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Best tax software in 2020: manage and file federal and state taxes

Best tax software
(Image credit: Pexels)

The best tax software should make your life easier. Everyone knows the IRS (Internal Revenue Service) in the US is not to be messed with and the same applies for other territories. State and federal taxes must be filed in time, and they must be accurate.

However, managing tax can be a headache, especially if you're concerned about getting the figures exactly right and you've covered both state and federal boxes properly. 

Even more usefully, however, there are a number of tax software packages available to help you manage your tax returns. These aim to make completing returns simple and easy.

While some have a basic fee for basic filing, some can cover additional tax areas such as investments and real estate, and usually charge extra to cover these additions.

Even still, if the software makes life easier it's worth trying. Here then are the best in tax return software currently on the market.

Note: Tax Day 2020 has been postponed from April 15 to July 15 and you might also be eligible for a stimulus check via the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The current lockdown scenario also means you might be looking at filing online for the first time, instead of using a tax professional, making having the best tax software all the more important.

The best tax software at a glance

  1. H&R Block
  2. TurboTax
  3. FreeTaxUSA
  4. TaxAct
  5. TaxSlayer
  6. Jackson Hewitt Online
  7. Credit Karma Tax

H&R Block Taxcut

(Image credit: H&R Block)

1. H&R Block TaxCut

A robust feature set, but still affordable

Full featured  
Attractive interface  
Backed up by retail bricks and mortar outlets 
No free tier for basic returns 

H&R Block offers a hugely flexible array of package options, which allow you to file online or work with a professional who can do a lot of the work for you. This is broken down even further, with options tailored to just how much of the work you want to do yourself.

If you do your own taxes then get started with Online, which allows you to file easily and securely from either a computer or a smartphone. Choose Free Online if you have a W-2, have kids and education costs and there’s a $0 charge per state filed too.

Deluxe Online is for maximizing credits and deductions, plus HSA contributions and currently costs $37.49 instead of the usual $49.99, plus $44.99 per state filed. You can initially start for free.

Premium Online is aimed at freelancers, contractors and investors and is currently $52.49 instead of the usual $69.99 plus $44.99 per state filed and also allows you to start for free.

Self-employed Online, meanwhile, normally costs $104.99 and is currently $78.74, plus $44.99 per state filed. It's aimed at small business owners as well as the self-employed. That too allows you to start for free.

H&R Block’s Online Assist packages on the other hand, allow you to file online with on-demand help from a tax expert, enrolled agent or CPA. Basic Online Assist costs $49.99 plus $0 per state filed and suits if you have a W-2, kids and education costs.

Deluxe Online Assist is $99.99 plus $44.99 per state filed and is for maximizing credits and deductions, plus HAS contributions. You can start for free. Premium Online Assist is aimed at freelancers, contractors and investors and is $139.99 plus $44.99 per state filed. That too allows you to start for free. Self-employed Online Assist, finally, is just that with help when you need it and costs $169.99 plus $44.99 per state filed, with a start for free option available.

H&R Block offers more however, including tax offices and virtual filing. Its Drop-Off service lets you drop off your documents at your local tax office and starts from $69 plus additional fees per state. Tax Pro Go, meanwhile, lets you get expert tax preparation remotely, from $49 plus additional fees per state. There’s a Student/Retired option for $129 plus $45 per state filed, a Family/Investor package for $199 plus $45 per state filed and a Business Owner option for $249 plus $45 per state filed package too.

Their In Office option, meanwhile, lets you work together with a tax pro and starts from $69 plus additional fees per state.

Finally, H&R Block does have downloadable software options. These include its Basic Tax Software for $29.95, for simple tax situations, Deluxe and State Tax Software, for homeowners or investors at $54.95, Premium Tax Software for self-employed/1099-MISC or rental property owners for $74.95 along with Premium and Business Tax Software for small business owners with 10 plus itemized expenses for $89.95. Additional fees may also apply for these however.

Read our review of H&R Block here

TurboTax

(Image credit: Intuit)

2. TurboTax

The venerable master of tax return software

Been around for decades  
Free Federal tier  
Stores tax documents in the cloud 
Adding the State return is expensive 

Ask someone to name a program for tax prep, and chances are they will say TurboTax. That’s not by accident as this firm is an old pro in this area, having its origins in the mid-1980’s when TurboTax was first created by the software company Chipsoft (and is now under the Intuit umbrella).

The online offerings start with a free tier for Federal taxes, and the State adds a reasonable $29.95; this is fine for a 1040EZ or 1040A return, but not a full 1040. The full 1040 requires a step up to the Deluxe tier, which goes for $59.99, and the State return adds $39.99 to the package.  

TurboTax includes the 'ItsDeductible' feature, which can assist in calculating the value of donated items. It can also store your documents online for safekeeping if they are needed later, such as for an audit. 

Read our review of TurboTax here

FreeTaxUSA

(Image credit: FreeTaxUSA)

3. FreeTaxUSA

Free Federal tax software to bring a smile to a skinflint

File Federal taxes for free  
State tax filing affordable  
Guaranteed to be accurate 
Deluxe tier for priority support 

Getting your taxes done for free does sound like an attractive offer, and yes, the name of this product does indicate the truth. Federal taxes can indeed be done for free - for all returns including a full 1040, and even more complicated tax situations such as an Earned Income Credit, or a K-1. Adding a State return tacks on an affordable $14.95 fee.  

Compared to the competition, FreeTaxUSA does indeed represent the bargain here. There is a higher Deluxe tier offered, which adds Audit Assist, Priority Support and can handle amended returns, but true to the cheapskate origins, it's only an additional $6.99.

Read our review of FreeTaxUSA here

TaxAct

(Image credit: TaxAct)

4. TaxAct

The no-frills tax solution

Accuracy guarantee  
Five tiers to cover all situations 
Lacks email support  
State cost is higher than competition 

Sporting a simplified interface, TaxAct takes a no-frills approach to the chore of doing the taxes in the cloud, while undercutting the prices of the bigger players.

It even has the free W-2 jobholders edition (State included), which proves ideal if you’ve got fairly basic requirements. The free version also covers filers with dependents and if you have college expenses or retirement income to declare. 

A Deluxe+ package costs $54.95 (+ $54.95 per state filed) delivers everything in the free edition plus more besides. It’s ideally suited to homeowners plus those with deductions, credits and adjustments to file. 

The Premier+ model comes in at $79.95 (+ $54.95 per state filed), which includes everything in Deluxe+ with added features for investments, rental property and prioritized support. Top of the tree is the Self-Employed+ package, which for $109.95 (+ $54.95 per state filed) adds on Deduction Maximizer and year-round tax resources.

There are other options too, such as a business specific area of the TaxAct website. In here you’ll find a further four product options, all priced at $109.95 each plus $54.95 per state return. Options include Sole Proprietor covering Form 1040, Schedule C, or Partnership Form 1065, or C Corporation Form 1120 and finally S Corporation Form 1120 S.

Tax Act also does a nice line in bundle deals, where you can combine your individual and business tax software for $200. You can also select downloadable editions of its Basic, Deluxe, Premier and Self-Employed packages too, which cost $26.95, $96.90, $101.90 and $124.90 respectively.

Read our review of TaxAct here

TaxSlayer

(Image credit: TaxSlayer)

5. TaxSlayer

A bargain tax solution

Affordable costs  
Additional help for the self-employed  
Phone and online support included 
State return is an additional fee 

TaxSlayer positions itself as a bargain tax solution, offering prices that undercut the competition across multiple tiers.  

It delivers a solid selection of product options, with one to suit pretty much any kind of individual. If you’re starting out, have relatively simple tax affairs and are single, married and filing a joint return or a student then the similarly basic Simply Free option is a good one. It allows you to file for no outlay with $0 state included to pay. 

TaxSlayer’s stated ‘most popular’ package is the next one; Classic which is suited to all tax situations, can be started for free and costs $17 plus a per state cost of $29. Meanwhile, Premium offers up a swift way to prepare and e-file, with the added bonus of priority support as and when you need it. That costs $37 plus state additional of $29. 

Finally, TaxSlayer’s Self-Employed product will set you back $47 and also has the state additional charge of $29.There is an online guide to assist users in choosing the best version of the program for their needs.  

Even at these affordable prices, a notable feature is the included phone and email support (24 to 48 hour response) on the lower tiers, and live chat on the higher tiers. 

Read our review of TaxSlayer here  

Jackson Hewitt Online

(Image credit: Jackson Hewitt Online)

6. Jackson Hewitt Online

Jackson Hewitt Online combines its software service with real help

Ideal for basic filing
Wizard-style interface
Dependable help system
Can be a little patchy

Jackson Hewitt Online is an ideal solution for tax filing duties if you require online and real-person advice in order to ensure you’ve covered all bases. Jackson Hewitt Online has a range of products to choose from, all of which are obviously dependent on the complexities of your tax filing affairs. 

There’s a start for free basic level option, which is suitable for simple returns. That means it could work for those who are single or who are married and filing jointly. It allows for up to $100,000 taxable income, taking the standard deduction and covers W-2 wages and/or unemployment. It also covers earned income tax credit (no kids). Meanwhile, the $29.99 (+$36.99 per state filed) Deluxe package covers those with children and other dependents, schedule EITC and child tax credit affairs, dependent care expenses or those with student loans, educator expenses or retirement income. 

Top of the tree is the Premier edition that for $49.99 (+$36.99 per state filed) is ideally suited to complex tax return duties. It’s tailored to tackle those with income over $100,000, the self-employed, those with rental property as well as covering itemized deductions along with other income, credits or deductions.

Read our review of Jackson Hewitt Online here

Credit Karma Tax

(Image credit: Credit Karma Tax)

7. Credit Karma Tax

Tackle basic tax filing without any pricey overheads

No charge
Easy enough to use
Simple layout
You’ll need a Credit Karma account

Credit Karma will most likely be a familiar name as it’s been around for a number of years now, most notably supplying free credit scores. Its range of services now includes Credit Karma Tax, which is another online service for filing personal taxes. One of the most appealing aspects of Credit Karma Tax is that it’s free to use, although the trade-off to that is the fact you’ll need to sign up for a Credit Karma account.

If you’ve already got an account with them though it’s even easier to get started with the step-by-step filing process. Credit Karma Tax also benefits from the addition of support staff who are also on hand to help get you out of tricky tax spots.

Read our review of Credit Karma here