You might have heard that the US passed a mammoth tax-reform bill in 2017, called the Tax Cuts and Jobs Act (let's call it TCJA from here on out). If you think your taxes every year is a lot of fun, you'll be delighted to know the changes all kinds of modifications of the rules and 400 or more new or revised forms to complete.
Fear not, though, because there are a multitude of tax software vendors here to help. These services, either through downloadable software, a web form or, increasingly, a smartphone app, turn the matter of taxes into a less painful question-and-answer dialogue. And if you think there's something like free tax software, think again. Many of these services offer free versions for the simplest forms (e.g. 1
Picking the right tax preparation software can be almost as complicated as estimating what you are the government. There is a plethora of features, with nuances, and much of what they offer is either not spelled out by vendors or buried in fine print. The following guide will ease the process, with descriptions of the more prominent offerings, their features and prices, and a guide to how to use them. We will start with the top services available, and then go to greater depth about the new laws, and how the services differ.
Oh, and for the ongoing US government shutdown: Its impact on tax preparation and refunds is still unclear, but we'll update this story when we learn more. on this page.
Turbo Tax by Intuit: CD, online, mobile. Listed prices range from a free base for basic returns to $ 40 for the downloadable Basic edition to $ 90 for Self-employed. All packages tack on extra charges of $ 50 to $ 70 to add the Live CPA feature, and $ 50 for Max. State filings are $ 20 each for the online versions, and free with the Deluxe, Premium or Home & Business download editions. It generally offers the most comprehensive set of tools. A nice feature is charitable donation tracking, whereby you can use the software year-round to keep track of donations and have the program compute your deductions at tax hour.
Visit Intuit Turbo Tax
TaxAct Online : CD, online, mobile. Listed prices range from $ 10 for the Basic online Version to $ 97 for the self-employed download / CD package. State filings are $ 20 to $ 37 depending on the package. It promises $ 100,000 of coverage if you find a higher refund somewhere else, and $ 100,000 to cover audit costs if its software causes an audit One useful extra is a log or all the times your online paperwork has been accessed, including the IP address of the computer that has access, in case you want to make sure one has been in your account.
Visit Tax Act
H&R Block: CD, online, mobile. Listed prices range from $ 19 for the Bas ic download to $ 80 for the online Self-employed package. State filings are $ 30 to $ 40 depending on the package. Smartphone app offered. Tax Pro Review promises extra hand-holding from the company's network of CPAs.
Visit H&R Block
Tax Slayer: Online or mobile. Listed prices range from $ 24 for Classic to $ 47 for Self-employed. $ 29 extra each Support offerings include Ask and Tax pro, via phone or email Premium and Self-employed packages offer to the front of the support queue, at least relative to the Classic version. right now.
Visit Tax Slayer
Free Tax USA: Online only. One of the cheapest offerings, with the only pay version being Deluxe, at $ 7 (no downloads offered). State filings are $ 13 extra. Support includes online chat between 9 a.m. and 9 p.m. ET, Monday through Friday, but only for the Deluxe version, not for the free offering. Similar to Tax Slayer, a priority feature puts you in front of the support queue relative to users of the free version. A bonus is the ability to file "unlimited modified returns" at "no extra cost." You can get started with the program right now.
Visit Free Tax USA
Liberty Tax / eSmart Tax: Listed prices range from $ 20 for EZ to $ 75 for premium (no downloads offered) eTax pricing is slightly cheaper, while functionality appears to be comparable It has a limited-function smartphone app, which is just a directory of Liberty Tax offices around the country. am to 5 pm ET, and a network of CPA offices throughout the country. Promises "360-degree support" and "multichannel support." Visit Liberty Tax
Cre this Karma: Online or mobile. The only vendor that offers no paid versions – even state filings are free. The tax product is part of the larger Credit Karma collection of services, including credit cards, loans and auto loans, off of which the company makes a fee for referrals. It has the most offer of guarantees: no audit or penalties insurance, and if you get a higher refund from another vendor, the most it will offer is a $ 25 gift certificate.
Visit Credit Karma
Jackson Hewitt: Online only. The $ 30 package, which adds $ 37 each state filing, has a nationwide network of CPAs, though "separate charges apply" for such visits. if you find a better refund, and if you have a refund of any fees incurred if you are not filing with the program.
Visit Jackson Hewitt
Free104 0TaxReturn : Online only. Listed prices include $ 30 for each federal or state e-filing, $ 7 for print-only preparations. Support includes a 24/7 help desk by phone or email. It offers federal and state audit insurance for an additional $ 30 and $ 20, respectively. Visit Free 1040 Tax Returns
Happy Tax Service : Online or mobile. The package includes up to $ 500 for Premium, all versions include one free state filing, it has a franchise network of CPAs and EAs billed as a "concierge service." person to complete forms, then a CPA prepares your paperwork and delivers the finished product in 2 hours, on average. It has an extensive selection of packages for cryptocurrency tax filings.
Visit Happy Tax Service
Understanding the Tax Act  Assuming you decide to go through the online process to ease the pain, you should be aware of some of the basics of the TCJA that may affect you. The IRS has provided a handy document (PDF) explaining these items, as well as checking your individual state tax website.
The most obvious changes are new tax rates and new amounts for the standard deduction.
The new rates are 10, 12, 22, 24, 32, 35 and 37 percent.
The new deductions are $ 12,000 for single filers or those who are married but filing separately, up from $ 6,350 last year; $ 24,000 for those filing jointly, up from $ 12,700; and $ 18,000 for a head of household, up from $ 9,350.
If you are itemizing taxes, rather than taking the standard deduction, those change as well. The good news is you may be able to deduct more than in past years if you're in a higher income bracket. The bar has been set lower for deducting some unreimbursed medical expenses as well. Rules for deductions of mortgages and home equity interest also change. The credit for a qualifying child goes up this year, and there is a new credit that can be claimed for other dependents.
The new tax forms won't appear until the end of December or early January. Believe it or not, some changes to the forms are supposed to make things easier. For example, the IRS has been working on a new version of the core 1040 which is half the size of the old form, and also forms 1040A and 1040EZ.
If you want a sneak peek, a draft version was posted on the summer on the IRS website (PDF). A plethora of other draft releases are available on the site.
One matter you may want to get started on right away is withholding. Rules for employer withholding have changed and the IRS advised that you review how much is being with your paycheck, to avoid a large bill at tax time if the amount is too low. There's an online calculator at the IRS website, as part of a "Check Check" that breaks down the TCJA changes for you.
Tax software offerings
There are a few basic distinguishing factors for all the services: pricing, level of "live" or human assistance, and insurance or guarantees.
The programs are evolving from an era of software on CD-ROM (for those of you who remember what that is) to the web and smartphone apps. Three providers – Intuit's TurboTax, TaxAct Online and H&R Block – still offer software that can either be downloaded and installed locally on your Mac or PC, or even sent to you on CD.
Want to file taxes on your iPhone ($ 1,000 at Amazon Marketplace) ? Apple's fully featured mobile apps iOS or for Android-based smartphones that will let you file taxes from the palm of your hand: Intuit, TaxAct, H&R, Tax Slayer, Credit Karma and Happy Tax Service .
The new trend is hands-on support. Intuit's TurboTax is for the first time including a free conversation with a certified public accountant, or CPA, when you are in the process of filling out forms on the TurboTax website, as opposed to the download, known as TurboTax Live. When you create your account on the Turbo Tax site, and start to fill in information about your finances, a button appears in the upper right hand corner saying Live Tax Advice. Clicking on that brings up a one-way video window – you see the tax expert, they don't see you. Screen-sharing technology lets the CPA look at the statements with you in real time.
H&R Block, which has a network of offices throughout the US, offers to have your "work checked" for you, called the Tax Pro Review, starting with 2019's filing.
Tax Slayer offers to connect you via either chat or telephone to "on-staff IRS-enrolled agents."
And Free Tax USA offers online chat with a "tax specialist" between the hours of 9 a.m. and 9 p.m. ET.
Liberty Tax and Jackson are two other firms that, like H&R, have actual physical offices around the country, though it's not immediately clear what that will get you. Liberty promises "360-degree, multichannel" support, without specifying what that means in practice. Jackson Hewitt notes that "separate charges may apply" for visiting its walk-in offices, without specifying any amounts.
Live help is of course, for the most part, a feature of paid offerings, and there are various features that the vendors use to move you from the free offering. Which kind of files you are – single, head of households, but filing separately and so on – obviously starts to move you into packages that can handle more complicated returns.
Other benefits of using a paid version include after filing them.
Guarantees and the fine print
The other big lures for paying are the so-called guarantees. This can be where the fine print becomes especially tricky.
Every one of the 11 providers listed here offers some kind of assurance of accuracy. The most common form is to guarantee that if you have a tax software, you will be able to pay a higher refund. TaxAct Online offers also the difference between what you found and what another program found for you, up to the amount of $ 100,000. Obviously, this means that you will be using more than one of these programs to file, which is probably not the case for most people, which is why such a promise seems to be a low-risk proposition for the vendors.
Another guarantee is to reimburse you for any penalties incurred by filing with the vendor. TurboTax states flatly it will "incur the penalty and interest" incurred. Another is audit support, but what that means varies. TurboTax says if it is filed with it is audited, it'll refund the software fees, but it won't be involved with your audit. TaxAct will refund audit costs up to $ 100,000.
TurboTax also offers a separate package, called Max Defend & Restore, which is provided through a partnership with a firm called TaxAudit.com. The Max plan, which is a $ 45 add-on, promises to have a tax expert you should be "randomly audited," and promises a $ 250,000 insurance policy against identity theft.
Free Tax USA will help you from an "audit specialist" if you use its Deluxe edition, rather than free, but will not pay for any of your costs. Free1040, which sells federal and state audit insurance, for $ 30 and $ 20, respectively. These are billed as "insurance to cover the cost of yourself," and the service promises its CPAs and EAs, meaning "enrolled agents," people who have passed the test from the IRS or served at the IRS, will "act the entire process "so you" have not seen the IRS. "
Pricing depends on many factors
The prices for all these packages range from completely free, with Credit Karma, which has charge for any offering, up to several hundred dollars for Happy Tax, a firm that is really a network of CPAs and EAs. In all cases, you don't pay anything for the service up front, you pay when you file. And most of the vendors let you pay for the service with the fee deducted from a refund, if you're due one. Prices for the download or CD-based versions are generally higher than for online. The smartphone apps are free to download to your mobile, and the ultimate price is in line with the online price of whatever package you choose.
The question of pricing is more complex than it initially appears, however, because the prices for many of the offerings are not fixed at this point in time. What's listed on the websites of the vendors are often prices based on last year's software. Intuit, makers or TurboTax, for example, told me that prices for TurboTax will pay to file in April of next year are "subject to change," and that is listed on the website is the cost of last year's return. "Prices are based on when you actually file," says Intuit.
Similarly, H&R Block said that "prices have changed times in late March / early April."
The direction of pricing will likely be up, not down. Liberty Tax, for example, lets you start the online process, and then midway through, you can click on the button to proceed to the next step and "lock in your rate." But you are so, you're presented with a menu that is actually higher than what's listed on the home page. For example, the EZ version, listed for $ 12 on the home page, is listed in the wizard as $ 20. Liberty says it hasn't updated its home page for the new prices.
All these services will let you get started with a free version. Even Liberty Tax, which does not exist, you can get started in information before deciding on a product.
If you start with a free version, you'll find there are frequent inducements to upgrade to the paid versions, or, if you started by choosing a paid version, to upgrade to higher packages. For example, if you recently changed your work status from self-employed to freelance, you may be prompted to upgrade to a package that will help you itemize all the new expenses you pay for your own boss, such as your monthly internet bill or supplies costs.
Given the shifting nature of prices at this point in time, you have an intriguing opportunity: start your return with multiple vendors, try them out and dump the ones you don't like before you file.
Bear in mind that almost all the services require an additional fee to file state returns, and an additional fee for each additional federal filing on top of the initial one. There is a whole set of fees if you wish to go back and do your federal or state taxes from prior year.
One emerging feature of the services, supported by only a couple, is special treatment or cryptocurrencies such as Bitcoin and Ethereum. TurboTax offers to "accurately account for gains and losses from cryptocurrency transactions" as a unique feature of its $ 140 Deluxe package. And Happy Tax has a whole slate of offerings that vary in price by the number of transactions you are accounting for. The Happy Tax packages are quite expensive, however, ranging from $ 600 on up to $ 3,500, billed on a yearly basis.
Regardless of the features of each service, some people find it easier to come back to a vendor they've used before. If you are a prior-year customer of TurboTax, for example, as soon as you choose a package this time around, the software tells you it's going to import last year's return automatically, which can save you some time having to bring together the prior-year filing. That's important for a variety of reasons. If just one example, if you received any refunds for the prior year, it has to be determined whether they are taxable or not.
Remember that if you are making more modest income, the IRS offers help for electronic filing. One option is a team of volunteer tax preparers who will help people making $ 54,000 or less, called VITA and TCE. More about that on the IRS site here.
The other is Free File, an initiative started in 2003 for those making $ 66,000 or less annually. Vendors on this list include Intuit TurboTax, H&R Block and TaxAct.
Though many people will delay filing until the very last minute, some of the services will allow you to get started today, for no money up front, even before the new forms are available, and before you receive many of the documents you need, such as a W2. A benefit of this approach is that it's possible to try the initial stages of all the online versions before you commit to a purchase, and get a feel for how well the user interface suits your needs.
The process in all cases begins by entering an email address, choosing a user ID and coming up with a password. You may find yourself having to keep track of multiple passwords, given that creating a password is one of the first stages. For that reason, you'll either want to keep a notepad handy to write down your passwords, or else turn to the ability of your browser to save passwords for websites. (.)
The system will usually send a confirmation code via text message to a mobile phone that you enter. (In the case of Liberty Tax, email is used instead.) You want to keep your phone handy so you can enter the code to continue.
You can walk away from the return, and come back at a later time, log in with the ID and password you created, and pick it up again, and the work you've done will be saved. In some cases, when you return to the site, after you log in, you'll again be sent a one-time code, via email or SMS, that you'll have to enter into the site to resume working.
You'll be asked in all cases to choose and answer three security questions, for which you'll also want to keep notes.
In the case of Credit Karma, you will also be asked to enter the last four digits of your social security number, and then confirm some background data on yourself, such as whether you had a mortgage loan outstanding. These are presented to verify your identity, the company says.
If you are filing with the provider for the first time, expect to enter information about filing status, and whether you have any dependents or can be claimed by anyone as a dependent.
If you're starting fresh with one of the services, you'll be prompted early on to import your prior year filing, usually in the form of a PDF file, by uploading it through the browser. Of course, W-2 forms aren't required to be delivered to employees until the end of January, and additional tax documents (for stocks, 401Ks and so forth) often don't arrive until the middle of February. But whether you're ready to start or not, it's good to start gathering the documents you need, to try out the look and feel of the offerings, and to start to reflect on just how complex your return may be this year.  Originally published Dec. 13, 2018.
Update, Jan. 21: Added note about how government shutdown may affect tax preparations.
Update, Jan. 14 : Slightly updated to reflect changes in software and service availability and pricing.