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What’s the Best Tax Software in 2021?



If you dread sitting in a CPA’s office going through your tax situation line by line, you’re likely one of the millions of Americans who turn to tax software to prepare your return. Tax software makes it easy to file your tax return and get help from a professional, all without needing to leave your house.

There are many different online options to choose from, and they all offer something a little different. From entirely free tax filing to connecting with a pro straight from your phone, there’s something for everyone and every situation.

With so many options, which should you choose? In comparing different products, we looked at three main factors: prices, features, and access to support. Some options are free but lack access to in-depth support that people with more complicated taxes will need. Other options come with a fee, but they give you support and professional filing that can make the difference in getting your taxes done right.

We’ve reviewed 11 different tax software options to help you pick the perfect one for you:

1. Taxfyle

When you’re looking to do your taxes, you generally have two options: head for the DIY route or hand all of your information over to a CPA or other tax professional.

Or, you can opt for an alternative approach with Taxfyle.

When you use DIY software, you are mostly on your own. You’ll answer some easy questions going through an interview, but if you need additional help, your options might be limited. Some tax software doesn’t have the option to work with a professional, and others will charge an additional fee for this service.

With Taxfyle, you get the ease of simple software and the knowledge of a professional, combined. The process is simple:

  1. Download the Taxfyle app
  2. Answer a few questions
  3. Get a price quote
  4. Get matched with a professional
  5. Upload your important documents

The pro will take it from there and you’ll have a completed tax return ready to sign. Unlike other services that offer pro support, all Taxfyle professionals are either CPAs or Enrolled Agents (EAs). So you know you’re getting someone who is fully qualified to handle your specific situation.

Pricing for Taxfyle is higher than some DIY software options but offers significant value for the professional services received. Pricing is based on the complexity of your tax return and starts at $59.99.

What’s also unique about Taxfyle is they can help nearly everyone. Not only do they offer personal tax filings for individuals, but they also prepare taxes for small businesses, as well as expats. No matter how complex your tax situation, Taxfyle can help. These extras are services you won’t find with the other options on this list.

For extra peace of mind, Taxfyle offers audit protection. Instead of a guide to help you through the audit process (which some other competitors offer), Taxfyle matches you with a professional to provide IRS or state representation.

Thanks to Taxfyle’s app, you can have a professional file your taxes just by uploading docs and answering a few questions on your phone. Taxfyle makes getting your taxes done professionally easy and affordable.  

2. TurboTax

TurboTax by Intuit has a range of options that cater to just about any need. They offer four service options at different price points to meet your needs:

  1. Free edition: For filers with a basic tax situation. Will cover W-2 income, unemployment income, the Earned Income Tax Credit, and childcare tax credit
  2. Deluxe: Made for homeowners or other tax filers who want to itemize their deductions.
  3. Premiere: Designed for people with investments or rental properties
  4. Self-Employed: For anyone who is self-employed and needs to file a Schedule C (this includes independent contractors and anyone who receives a 1099-NEC)

But that’s not all. You can upgrade for additional support with two different options. The first, TurboTax live, offers expert advice as you’re doing your taxes. You’re able to video chat with an expert who can walk through your tax return with you, line by line. This option adds on an additional $60 - $200, depending on which of the four software options you choose (basic, deluxe, premiere, or self-employed).

If you want additional help, TurboTax full service lets you turn your tax preparation over to a professional. You’ll upload your tax forms, and a CPA or other tax expert will prepare your tax return. Before filing, you’ll have a chance to walk through your return with the expert to make sure everything is correct. This service is $140 - $300.

And if you find yourself facing an audit, TurboTax Audit Defense provides representation with IRS and state agencies to help you navigate the process.

While TurboTax does offer a thorough product, it’s one of the most expensive DIY tax options available.

3. H&R Block

H&R Block offers the option to file either online or in-person, making life easier for someone who is a little less tech-savvy or wants the comfort of meeting their tax professional face-to-face. Like TurboTax, they offer four levels of service for their online product:

  1. Free: The free option offers online filing but won’t work for people who have a health savings account or need to itemize their deductions.
  2. Deluxe: The Deluxe option offers more functionality, like itemizing deductions that include real estate taxes and home mortgage. Plus, access to live support over the phone or chat.
  3. Premium: This level pulls out all the bells and whistles, aside from the ability to file required self-employment forms. People with investment and rental properties will find the tools they need at this level.
  4. Self-Employed: This is designed for anyone self-employed to help deal with the sometimes complex business situations that come up. They offer easy expense tracking all year long (for example, for mileage).

If at any of these levels you need more help, you can pay for their Premium Online Assist. This service allows unlimited screen sharing, video, and chat help, from a tax expert. One thing to note here is that their tax expert won’t necessarily be a CPA or an Enrolled Agent.

As far as audit help, H&R Block offers Worry-Free audit support, which you can purchase. With this service, you get detailed advice for how to prepare for an audit, and you’ll also have an enrolled agent represent you for in-person audits.

H&R Block also offers a Refund Advance loan of up to $3,500 for filers who want early access to their refund.

Prices for online filing range from $0 - $109.99 for Federal Tax Filing. State Tax Filing is an additional $0 - $36.99 per state. And Premium Online Assist can be added to any service offering, but the price also varies. You’ll pay $34.99 - $194.99 for this additional service, depending on which online filing option you choose.

4. TaxAct

Taxpayers looking to stretch their dollar might turn to TaxAct, whose prices are significantly less than those of their major competitors. They also have four tiers to choose from when it comes to filing returns.

  1. Free: The most simple filing option works for people with dependents, college expenses, unemployment income, and retirement income.
  2. Deluxe: The deluxe version adds on some basic upgrades, like allowing you to deduct mortgage interest expense, student loan expenses, and any childcare tax credits.
  3. Premium: Premium will work for most filers who aren’t self-employed. That includes real estate investors who need to file Schedules D & E for the investment properties.
  4. Self-Employed: The most expensive and thorough version is for self-employed people. Here TaxAct provides you with help to maximize business deductions and file your Schedule C.

If you need additional assistance, TaxAct offers Xpert help — online tax assistance with a CPA, EA,  or other tax expert during certain hours. TaxAct doesn’t offer a full-service option, so if you want to outsource your tax preparation, you’ll need to turn elsewhere.

If you want audit support, you’ll need to purchase Protection Plus, which offers both audit support services and identity theft restoration services. With Protection Plus, a tax professional will work directly with the IRS or state auditor on your behalf.

Prices for online filing range from $0 - $79.95 for Federal tax filing. State tax filing is an additional $19.95 - $44.95 per state. Filing with Xpert help costs from $35 - $159.95 for federal tax returns and $19.95 - $44.95 per state.

5. Taxslayer

Taxslayer takes a unique approach to pricing. While some companies charge based on the software capabilities (for example, needing to itemize deductions). Instead, Taxslayer distinguishes between pricing based on the level of support you need.

For example, their Classic option allows tax filers access to all forms and unlimited phone and email support. But for $20 more for a federal tax return, tax filers get more assistance with priority phone and email support plus access to a tax pro to answer all of their important filing questions.

  1. Simply free: Free tax filing for users who meet certain criteria. Specifically, no dependents, no itemizing deductions, and less than $100,000 in taxable income.
  2. Classic: This option covers all tax filing situations as well as offers phone and email support from tax professionals.
  3. Premium: The same software as the classic version, but this option allows you to skip the line and get phone or email support faster than with the classic version.
  4. Self-Employed: Best for contractors and self-employed people, this version gives additional support by providing access to tax pros that offer specialized advice for self-employed people.

While TaxSlayer does offer a free version, it won’t work for everyone. Filers aren’t able to itemize tax deductions, they must make less than $100,000, and can’t claim any dependents, among other restrictions.

Audit assistance is available to filers who pay for the Premium service. With audit assistance, a professional works with you to respond to any inquiries from the IRS.

The paid Classic version starts at $17 for a federal tax filing and $32 per state filing.

6. Jackson Hewitt Online

As an addition to their in-person tax services, many of which are located in Walmart store locations, Jackson Hewitt offers an online version for people who want a DIY option for tax filing. Most online tax software programs offer a free option, but Jackson Hewitt Online cuts out the free filing option. They offer a pricing option of $49 for federal and state return filing or $25 for federal return filing only. This makes it simple for all types of filers to take advantage of the low price, but there are some drawbacks to this online service.

If a filer needs help answering questions, there’s no option to speak with a tax professional. While they do offer customer support, if someone needs professional assistance, they’ll need to switch to their option to file with a tax pro.

If you’re looking for a service that also includes audit support assistance, you’ll want to look elsewhere. If a filer does get audited, IRS audit assistance isn’t included with the online filing purchase.

7. Credit Karma Tax

While you may be most familiar with Credit Karma for their credit monitoring, they also offer services to help you file your taxes. And just like their credit monitoring service, they offer this completely for free. Credit Karma makes their money through affiliate commissions — if you get a loan or a credit card through them they’ll receive a commission. Because of this model, that keeps their other services, like tax preparation, completely free.

Because there is no paid version of Credit Karma, they offer just one tier of service. This means that people who need a little extra help getting things done won’t be able to pay for more support. But their free service is more robust than what other tax preparation software offer at their free tier. With Credit Karma, you can file if you have income from a rental property or if you earn income as a self-employed person. And yes, it’s still all completely free.

They also allow you to itemize deductions (Schedule A), report business income and losses (Schedule C), and support different 1099 forms, like the 1099-G, which you’ll have if you filed for unemployment benefits.

And adding onto their free service, Credit Karma does allow both state and federal income tax filing, completely free. Unfortunately, Credit Karma is able to file your state tax return in just 36 states. If you live in a state they don’t currently support, you’ll be out of luck. See what states they support here.

Even though Credit Karma offers completely free tax preparation, they still don’t skimp on the extra Audit Defense protection. The service is available for free for people who file through Credit Karma Tax.

If your tax situation is fairly basic and you don’t need a lot of help answering questions, Credit Karma offers a solution that may work well for you.

8. FreeTax USA

FreeTax USA lives up to its name — it really offers free tax return filing. And the free isn’t limited to basic filing situations and doesn’t come with a taxable income cap like other competitor’s options. Most of the major tax forms are supported in the free version. And unlike almost all other competitors, self-employed people can still file their taxes using the free version.

But there are situations where you’ll need to pay. State filing is $12.95 per state and if you want priority support or audit assistance, you’ll need to pay $6.99 for the deluxe option. If you think you’ll need to make a number of changes, their unlimited amended return option is $14.99.

The audit assistance offered with the deluxe edition doesn’t pair you with a pro or offer 1:1 support. It provides you with step-by-step instructions for handling audit requests and notices.

If you’re looking for help from a tax professional (paid or unpaid), FreeTax will fall short. While they do provide help from specialists with the deluxe version, it’s more limited than what you’ll find with other tax software. Though, for the price, people with simple tax situations might not miss additional expert guidance.

9. Liberty Tax

Liberty Tax offers both in-person and online tax filing, similar to some of their competitors like H&R Block and Jackson Hewitt. But Liberty Tax doesn’t offer a free version, even for the most simple of tax returns. Their pricing starts at $44.95 for a state return and $35.95 for each state tax return. That’s a higher starting price point than you’ll see with many other online software options.

They offer three tax preparation options: basic, deluxe, and premium. The basic option covers the most simple tax situations. Deluxe covers more situations including owning a home, but not investment properties. The self-employed option is the most comprehensive.

LibertyTax falls a little short with its help options. They do offer a help center and online chat with a specialist, but if you are looking for phone support or in-depth one-on-one help with tax topics, their online filing won’t be the best option for you.

10. E-file.com

E-file.com offers a free option for tax filers, but it likely won’t work for many people. The free option will only work if your income is solely from a W-2 job, if you don’t have dependents to claim, and if you don’t own a home. The free option also charges $21 to file a state return.

Even though E-file.com’s free version won’t work for many filers, E-file.com does provide a cheaper option for self-employed people. While most competitors have a separate tier for self-employed people (which is more expensive), E-file.com’s Premium Plus E-file will work for business owners. That’s significantly cheaper than what most of their competitors charge at the self-employed software tier.

E-file.com offers Protection Plus Audit Assistance that can be purchased during the filing of your taxes. With this service, they’ll evaluate and draft replies to IRS correspondence, review documents, and assist with phone calls with the IRS.

11. TaxHawk

TaxHawk is a sister-site to FreeTax USA. You’ll find a lot of similarities between these two sites. They both offer free filing for all of the federal tax offerings (simple, premium, and advanced). And they both make their money by charging for state filings and their deluxe edition, where you can get priority support and audit assistance for $6.99.

But TaxHawk has one major differentiator: assistance from a tax professional. TaxHawk offers professional support from a CPA or EA for $24.99. This is a major shortfall of FreeTax USA and a big benefit for TaxHawk. While a CPA or EA isn’t doing your taxes, if you have a specific question while you are working through the tax questionnaire, you can schedule a virtual meeting with a pro. Not only that, but you’ll be able to screen share with your professional to make things easy.

TaxHawk Pro Support also comes with Audit Assist with a professional. A professional will be available to answer your more difficult questions that come up during an audit.

While help from a professional isn’t free, it offers pro support at a price point that is cheaper than other competitors, like H&R Block.

Making a decision on your tax software can be overwhelming, especially with so many choices available. But weighing your options and taking into consideration what service provides the level of support you need while also meeting your budget can help. Making a smart choice here can give you peace of mind as you head through the tax preparation process.

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Tickmark, Inc. and its affiliates do not provide legal, tax or accounting advice. The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations. All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice. You should consult your own legal, tax or accounting advisors before engaging in any transaction. The content on this website is provided “as is;” no representations are made that the content is error-free.

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February 1, 2021


Erica Gellerman, CPA


by this author

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