For some people, choosing a tax software package comes down to trust. They want to go with the name they’ve heard of. And that’s fine. Trusting your software is important. For me, it comes down to price. That’s why I prefer a lesser-known software called TaxAct. It’s just as good, just as accurate, and much cheaper.

Of course, free is the cheapest, so find out how to win a boxed copy of the TaxCut software.

H&R Block TaxCut
TaxCut is the leader in the online tax software business. In addition, they still offer in-person tax filing in their office. Their interface is largely the same as last year’s. In addition to the option to file taxes in their office (for an additional fee), they also include their worry-free guarantee. If you fear being audited, that alone may be the deciding factor for you. Here’s a quick cost run-down:

Free Federal Return + Efile
Add 5.95 for instant advice about life advice

Standard – $14.95
This isn’t listed on the homepage. It was only offered when I started the Free return
Includes Worry-Free Audit Support, as do all packages from this point on

Basic – $19.95
Best if you have a straightforward return

Premium – $39.95
Best if you have self-employment income or life changes such as buying a home or having a child

Signature – $79.95
Best if you need live tax advice

For all packages, state returns are an additional $29.95.

TurboTax
TurboTax is owned by Quicken and has also been around for a long time. If you’re a Quicken user, you may appreciate the ability to import your data directly from your software (with paid versions). TurboTax also now offers audit support. Here’s a quick rundown of their options:

Free Federal return

Basic – $14.95
Best if you qualify for the EZ form

Deluxe – $29.95
Best for homeowners with a mortgage or medical expenses

Premier – $49.95
Best if you have capital gains income or rental income

Home & Business – $79.95
Best if you’re a small business owner (sole proprietorship, contractor)

State returns are $29.95 with the free version, $34.95 for the other versions.

TaxAct
TaxAct is by far the cheapest of the three, but it is just a software program, but they don’t offer audit support. Here are their options:

Free Federal return
Limited to 1 life event, but suitable for all types of returns.
State returns are an additional $13.95

Deluxe – $9.95
All life events are available, so choose this option if you had more than one event, like changing jobs and buying a home.
State returns are an additional $7.00

Ultimate – $16.95
The same as Deluxe, but with the state return included automatically.

Free IRS Return
If you know which forms you need and are completely comfortable doing your taxes on your own, then consider the new IRS fillable form options.

State returns are not included, so you may have to do those on paper if your state doesn’t offer a similar program.

For me, it comes down to price, but my dad is an accountant and I’ve been doing my own taxes since I was 16. If you’re not as comfortable filing taxes, then paying more for one of the better known programs may be worth it for you. None of them are bad, and none of them will get you into trouble if you enter the data properly. (If you “forget” to include some income, none of them will protect you.)

I did my taxes with TaxAct in about an hour this weekend. The actually program took about 30 minutes, but I also spent some time pulling together student loan interest documents and business expense records. If we’d had any life changes, it would have taken a bit more time. Unfortunately, we learned that we owe $1,000 more than expected, but we were prepared to owe money, so it wasn’t a huge shock that we underestimated slightly.

Have you used any of the above programs? What’s your preference? Tell me in the comments.

Comments

One Response to “Tax Software Cost Comparison”

  1. Me on February 24th, 2009 8:06 am

    My spouse tells me TurboTax offers free service for military members earning under 50k a year, adjusted gross. Haven’t check personally, but it might be a good option for our servicemembers reading this.

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