Ready for that refund? The simplest way to get it fast is to do your taxes yourself, with the help of the right online tax tools. The three most popular:
Let’s take a look at all three so you can pick the right one and get going.
Get it done free!
All three companies — TurboTax, H&R Block and TaxAct — offer a free filing option: perfect for a simple return. A college student who has income from a summer job in retail, a single W-2 and little in the way of deductions and expenses would be a perfect candidate.
There are also other ways to get your taxes done free, depending on your age and income. For details see “7 Ways to Get Your Taxes Done for Free.”
Free’s not good enough? Then you need to know …
What to look for
If you have anything more than a really basic return, the money you’ll save on a single deduction or tax break often will more than pay for the cost of any of the leading tax products. Having said that, there’s no reason to pay more than you have to.
Three things to look for:
- Does the tool cover your circumstances, for example, as a student, military service member, homeowner, investor, small business owner, self-employed person?
- Is it easy enough to use that you’ll be able to work through it without needing a lot of help?
- Does it find deductions that you know from previous years you are entitled to take?
All of the leading tax tools — even the most costly — will let you start a return without paying anything. You won’t be able to save or submit that return, but the process of walking through the tool will give you a sense of whether it’s right for you.
Here’s a quick review of each, complete with prices.
TaxAct is the least expensive of the three tax tools we looked at. It’s most popular edition is TaxAct Plus, priced at $20 (plus an additional $30 for state returns).
TaxAct also offers TaxAct Premium for self-employed people, contractors and freelancers for the price of $35 (and $30 per state).
TaxAct characterizes TaxAct Plus as being the best choice for homeowners, for those who need to do itemized deductions and those who have investments. The real value in TaxAct, however, is that it’s inexpensive and easy to use. A broad range of circumstances are covered in simple, clear language (using images that help make the meaning of the category names even more understandable).
Our CEO, Stacy Johnson, says he’s used TaxAct many times and it’s worked fine for him.
I’ve been helping various family members do their taxes using H&R Block online for years now, so I can personally attest to the fact that it’s easy to use. For simple returns, you just need a few basic documents and answer some basic questions.
H&R Block‘s first step up from free filing is its “Deluxe” edition for $39.99 (plus $36.99 for every state you file in).
According to H&R Block, this edition is aimed at “finding every last deduction you’re entitled to — for your home, investments, retirement income and more.” The company also offers a couple of guarantees. The first is that if you discover there was anything which H&R Block missed in filing your return that would have resulted in either a larger refund or a smaller tax liability, it will refund your filing fees and re-file an amended return without charge. The second guarantee is that if H&R Block makes a mistake on your return, it will pay the resulting penalties and interest.
H&R Block also offers H&R Block Online Premium, which will run you $54.99 (plus $36.99 per state filed), but claims to offer everything you need to file as an investor, small business owner, self-employed personal or holder of real estate investment rental properties.
As a longtime customer, I’d say the biggest reason for choosing this solution is the help and support behind the product. Not only is good support included within the product, but — unlike most online tax tools — H&R Block Online users can ask for help online, on the phone or even go into a physical H&R Block office and talk to a tax professional.
Of course, talking to someone in person is likely to cost you at least a little money, but, if you get really stuck, it’s nice to know that you can go see someone who can work with the information you’ve already entered to sort out any issues that you have. As such, this could be a great “transitional” solution for someone who is used to working with a tax professional.
TurboTax from Intuit actually comes in no less than four editions. The first offering beyond free is TurboTax Deluxe for $39.99 (plus additional per state filing fees of $36.99). It looks to cover all the needs of anyone who owns a home, has deductions, but doesn’t have a lot of investment income or rental properties.
Given the history of Intuit — with its Quicken and QuickBooks products — It should come as no surprise that TurboTax actually offers two upper tiers of tax tools. The first is Premier (aimed at tax filers with investments and rental properties), which sells for $59.99 plus per-state fees, and the second and top tier is TurboTax Self-Employed (which handles personal and business income and expenses), which costs $89.99 plus additional per-state fees.
If you are an active investor, own real estate property or are self-employed, I would go with TurboTax Premier or Self-Employed from Intuit. For QuickBooks users in particular, the TurboTax offering will feel more like home (and leverage data you have in QuickBooks Self-Employed).
How are you handling taxes this year?
Are using a different online tax tool to prepare your return this year? Or have you tried one of the market leaders and been impressed or disappointed? Share your thoughts in comments below or on our Facebook page.
This article was originally published on MoneyTalksNews.com as 'Maximize Your Tax Refund by Choosing the Right Tax-Filing Tool'.