By Mark Smirniotis and Kevin Purdy
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We tried five online tax-preparation services and prepared returns for three fictional filers with a variety of incomes, living situations, states, and deductions. With over 80 hours of research and testing over the past five years, we continue to recommend TurboTax as the best tax software for anyone who needs guidance and a confidence boost to file their 2017 taxes on their own.
Who this is for
"'Tis impossible to be sure of any thing but Death and Taxes." If you earned income last year, you probably need to file a tax return. A majority of people in all age groups have concerns about filing their taxes, and the US tax code runs for more pages than War and Peace, so tax software has a big job to do for most people.
The simpler your finances, the simpler the forms will be (PDF), and the cheaper the software will be, too. In fact, if your taxes are simple enough to use the shortened 1040EZ return, you can file with either of our picks for free. If you have a slightly more robust financial life, you can still use tax software without much trouble, but expect to pay between $50 and $100. If you run your own business or own considerable income-generating assets, you may want to consider hiring a CPA instead.
How we picked and tested
We used five of the top online tax software platforms to prepare multiple returns for a handful of fake people, each with varying complexities that covered a variety of financial situations. Under the hood, every company is using the same IRS forms, tables, and rules to calculate your refund. But we identified a handful of key areas that would help us differentiate one service from another:
- Accurate and effective guidance that identifies common and uncommon circumstances in your financial life
- Clear, accessible language
- Variety of supported forms, deductions, and situations
- User-friendly interface and design
- Customer service and support
- Extra features such as smartphone-friendly websites, the ability to read a picture of a form like a W2, or integration with banks and investment houses
- Free from obnoxious upcharges for basic features and deceptive sales tactics of unnecessary features
Along the way, we compared how long our fake returns took to prepare, the refund or tax due for each return, the number of upsell pop-ups we were forced to ignore, and the final price to file each return. Most of these stats don't vary considerably—no tax suite knows something the others don't. But when refunds or tax bills vary, it points to a problem. We also looked at helper tools and the software interface, and took notes on the experience as a whole.
Our pick: TurboTax
TurboTax makes the process of entering your tax data easier than anything else we tested. Simple returns have fewer unnecessary screens to click through, and complex returns are broken down into more manageable chunks. For the fifth year running, we found TurboTax to be better than its competitors when it came to asking the right questions in clear language, accurately covering complicated situations, importing your forms and data, and offering a clean and user-friendly design. Its support is responsive and helpful, even for users of the free tier. Its mobile app, though not necessary, is useful for uploading forms and capturing deductions year-round. All told, we think the benefits of TurboTax are well worth the slightly higher price, though we loathe parent-company Intuit's tendency to nickel-and-dime customer's with upsell features—most of which are unnecessary.
TurboTax has the cleanest, easiest to use workflow, which first identifies which situations apply to you, then provides a list of the records and forms it expects you'll need. This makes it easy to review your progress and keep going if you need to take a break. TurboTax also makes data entry easier thanks to a long list of payroll processors, nonprofits and charities, and banks from which it can automatically import your employer information, charitable donations, and interest or dividend information.
Its biggest drawback isn't the software itself, but Intuit's presentation of upgrade opportunities—and, more broadly, in some of the business practices the company has engaged in since it started selling accounting software in 1983. TurboTax's brand-name domination of the tax-return category has led Intuit to make some not-so-customer-friendly moves, including lobbying against the simplification of tax laws. The company never misses an opportunity to upsell, and even after five years of reviewing tax software, its sales style irks us.
For simple taxes or experienced filers: TaxAct
We're reluctant to make a second pick for tax software at all, because all the alternatives we considered had some glaring flaws. But if you've filed your own taxes before, know the tax forms well, or are trying to dodge some of the fees Intuit charges for TurboTax, you should use TaxAct. If you know from experience exactly what you're looking to turn in to the government, TaxAct's straightforward presentation may be faster than TurboTax's interview-style interface, but it's not as easy for novices to follow.
TaxAct's strengths are nearly the opposite of TurboTax's. Instead of high fees and upsells to added services, TaxAct includes more features at a lower cost. Whereas TurboTax has friendly interview questions, TaxAct shines by providing detailed, meaty explanations of almost every topic you click on. If TurboTax is a friendly paperback novel, TaxAct is a technical manual. The process is straightforward, but it never feels as customized to your life as TurboTax. Plan on going through TaxAct's list of forms and questions and choosing what to complete, not having the list tailored to you.
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