The best tax software can help you file your federal and state tax returns easily and without having to shell out big bucks.
In fact, many online tax prep tools featured on this list are free for eligible customers and provide different levels of customer support for novice and seasoned tax filers alike.
Our Top Picks for the Best Tax Software of 2021
Best Tax Software Reviews
- Easy import for investment documents
- Free for active duty, reserve and National Guard members
- Most expensive online tax software
|TurboTax Live||$80 (plus state)||$120 (plus state)||$170 (plus state)||$200 (plus state)|
|Turbo Tax Full Service||$130 (plus state)||$200 (plus state)||$170 (plus state)||$200 (plus state)|
Intuit’s TurboTax is probably the best-known online tax-prep software out there. It’s also one of the most expensive — at least, for users of its paid products.
TurboTax has a Free Edition and three main pricing tiers: Deluxe, Premier and Self-Employed. Its Deluxe package is best for users with fairly simple returns who want to maximize tax deductions and credits, while its Premier tier is better suited for individuals with investments such as rental property, stocks, bonds, or cryptocurrencies. Those who opt for the Self-Employed tier get a personalized audit assessment, easy imports from Quickbooks and other sources and all of the services in the Free, Deluxe and Premier tiers, all of which include online assistance.
TurboTax’s Free Edition is available to tax filers who receive W-2 income and/or Social Security benefits and don’t itemize deductions. It can accommodate taxpayers who qualify for the Earned Income Tax Credit, who plan to claim the child tax credit and who received unemployment income.
TurboTax also offers free federal and state tax filing to active duty and reserve military, including members of the National Guard, with E1-E9 classifications. As a service member, you’ll get free access to Deluxe, Premier and Self-Employed products. Filers simply have to go to the regular TurboTax portal and enter their rank to file using any TurboTax product tier.
Why we chose TurboTax:
One great TurboTax feature is the ability to import investing gains and losses from a variety of sources. “There’s been a rise in the number of people investing,” says TurboTax tax expert Lisa Green-Lewis. “Taxpayers had a pain point of inserting all their info for transactions, like stock and cryptocurrency sales,” she says, and the software facilitates that.
- Multiple add-on products
- Option to file expat taxes online with an advisor
- Must pay an additional cost for on-demand support
|State||$0||$44.99 (per state)||$49.99 (per state)||$49.99 (per state)|
H&R Block offers products comparable to those of its main competitor, TurboTax, but at a lower price point.
Its Free Online filing option for simple returns is easy to use and offers the ability to import your previous year’s tax return from another provider. If you have a more complicated return, there are three paid tax-filing software tiers: Deluxe, Premium and Self-Employed.
H&R Block offers an option to file with a tax pro, either in person, online or by dropping off your documents at a local office. There is also a hybrid service for those who prefer the DIY approach, the Tax Pro Review, which provides filers the assurance of an extra (and professional) set of eyes on their returns.
H&R Block specifically targets the growing number of taxpayers who have a Health Savings Account (HSA). These “triple tax-exempt” accounts are funded with tax-deductible contributions, and H&R Block offers to maximize deductions and credits for filers who have them. However, this service is only available through the company’s paid tiers.
Why we chose H&R Block:
With H&R Block, there are four ways to file your taxes, including e-filing on your own or with a tax professional. You can also file in person or drop off your tax documents at your local H&R Block.
As one of the leading tax software providers, H&R Block has a streamlined interface that’s easy to navigate. It offers comprehensive explanations on all tax forms and a clear step-by-step guide to help you file taxes on your own. You can always upgrade your package at an additional cost to get instant access to a tax professional.
- Get your maximum refund, backed with $100,000 accuracy guarantee
- Navigate your tax return easily using TaxAct Bookmarks
|State||$39.95 (per state)||$54.95 (per state)||$54.95 (per state)||$54.95 (per state)|
Visitors to the TaxAct website are greeted with a user-friendly, multiple-choice dashboard that quickly funnels you towards one of four options: one free and three paid, ranging from $29.95 to $64.95. You don’t have to be in the most expensive tier to access filing options for a variety of income types, including royalties, K-1 (partnership) income, or investment and real estate income, along with forms for holders of foreign bank and other financial accounts.
If you’re a military member, TaxAct offers a free package for federal and state filing for all active-duty service people via the TaxAct military landing page. The offer will be applied once you enter your eligible Employer ID Number during filing.
TaxAct offers a fairly robust calculator you can access under the Tax Tools tab. If you’re reasonably well-versed in the terminology, you can play around with the tool to get a ballpark idea of your estimated taxes without committing to anything. TaxAct ensures that you’ll get your maximum refund, the company offers up to a $100,000 guarantee.
Why we chose TaxAct:
TaxAct is worth considering if you have different income streams, are an entrepreneur, contractor or self-employed. The Self-employed tier covers freelance income (including 1099-NEC), farm and business income, and depreciation calculations, plus circumstances covered in the Premier tier. Its product offerings are also straightforward and you won’t be bombarded with pitches for a refund anticipation loan.
- In-person customer service
- Virtual tax pro assistance is available
- Pitches for pricier products
|Services||Online||Standard Tax Pro from Home||Deluxe Tax Pro from Home||Premier Tax Pro from Home|
|State||$24 (unlimited)||$24 (unlimited)||$24 (unlimited)||$24 (unlimited)|
Since Jackson Hewitt’s bread and butter is in-person tax-prep help, you have to scroll a bit down the main webpage to get to the online tools. Jackson Hewitt is better known for its pop-up shops and kiosks that sprout up in strip malls and big-box stores during tax season, but the tax preparer also has online software for people who want to file their taxes from home.
Jackson Hewitt offers one option for online DIY filers, in addition to three more expensive tiers for people who want the help of virtual tax pros. Its Standard Tax Pro From Home tier is suitable for unlimited W-2s as well as unemployment income, student loan interest, IRAs, Social Security income and dividend income up to $1,500. The Deluxe package covers homeowners and those with dependents and itemized deductions, while the Premier tier supports self-employed individuals.
Why we chose Jackson Hewitt:
Jackson Hewitt is a safe bet if you prefer to file your tax returns with the assistance of a tax professional. Apart from having in-person options at your local mall during tax season, its customer support is comprehensive and even includes IRS audit assistance. It’s also one of the few tax preparers that don’t charge for every state filed; you’ll get unlimited state tax returns for a set fee of $24. That being said, Jackson Hewitt is one of the pricier tax software companies on our list. If you’re looking to save money, there are other options available.
- More affordable than other tax software providers
- Maximum accuracy guarantee
- Upgrade required for on-demand support
|Services||TaxSlayer Military||Simply Free||Classic||Premium||Self-Employed|
|State||$39.95||$0||$39.95 (per state)||$39.95 (per state)||$39.95 (per state)|
For freelancers or self-employed filers, TaxSlayer’s advantage is clear: it’s cheaper than the other alternatives out there. For $55 — the most expensive of its three paid online tax prep tiers — you get live chat assistance from tax pros as well as estimated tax payment reminders. (The free offering from TaxSlayer, though, is a bit more no-frills than some competitors’ free versions, and could be best only for people with super-simple returns.)
If you’re an active-duty military member, TaxSlayer offers free federal tax filing for all income types, deductions and credits via the landing page. However, you’ll still have to pay for filing state taxes, which costs $39 per state.
Why we chose TaxSlayer:
TaxSlayer doesn’t try to lure you in with the pitch of a (potentially pricey) refund anticipation loan, which we appreciate. For small-business owners or self-employed independent contractors with a modicum of confidence in their tax knowledge, TaxSlayer can offer a decent product at an affordable price.
- Navigation sidebar with installed customer support tools
- Best for simple DIY tax returns
- Pay for on-demand customer support
|Services||Free Federal Basic Software||Deluxe Plus E-file||Premium Plus E-file|
|Federal||$0||$25.99 or $19.49 with coupon code 25OFF||$45.99 or $34.49 with coupon code 25OFF|
|State||$21 (per state)||$21 (per state)||$21 (per state)|
E-file emphasizes speed on its homepage, boasting that many users can file their taxes electronically with its online software in less than 15 minutes. It’s not only fast, but it’s also generally less expensive than other tax preparers. E-file has a basic option for federal filing, but even its Deluxe Plus and Premium Plus tiers come in under $35. It accepts promo codes, too.
E-file will automatically save your progress as you complete your tax forms. Though the platform is entirely online and promotes electronic filing, it will still let you print out your tax forms to mail in yourself. If you encounter a question before that point, you can pay for phone or email assistance.
Why we chose E-file:
If you’re a budget-conscious filer who just needs the basics, E-file gets the job done and offers year-round promotions and discounts that can help you save. Its filing process is simple: once you create an account, enter your taxpayer information and E-file will prepare your return. The standard interface features prior-year import and a help (support) sidebar that guides you every step.
- Free tax storage for up to seven years
- Free tax extension filing (federal)
- Customer support is not comprehensive
|Services||Free Edition||Deluxe Edition|
|State||$14.99 (per state)||$14.99 (per state)|
FreeTaxUSA is an online-only tax service that’s well-suited for filers that are looking for a bargain. Whether your tax situation is simple, basic or advanced, you can file your federal tax return for free. State returns are a flat rate of $14.99, regardless of the complexity of your return.
FreeTaxUSA features easy prior-year imports from TurboTax, H&R Block and TaxAct. However, there is no document import feature, meaning you’ll have to enter some of your tax information manually.
The tax software provider also says it helps military members get the biggest refund available by supporting tax breaks such as combat pay exclusion, moving expense deduction, uniform deduction, reservist’s travel deduction, job search expenses, EITC for Nontaxable Combat Pay and more.
The downside, however, is that if you need extra support, you’ll have to sign into your account and use the Quick Responses message center. According to FreeTaxUSA, email responses from customer support will typically take around half an hour.
Why we chose FreeTaxUSA:
FreeTaxUSA offers free filing for people in all tax situations such as filing jointly, homeownership, dependents, itemized deductions, self-employed, investments, rental property, retirement and tuition program distributions. If you’re comfortable filing your tax return on your own with little or no assistance, FreeTaxUSA fits the bill. Once you file your return, it will be automatically stored as a PDF for up to seven years.
- Free filing for federal and state taxes
- Supports most major IRS and state forms/schedules
- Doesn’t support easy import of investments
If you want to file your taxes for free, most of the leading tax preparation software providers out there have strict income limits for you to qualify. Free offerings are also often limited to people with super-simple returns, forcing filers with complex returns to dip into their bank accounts to prepare and file their taxes. This is not the case with Credit Karma; the company offers comprehensive filing for federal and state returns for free.
Credit Karma, primarily known as an online platform that aims to help its users achieve personal finance and credit score goals, has developed an e-file product: Credit Karma Tax. It supports most major IRS forms and schedules as well as many other tax situations that other freebie tax software providers don’t accommodate, such as student loan interest or rental property income. To facilitate your tax preparation process, Credit Karma is equipped with easy-to-use navigation tools to guide you every step of the way. You can also easily import your 1040 using their Smart File feature on the Credit Karma Tax mobile app or your computer.
Credit Karma Tax is available in 40 states. However, its services are not available in states that offer free online tax filing services. Unfortunately, while Credit Karma Tax offers guided support during your filing process, you won’t be getting it from a professional as with other paid competitors. If you’re comfortable with a DIY tax software and don’t need one-on-one support, Credit Karma Tax could be worth considering.
Why we chose Credit Karma Tax:
Credit Karma Tax is the only tax software provider that offers a completely free tax filing service for federal and state returns. The provider offers support for most tax situations and forms, including Schedule C. You can easily import prior year returns from H&R Block, TurboTax and TaxAct. Credit Karma Tax also offers free audit defense and an accurate calculations guarantee, if the service makes a mistake you could receive $1,000.
- Wide range of tax software options
- Can service small and large corporations
- Must be renewed every year
|Free Trial||ATX Pay-Per-Return System||ATX 1040||ATX Max||ATX Total Office||ATX Advantage|
|Add-on: Advanced Calculations Compliance||N/A||$549||$549||$549||$549||Included|
|Add-on: Enhanced Asset Management||N/A||$350||$350||$350||$350||Included|
|Add-on: Return Retrieval||N/A||$155||$155||$155||$155||$155|
Drake Tax has provided tax software services to preparers since 1977 and has offered electronic filing since it became available. Drake Tax has helped a wide range of offices produce accurate and compliant tax returns. Most notably, Drake Tax offers multiple professional tax software options that can service small offices that work with lower-income taxpayers to large CPA firms that support the more complex end of the market.
If you have trouble understanding a form, Drake Tax has a customer support line that’s available from December to April 20. You can also safely email the tax return to a customer support specialist to get hands-on assistance and resolve an issue within a week’s time.
Why we chose Drake Tax:
Drake Tax offers multiple tax preparation software package tiers designed to meet the needs of any professional — from a single CPA working from a home office to a large corporation. For instance, Drake’s ATX Pay-Per-Return System is great for tax preparers who may not manage large quantities of returns a year.
- Flat-rate price
- Cheaper than most tax prep software
- No on-demand live support
|Federal||$25 (flat rate)|
If you’re looking for a no-frills affordable tax preparation software, 1040.com offers flat-rate pricing of $25 for federal and state taxes. The online-only software provider is filer-friendly and equipped with a sophisticated walkthrough system that guides you through your tax return.
Navigation is simple. Once you get started you can use the “tell me more” button to learn more about your taxes or ignore it and continue scrolling. If you’re familiar with your tax forms and don’t need a step-by-step walkthrough, you can save time and use the menu to jump between forms.
Should you need support from a tax expert, 1040.com has a service team available through chat and email (no upgrade required). That being said, if you prefer talking with an expert via phone, this may not be the option for you.
One drawback of 1040.com is that it’s limited to W-2 imports, any other tax statements must be entered by hand. Overall, 1040.com offers straightforward pricing if you’re comfortable filing your taxes without much support.
Why we chose 1040.com:
1040.com is a budget-friendly tax software if you want to file federal and state returns at a flat, cheap price. The provider supports prior-year imports for return filers and W-2 import, which can speed up half of your tax prep process. You’ll also get three-year security storage of your tax returns.
Other tax software companies we considered
- Library with over 6,000 tax compliance forms
- Additional integrations for easy import
- Robust diagnostics to catch errors
- Designed for tax professionals
- Best suited for mid-sized accounting firms
- Great for simple tax returns
- Safe storage for up to three years
- More affordable than most tax prep software
- Available only in 21 states
- Email customer support only
- Licensed tax practitioners, CPAs on staff
- Assist with tax prep, planning, resolution and accounting
- Free phone consultation
- Must create an account to learn about pricing tiers
Tax Software Guide
What is a tax software
Tax software programs are designed to help the average taxpayer accurately prepare and file state and federal income tax returns.
Online tax software can be a cost-effective way to file your tax returns from the comfort of your home, and the products don’t require any previous experience for you to navigate them.
If you need extra support, almost all tax software programs are equipped with tools to help you answer common questions regarding your returns. That may include a glossary defining common tax terms, a step-by-step navigation bar or a live chat or consultation with a tax professional.
How tax software works
Tax software programs generally use two types of interface to coach you through your tax return: an interview-style questionnaire or a form-based step-by-step guide.
Most tax preparation software programs also feature simple navigation tools that allow you to upload returns from prior years, W-2s and investment documents. This can save you a substantial amount of time as the software automatically imports your information into your return.
Once you’re done entering all your information, tax software programs often run a diagnostic on to check for errors, verify that your information meets legal state provisions and check whether you’re eligible for certain income adjustments or tax credits before you file.
After you file, you can easily track the status of your tax refund through the company’s online portal or the IRS website.
Tax Software Pros & Cons
Tax preparation software programs are a great resource for taxpayers who want to save time and file their returns from home. However, these services may not be for everyone.
Here are some advantages and disadvantages of tax preparation software.
|Easy-to-use: Most tax preparation software programs are designed to offer step-by-step guidance to help filers with limited knowledge prepare their tax returns easily.||Complex tax returns can be expensive: Tax preparation software programs often have tier packages that increase in cost according to the complexity of the return and the services needed.|
|Available online: Online tax software programs allow individuals with busy schedules to file their tax returns on their own time from a mobile device.||On-demand customer support may cost more: You may have to pay an additional cost to get one-on-one support from a tax professional.|
|Safe storage of files:Tax preparation software providers often save your tax returns automatically so can easily access or download your tax information whenever you want.||Limited customer support:Some cheaper tax preparation software providers may not offer the support you need. An email or chat feature may not be enough to help you navigate your tax return.|
|Save money:Filing your tax returns online is often less expensive than hiring the services of a CPA. In some cases, you can even file for free.||Not all tax software support complex returns: In some cases, you may be better off hiring the services of a CPA to handle difficult tax returns.|
Tax form glossary
Since making sense of tax return forms can be quite, well, taxing, here are a few common forms you may come across.
Form 1040 is an IRS form used by U.S. taxpayers to file their annual income tax returns. The majority of taxpayers use a 1040 form to report their income tax for the year and any refund or additional tax owed.
Aside from a standard form, there are three other types of 1040 forms:
- Form 1040-SR, for senior taxpayers over 65
- Form 1040-NR, for non-U.S. citizens who don’t have a green card
- Form 1040-X, for taxpayers who need to make amendments after filing a Form 1040
A W-2 is a tax form that shows your total wages paid as well as federal, state or other income tax withholdings for the year as reported by your employer. The IRS requires employers to send W-2 forms to their employees no later than January 31 following the end of the tax year, which generally falls on December 31.
Form 1099-INT is used to report the amount of interest a company or entity paid to you.
Banks and financial institutions use form 1099-DIV to report dividends and other distributions you have received. If the dividends or interest you earned exceeds $1,500, you may also be required to fill out a Schedule B.
Form 1098-E is used to report the amount of interest you’ve paid in a year toward your federal student loans. You’ll receive your 1098-E via email or postal mail if the interest you paid exceeds $600 (2020). You can also download a copy of your 1098-E from your loan servicer. In some cases, you may be eligible to deduct a portion of the interest you paid on your federal tax return.
Form 1098-T is a tuition statement form that reports the amount of college tuition you paid during a calendar year. With a 1098-T, you may be eligible for an adjustment to income or tax credit.
Taxpayers use a Schedule A to report itemized deductions to the IRS. Examples of itemized deductions include charitable gifts and donations, mortgage interest, business expenses, medical bills and so on. Once you list all of your itemized deductions, you can calculate your total itemized deductions amount, which is subtracted from your adjusted gross income (AGI) to determine your total taxable income.
If you are self-employed or act as a sole proprietor business owner, a Schedule C reports income profit or loss for the year. According to the IRS, any activity qualifies as a business if your primary purpose in engaging in the activity was to earn income and you were involved in said activity with continuity and regularity.
Tax preparation software is often an affordable option for taxpayers to file their state and federal income tax returns. However, if your tax return is complex, as is the case for self-employed individuals, business owners, investors, couples filing jointly or those with dependents, you may have to pay for a premium service. We evaluated the types of features included in different pricing plans and selected companies that are IRS-approved, service most states, support most tax situations and offer a maximum refund and accuracy guarantee.
We reviewed companies that offer free navigational tools that can help inexperienced individuals file their tax returns on their own. We included companies that offer free services for military members and free filing for federal and state returns, as well as some affordable paid options for taxpayers who prefer one-on-one customer service.
Tax preparation software programs are designed to simplify the tax return filing process, especially for inexperienced individuals. We evaluated companies that offer fair pricing options and product features that support basic to complex tax situations. Whether you prefer a DIY approach or feel more comfortable working with a tax professional via live chat or video conference, our list of the best tax software includes an option for you.
Some companies offer budget-friendly plans, but lack support for filers that need more hand-holding. Conversely, there are other software options with a higher price tag that offer audit support or on-demand customer support from a tax professional.
Our selection of the best tax software includes a variety of optional customer support features including expert help in-person or online. These services are either free or paid, depending on the tax situation. Common customer support features include live chat, email, tax term glossaries and phone support.
What is the best tax software?
There is no one-size-fits-all best tax preparation software. The best tax program for you will depend on your budget, the complexity of your tax return and the product features you’re seeking. For example, a college student may not need the same type of tax software as a married couple filing together with dependents.
Before settling on a tax preparation software provider, look into the tax forms it supports, whether or not the service offers one-on-one professional tax support or technical support and if the programs are available in your state.
Which free tax software is best?
CreditKarma Tax is one of the best free tax software programs for filing federal and state returns at no cost. Unfortunately, it doesn’t support all tax forms. Similarly, other companies like TurboTax, H&R Block and TaxSlayer offer free tiers for basic federal tax returns only.
If you’re a military member, several online tax software providers offer free filing for federal returns regardless of the complexity of your return. The IRS also has an online free file program that allows you to file your income tax returns through a partner site. However, most tax preparation software programs will require you to pay for state returns.
Were there tax changes in 2021?
The standard deduction for 2020 is $12,400 for single filers, up $300 from 2019, and for married couples filing jointly, the standard deduction rose to $$24,800, up by $400. For heads of household, the standard deduction is $18,650 — an increase of $200.
But perhaps the biggest changes for the 2021 tax season have to do with the ongoing pandemic. Thanks to the Coronavirus Aid, Relief and Economic Security Act, you can deduct charitable donations up to $300 even if you don’t itemize. If you do itemize, you may want to take advantage of the IRS’s decision to suspend limits on the percentage of charitable contributions taxpayers can deduct.
The CARES Act also gave retirees a reprieve from the required minimum distribution for 2020.
For the 2021 tax year, taxes will also accommodate people who didn’t receive the full stimulus check amount they’re owed. If you never received an Economic Impact Payment or believe the amount was wrong, you can claim the Recovery Rebate Credit.
How soon can I pay my taxes?
The IRS announced that it began accepting and processing tax returns for the 2020 tax year on Feb. 12.
Here are a couple of good reasons why it pays to file your taxes sooner rather than later:
- You can get that money faster if you’re anticipating a refund
- If you forget to file your taxes by the deadline (that’s usually April 15), any back taxes owed are still due on that date, in addition to late filing fees.
- You can avoid scams. The IRS warns about scammers stealing Social Security numbers to make off with people’s refunds. If you’ve already claimed your refund, a thief is going to be out of luck.
What day are taxes due in 2022?
You need to have your 2021 tax paperwork filed by April 15, 2022.
This is a departure from last year, when the IRS pushed back the tax filing deadline to July 15 due to the coronavirus crisis.