With so many software programs available, you may be wondering which one gives you the best refund. Well…none of them. With these programs you either owe money, or you don't. The difference is in their price and how easy they are to use.
More than half of Americans, myself included, lack the confidence or skills to file taxes on their own.
And if your return is complicated, the chances of making a mistake are even higher, which means you can get you into quite a bit of trouble.
“I've had two or three clients over the past years that have used Turbo Tax, checked the wrong boxes, missed something or didn't add something, and they were criminal cases and they were prosecuted. So you really have to be careful,” said Tax Attorney Robert Fedor.
But if your tax situation is simple, you worked and got a W2, have minimal investments or deductions, a 1040 EZ may be easy breezy with one of the tax programs out there.
Turbo Tax
Turbo Tax seems to be the favorite among do it yourselfers...simply because it's the closest you can get to hiring a real life preparer.
-It has easy prompts and questions that make mistakes less likely.
-You can text with an expert if you have questions
-And it's very easy to navigate through the filing process.
The downsides:
-It's pricey. Even with the free version you'll pay $30 if you want to file a State return.
-Their Premium version costs $80 plus another $40 to file a State return.
-And users say they're constantly interrupted with upsells for things like investment help and expert support if you get audited.
Tax Act
Tax Act offers many of the same features as Turbo Tax.... but for free.
-In fact their free version is just that…completely free.
-And their Plus version is 43 dollars less than the comparable version of Turbo Tax.
-Email and Phone support are free.
-So is their Doc Vault app, which stores and organizes important documents.
The downsides:
-It's not the easiest program to use if you have a complex tax situation.
-The questions and prompts are not as detailed as with Turbo Tax and H&R block, which could lead to mistakes or missed deductions.
-And because of that it takes more time to complete.
H&R Block
The last big player is H&R Block, which is very similar to Turbo Tax, but which offers real life tax preparers if there is problem.
The pros:
-You can try before you buy. Unlike the other software, you don't need to register just to see if you like it.
-It's the only software whose free version lets you to itemize deductions.
-And it offers in person audit help.
The downsides:
-Like Turbo Tax, it's expensive, although less so. With its most expensive software $20 less than Turbo Tax's.
-But it's Premium version costs $80 dollars, plus another $40 to file State returns.
-And it's not as easy to navigate. The questions are sometimes harder to understand than with Turbo Tax, which again could lead to mistakes or missed deductions.
One of the things you really need to be careful about with all of these programs, is dealing with your municipal taxes like RITA or CCA. Make sure the software supports the city you live in. If not, you're going to have to file those separately. And don't ignore them, because they will find you. Below are links to several software programs, as well as to ones that will let you file free depending on your income: