tax filing. This service also provides an automatic refund calculator. Check out the pros and cons below and decide how this free tax provider compares with the paid alternatives. Use coupon code FREETAXUSA10 to receive 10% off!
TaxSlayer may have the prices that you are looking for when it comes to filing your taxes but there are a few areas where this service falls short. Some of the major features that lack in this service includes customer support. If you aren’t looking for a wealth of customer support options and if you aren’t concerned with audit defense, TaxSlayer could be a good option for you…unless you are a big business.
TaxBrain is one of only two services we reviewed in this article that doesn’t offer free federal filing for the 1040EZ, and its various editions can get expensive depending on your filing needs. But if you’re looking for a lot of customer support options and an easy initial questionnaire to help you determine which forms you need to file, that’s where TaxBrain’s strengths lie. Unlike many of the other services, TaxBrain offers the option of email, telephone and live chat support. And as a company backed by Liberty Tax, you get the security of having an online tax product associated with a large, respected national company. Use coupon code MRFOTB to receive $10 off through 2/28/2015.
When looking through the table above it can be a little frustrating to have to look up what certain terms mean. Below we have outlined what these terms mean so that you can use them as a key when looking through our tax software comparison
- 1040 & Itemized Returns: For those who have 1040 forms to file or who are using itemized returns this year.
- 1040EZ & Simple Returns: For those who have 1040EZ forms to file or who have simple tax returns this year.
- Audit Defense: A service provided by a tax company that provides assistance to you in the case that you are audited by the IRS after using their product for the year’s tax return.
- Big Business: Software for a corporation or LLC.
- Direct Deposit Refund: Option to receive your tax refund directly into your bank account through a direct deposit.
- Electronic Filing: Allows you to file your tax return online through electronic transmission. This is generally an instant process but may require the faxing or mailing of a signature form.
- Email Assistance: The Software offers direct assistance for users via email contact.
- Error Checks or Alerts: Provides error checks and/or prompts you with alerts to let you know that there is something in your tax return that does not “add up” or that may flag you for an audit with the IRS.
- Federal Filing and Program Use Cost: Cost for filing your federal tax return using this product.
- Final Tax Review: Provides a final review of your tax filing to check for issues before transmitting your return.
- Free 1040EZ Federal Filing: Gives you the option to free file if you are filing a 1040EZ.
- Help Forums: Offers help forums where users can ask for help in regards to using the software, as well as general tax related questions and issues.
- Investment or Rental Property: Provides the ability to claim investment or rental property income or loss.
- IRS Acknowledgment in 48 Hours: Lets you know within 48 hours that your return has been accepted or rejected by the IRS.
- IRS Publication Library: Provides access to the IRS publication library which includes helpful tax publications that have been written in plain language format by the IRS to help taxpayers like you have a better understanding of specific tax concerns.
- Live Chat: Offers a live chat service to instantly get answers to your questions. Some software companies charge an additional fee for this service.
- National Average Comparisons: Provides comparisons to help you compare your overall tax year to others in the nation.
- Pay Only When You File: Software does not charge you until you are ready to final file your tax documents.
- Refund Meter: A visual meter to keep track of your refund or amount owed for the tax year as you go through the tax preparation process.
- Self Employed and Sole Proprietor: Can be used if you are self employed or a sole proprietor.
- Small Business: Can be used to file a tax return for a small business.
- State Filing Cost: The cost of filing a state tax return with this software. The amount for state filing will vary by state for most software.
- State Returns: Gives you the ability to file your state tax returns.
- Tax Consultant Availability: Has a real, live tax consultant on hand to go over your return with you before you file. This option is generally an additional fee.
- Tax Data Importation Feature: Allows you to import tax data from a previous year in to the software.
- Tax Return Status Check: Provides the opportunity to check the status of your tax return after it has been e-filed to find out when you might get any refund back that is due to you.
- Telephone Assistance: Provides the opportunity to receive help from a real, live tax professional over the phone. Sometimes this is an additional fee.
- Tutorials: Provides tutorials to help ensure that you know how to use the software and all of its components correctly.
Deciding Which Tax Software is Right For You
The key to finding the right service for you is identifying the one that suits your biggest needs and you are comfortable using.
- One of the first things to look at is whether or not you understand the interface that the service uses. Many software options now offer tutorials and walk through’s to ensure that you do not face any difficulty in using their service.
- Once you find a software you are comfortable with using, you will need to ensure that they allow for filing as your specific entity. There is no use being proficient at a software if you are filing as a big business and the software does not allow for big business filing!
- The next thing you will need to consider is the cost of the software you are looking at. There are a wide variety of options to select from and you should be able to find one that suits your budget.
After these minimal requirements have been met, choosing the right software for you is just a matter of which features you are looking for when filing your annual tax return!
Which tax software do you use and why?
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