Best Tax Prep Service – Best Free And Paid Options

Taxes are complicated, to say the least. Thankfully, we only have to worry about doing our taxes once a year. While tax preparation is not a fun way to spend a weekend afternoon, it can be worth it if you’re getting money back. Tax prep software makes it easy for many individuals and small business owners to file their taxes accurately.

Now if you have more a more complicated tax situation, it is typically best to go to professional tax preparers. For example, if you earn rental income, are self-employed, or bought and sold stocks, a tax pro is the better option. A tax professional is more expensive but since they keep up with tax changes as part of their job, they can find tax breaks that tax software providers may not. There is also the IRS’s free tax preparation service that some may qualify for, but not everyone.

For the rest of us, tax preparation software will be able to handle filing a return. You have lots of choices when it comes to choosing what provider to use for your online tax filing. There is H&R Block, Jackson Hewitt, and Turbotax Live just to name a few. So, how do you know which one to choose? We did the research on the best tax prep service and have brought you our findings. Let’s dive in so you can find the right choice for your tax needs!

Should You Pay for Tax Preparation?

Paying a tax pro at H & R Block or another service provider can make sense depending on your tax situation. Having straightforward taxes is usually a good reason why you should do it on your own including cases like:

• Are single, have one job, and not really any other income coming in
• You are not a small business owner or considered self-employed
• Have complicated and varied investments

As long as you have the patience to sit down and do it without upgrading your TurboTax package to a paid version, can do it yourself. Now you do need to have a basic understanding of how taxes work.

Paying for Tax Prep

Of course, there are also reasons why you may want to lean on the pros to handle your taxes. If you:

• Make over $200,000 a year
• Started a business
• Had a marriage, divorce, children, or another major life event
• Have trusts, partnerships, or other complicated investments
• Have questions that you’re unsure of the answers to

Now if you’re paying someone to do your taxes, you want to get the best out of this service. That means getting help and advice on optimizing your accounts so it lessens your tax burden, getting all the credits and deductions you qualify for, and ensuring that your business structure is optimized to lower your taxes. Make sure that you provide your tax professional with all the necessary documents including your W-2, student loan interest, etc. They can only do their best if they have all the information they need.

Free Tax Prep Service

Free services and softwares for filing your tax returns are a bit difficult to find these days. There are many tax services that advertise “free”, but it is common that you’re forced to upgrade as you go through the process of filing your return. If you qualify to file your taxes for free and have simple tax returns, it is definitely the option to choose.

Self-employed individuals and small business owners should have another plan as these tax preparation services generally don’t handle cases like the need to make business deductions well. The IRS Free File Program is typically the one that people think of when it comes to free tax software. But there are actually more options out there.

IRS Free File

One of the first places you may think of to file your federal returns for free is through the IRS. This service is available through a partnership between the IRS and the Free File Alliance, which is a nonprofit organization. What this tax filing service provides is access to free tax preparation services that are available through other companies. You’ll get major tax preparers like TaxAct and Intuit among the recommended options. To qualify for the IRS Free File, you must make less than $72,000 in adjusted gross income.

There are more than 20 states that have a similarly structured Free File program for the state return. So if you live in the following states, you can also be matched with state filing services for tax preparation service: Arkansas, Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri Mississippi, Montana, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont, Virginia, West Virginia, and the District of Columbia. The services may vary per state so keep that in mind.

One important note is that you might be charged for your state return, depending on which tax preparation software option you go with. The IRS Free File also provides everyone with the ability to use a fillable electronic version of the IRS, even if your income is over the limit. These tax forms won’t provide must guidance however so it might make more sense to contact a tax professional or look for other online tax software.

IRS Taxpayer Assistance Centers

You can get help on your tax returns with a tax preparer at your local IRS office. Simply locate a site near you and call them up to make an appointment. The availability per state may vary. They can help potentially help answer questions about tax credits, a tax code, your student loan interest deduction, and more. What can’t be resolved over the phone can be done in-person with a tax pro.

Be sure that if you decide to get a tax preparation meeting at a center, you bring all your necessary tax forms. Treat it like walking into a Jackson Hewitt or H & R Block where you bring all the documents necessary for your tax returns. This includes a W-2, 1099 forms, and proof of identity. However, keep in mind that if your taxes are more complicated, they might not be able to help you. Discuss your tax situation over the phone before scheduling a meeting about your tax filing.

Volunteer Income Tax Assistance

The Volunteer Income Tax Assistance or VITA is a federal grant program that provides free tax services to the elderly, limited-English speaking ability, disabled, and low to moderate-income individuals. The program works with community organizations across the country, per state, to find local, IRS-certified volunteers to provide free tax prep.

You can trust these tax preparation volunteers to provide the best tax help. Every volunteer must pass tax law training and meet or exceed the standards outlined by the IRS. Training included in this program also includes the guidelines for maintaining the privacy and confidentiality of the taxpayer’s information. Before filing a tax return, the tax preparer will have their work reviewed to ensure its quality. Volunteers who work within this program have filed tens of thousands of federal and state returns.

These free tax preparation services are typically offered to individuals who make up to $57,000. Now, this option may not work for you if you have a complicated tax situation. For instance, if you a freelancer and need to prepare a Schedule C with losses or have tax forms that must be filed for nondeductible IRA contributions.

MilTax

Members of the military can benefit from this free tax software through this Department of Defense program. The free tax preparation itself is provided by H & R Block. You can use online tax filing to prepare your own tax return. The e-filling is specifically designed to address the unique tax situation for DOD members. For example, the H & R Block online tax service will help with the complexities of taxes due to deployments, combat and training pay, living overseas, multistate filings, and other needs. This makes it one of the best tax prep services for servicemembers.

The self-paced tax filing software has a user interface that works by walking you through a series of questions. This process helps you complete your taxes and file for your federal and state tax returns. You can file up to three state tax forms. H & R Blocks’ tax preparation services are guaranteed to accurate.

Military members and their families can also receive access to financial and legal resources so they can get help outside of just their taxes. MilTax consultants can also provide other support options like via live chat and phone. These tax prep professionals are also part of the VITA program. So if you prefer support options where you can get face-to-face help from a tax professional, you can find one nearby.

Tax Counseling for the Elderly

Looking for an option for a free tax preparation service when you are 60 or older? Using this federal grant program you can find community organizations and nonprofits that provide free tax preparation services nearby. While the program favors those in this 60 plus demographic, there is no minimum age requirement.

The Tax Counseling for the Elderly, or TCE for short, works much like the VITA program. Every tax pro must undergo rigorous training and qualifications to provide the best tax preparation service possible. The grant money provided by this program helps fund volunteers for their out-of-pocket expenses like transportation, meals, and other costs that are incurred as a result of providing tax counseling assistance at a convenient site.

Tax support is provided in the normal period for federal return filing that runs from January 1 to April 15 every year. Taxpayers who want more assistance can also receive tax support through various activities that can be conducted throughout the year.

AARP Foundation Tax-Aide Program

The AARP Foundation Tax-Aide has provided in-person and remote tax assistance for over 50 years. Their tax return services are available primarily to taxpayers over the age of 50 and who have low to moderate incomes. They also provide help to tax filers throughout the year to help answer tax questions.

Their tax pro volunteers can prepare most returns including those who have self-employed income (with limits), qualified business income deduction, charitable cash deductions, health savings account (HSA), IRA contributions, most tax credits (earned income tax credit, education, premiums credits, foreign tax credit, retirement savings credit, and more). If your tax situation includes rental income (with the exception of land-only rentals or rentals of a personal residence of fewer than 15 days), royalty income with expenses, farm income or expenses, or other more complicated situations, they might not be able to help with your returns.

Low Income Taxpayer Clinic

Low Income Tax Clinics is an option for those who may still need help with their tax returns after filing. LITCs are not places to take your tax preparation issues, rather if a problem arises after your returns are filed. Typically a tax filer will get a letter from the IRS that institutes more follow-up.

Some of these LITCs receive some federal funding to help suppose individuals who seek assistance. Universities with tax law programs are often the ones that run these programs. Law students provide the work in determining how to fix issues related to taxes. One item to plan for is that this help is generally available on the federal level. You may need to look for a different option if your issues stem from your state returns.

Your Local Library

If you need help with your federal and state filing, you might be able to find that help with your tax return at your library. Many libraries will offer resources to tax filers to help with their taxes or answer questions. Plan accordingly by reaching out to your nearby location to find out what tax return help they may provide. You may need to bring in your W-2 and other tax documents on-site to make the best of this option.

Libraries typically carry the forms for your federal and state returns in paper form with the instructions. And if they don’t have any resources available on-site, they can point you in the direction of an option locally that can help with your tax return. Another place you can try is the community center in your area. They may offer tax services or know of the best resources that can help nearby.

Best Tax Prep Services – Major Providers, Still Free

Below are some major, popular tax prep service providers. There is typically a free version of each tax preparation software that’s available through one of these major providers. You may find a couple of these tax software providers using the IRS Free File, but not all. TurboTax, H & R Block, Credit Karma, and Jackson Hewitt are among those that offer a free version.

It’s best if use one of these software providers if you have income from one job and your tax returns, aren’t itemized. The version may offer to do your state return as well. You should plan to pay for your state filing if the deadline is coming up as many providers charge to use their tax software during crunch time. Here is a look at some of the best tax software you can use for free below.

H&R Block Free

H&R Block’s free version offers a solid user experience and navigation options that make it arguably the best tax software. Using their site, you often get more than you out of their tax software than competing free versions. The user experience is easy to use and straight-forward. As you use the online tax software, you can even get help from a human (for an added fee). So if you have a question about tax cuts, earned income tax credit, student loans, or something on your W-2, H&R Block’s tax software makes it easy to get help from a tax pro.

You can file both your federal and state returns using the free version. You can file schedules 1 and 3 of Form 1040 so that you can report items like student loan deductions, business income, alimony, and Lifetime Learning Credit. If you are using H&R Block to complete your taxes and you are self-employed, a freelancer, a landlord, or need to itemize your deductions, plan to upgrade to one of their paid packages.

TurboTax

There are still other choices when it comes to getting the best tax software for free taking out H&R Block. TurboTax tends to be more expensive than other paid options which can have some leaning towards other TurboTax alternatives, but the free version of this tax software may work if you don’t need all the extras. TurboTax has one of the best designs and flows.

Using the free version of TurboTax, it can only handle simple tax returns. You can file your 1040, state taxes, and unemployment income that’s reported on 1099-G. But if you need to deduct things like student loan interest, mortgage interest, have a business or freelance income to report, have stock sales, or income from rental properties, the free version of TurboTax won’t work for you.

Jackson Hewitt

TurboTax and H & R Block are probably the best-known for their tax software. Many of these brick-and-mortar tax pro companies have rolled out their own online method for filing taxes. So if you’re wondering what tax software other than the H & R Block free version to consider, add Jackson Hewitt to your list. You can do your federal and state taxes using their site, much like others like TurboTax.

Their tax software doesn’t offer as many of the robust features as competitors like H & R Block and TurboTax. This makes it a runner-up to their tax software. But the site does have clean and easy-to-use navigation and you can go speak to someone face-to-face if you have questions about your return. Jackson Hewitt locations are found in many convenient locations including Wal-Mart so you rest at ease that you can turn to an expert on your taxes.

Credit Karma

You can now get Credit Karma tax help and best of all, it’s free. if you aren’t looking for potentially going to a brick-and-mortar location like Jackson Hewitt has plenty of, Credit Karma is a solid runner-up. Credit Karma tax software supports most of the IRS forms and schedules that are needed to file your federal taxes and state return. Plus you can even use it for your Schedule C.

The user interface is intuitive with great navigation options to boot. Still, you should plan to use Credit Karma tax software if you have fairly simple returns or understand taxes, you could plan to use Credit Karma. But if have more needs, then consider using H & R Block or TurboTax instead. They offer the best “help” content and can explain the tax code in far more detail.

FreeTaxUSA

You can file your federal taxes for free using FreeTaxUSA’s software. However, it will cost you $14.99 per state. Their tax platform is very easy to use, though it is missing some features that would be nice to have. The ability to upload documents so you don’t have to spend as much time entering data and being able to connect with a tax professional are some of the items that are missing.

Still, FreeTaxUSA is a convenient tax preparation software especially if you don’t qualify for free federal returns in other places. They do tend to have long waits for customer service so you might opt for paying $6.99 to upgrade to their Deluxe edition. This gives you access to priority live chat support, unlimited amended returns, and audit assistance.

Best Tax Prep Services – Paid

You will find more of the same names when it comes to the best paid tax software as the free ones listed above. H & R Block and TurboTax have great tax software features which is why they make the cut. There are still some other solid contenders out there in the market to consider too. You’ll want to check each of these tax provider’s websites to get information on their latest offerings as they change frequently.

H&R Block

The simple and straightforward interface is why H&R Block consistently ranks among the best places to file your return. There is a Price Preview button that allows you to see what package you’re purchasing, the add-ons selected, and your running software bill. There are more features that make filing your return easier including:

• Import- Did you use TurboTax or another provider to do your return last year? H & R allows you to import your return from last year from any provider, making switching easy.
• Donation calculator – Many of their packages include DeductionPro which helps you calculate the value of donated items, clothes, etc.
• Mobility – The tax software is online so if you start doing your return on one device, you can log in to another to finish it. The best part is there’s even a mobile app if you plan to do it on your smartphone.
• Auto-Import – Some of your documents like your W-2 can be imported to save you time typing in the information.

Do you want more help because you’re self-employed or wondering about the different tax rules per state? The support options provided by H&R Block allow you to search their knowledge base and video tutorials, get free chat or phone tech support, or even get one-on-one assistance from a human.

TurboTax

As mentioned, TurboTax tends to be pricier than other options out there. But their interface is slick, allowing you to skip around as needed. They have resources through the process to offer tips, explainers, and more. You can import electronic PDFs of previous tax returns from competitors, auto-import documents like certain 1099s and your W-2, use their donation calculator, and work across devices or through their app on a phone or tablet.

TurboTax also provides everyone with free audit support straight from a tax pro in case you get audited. Getting this type of support is important because it is definitely scary to get audited by the IRS. Plus if they can’t get you connected with a pro, they will refund your money.

TaxSlayer

This is among the best options for those looking for a low-cost solution who have a simple tax situation (i.e.have W-2 income from one source) or are an experienced filer (i.e. have been filing self-employed tax returns for years) Their cost for their DIY filing ranges from free to $54.95. You can add another $39.95 per state return you need. If you don’t need tax preparation assistance and are comfortable with using an online software platform, TaxSlayer could be right for you.

As you might have expected, their customer support isn’t exactly the best. You can get customer service delivered via email or phone in their more basic-level plans. But if you want access to live chat support, their Ask a Pro support, or priority support, you’ll need to upgrade to one of their premium plans. Their interface is more clunky and you won’t get access to features found with competitors like H & R Block unless you upgrade to their higher-tier plans. But even if you do, some of these features like their document upload don’t work that well. The bottom line is that TaxSlayer could save you money if you’re ok with something that’s not a plug-and-play platform.

TaxAct

If you want a good quality tax software that won’t cost you as much as an H & R Block or TurboTax, TaxAct might be it. They may not be the fanciest, but when it comes to the best tax preparation, it’s not like appearances necessarily matter. You still get the features like access to a tax pro and on-demand help you get from the bigger players without the price tag.

TaxAct also offers a free version to file federal taxes that charges $19.95 per state. Their other three versions range in cost from $44.95 to $79.95. Each state return will cost you $54.95. The look and feel of TaxAct is similar to competitors. You can import your tax return from last year as long as it’s in PDF form. You can also only bring over 1040 as opposed to your other supporting forms and schedules. Certain tax documents can be imported and there’s also a donation calculator available. The software is all online so you’re free to work on it from different devices or through their mobile app.

Local Certified Public Accounts

Despite all the great technological advances that have happened in the tax arena, sometimes it just makes sense to work with a CPA. Unless you have a simple return like only needing to file a 1040EZ, or a 1040 with a standard deduction, you could benefit. Working with a CPA offers many advantages including:

• State-licensed – CPAs must hold a license in the states that they practice in. They must get continuing education or run their business using certain standards to maintain their license. That means you’re going to get a high quality of service.
• Retention of records – When you go into the doctor’s office, they will keep track of your medical records. That’s the same as when you work with a CPA who maintains your tax information.
• Tax Planning – The advice a CPA can provide throughout the year is the best part of working with a CPA. They can help you make the right year-end tax moves so you can save money that no tax preparation or software company can do for you.

The CPA’s billing method can vary among different CPAs. Some of the most common methods include charging a flat fee for each tax form/schedule that’s filed, setting an annual fee (with other charges if your tax situation changes), or paying a set fee for each data point.

Live Help Online

The COVID-19 pandemic caused a lot of changes in many different industries and tax preparation was no exception. Tax prep providers have improved their offerings for live help so you can get help from a tax pro as you do your taxes online. H & R Block Online Assist and TaxAct Xpert Help are both solid options if you want to get live help. We really like TurboTax which is detailed below.

TurboTax Live

If you want a plan that includes some human assistance, you can get it through TurboTax. Their TurboTax live offering is a software platform that has Certifed Public Accountants available if you need more help. You get the best experience by having your taxes checked over, tax questions answered, and a person walking you through the full process of filing your taxes. No matter whether you are self-employed, a new couple, or an individual who has a unique tax situation, you want to make sure you’re getting the maximum refund possible.

TurboTax has a tax pro available to alleviate the stress of filing your tax return. Since your return is checked by a CPA, you can rest assured that your taxes are done right. The tax software itself is easy to use and intuitive. If you do get stuck or have a question, all you have to do is find the button for “Live Help”. TurboTax has many of the same features found with H&R Block such as being able to import your taxes from another provider, auto-import, donation calculator, and mobility.

The Bottom Line: Filing Your Taxes

Ultimately the best tax preparation service for you depends on your tax situation and your personal preferences. Don’t go with free tax prep software if you have more advanced needs. If you are not particularly tax or tech-savvy, one of the more intuitive solutions that offer live help will save you time. No one really likes to do their taxes, even if they are getting a refund. But working with the right tax software or service will ensure the best experience.