Five Best Tax Preparation Tools
Friday, February 17, 2012 at 10:17AM Lifehacker: Five Best Tax Preparation Tools
It's tax time, and here in the United States you're guaranteed a faster refund if you're due one by filing your taxes electronically. The trouble is that there are dozens of tools that can help you e-file. Some of them help you maximize your deductions and make sure nothing's overlooks, and others just make the filing process quick and easy. Here are five of the best tax preparation tools, based on your nominations.
Earlier in the week we asked you which services you trust to file your taxes accurately, quickly, and easily. You guys definitely had some favorites, but here are the top five nominees.
TaxAct (Basic: Free, Deluxe: $9.95, Ultimate $17.95)
TaxAct combines a feature-rich filing program with an easy-to-follow online guide and tutorial that will make filing even complicated taxes easy and straight-forward. You can file entirely online, or download the Windows app and run it locally. It's not as popular as some of the bigger names, but it's product has been steadily improving over the years, and that's earned it a decent following. You'll have to deal with regular nags to upgrade to the deluxe version for extra features or access to prior year's returns (which the service has if you've filed with them previously, but won't let you access until you pay up), but the decision is ultimately yours. The Deluxe package gives you access to prior years and more granular filing options, while the Ultimate package includes everything available in Deluxe and will file your state return as well. If you have trouble with your return after filing with TaxAct, they'll pay any penalties or fines you may incur due to improper filing fees.
FreeTax USA (Basic: Free, Deluxe: $5.95)
FreeTax USA is one of the newer free filing services to enter the mix, but it boasts over 7 million returns filed to date, and its rock bottom price beats TaxAct, which used to hold the "cheapstake's choice" award. The basic service is completely free, entirely online, and walks you through the filing process with an online tutorial that the service promises minimizes mistakes and maximizes your return. All of the features you would expect are available, including PDF copies of your return, the ability to pay or get your refund electronically via direct debit/deposit, and the option to file individual deductions and make granular changes if your taxes are more complicated than most. If you choose to file your state return at the same time, you'll only have to pony up $9.95 to do it, but $5.95 more gives you the full Deluxe package, which opens up the ability to amend your return later if you have to and gives you access to FreeTax USA's audit support services if the IRS doesn't like what they see on your return.
H&R Block At Home (Basic: $19.95, Deluxe: $44.95, Premium: $64.95, Premium & Business: $79.95)
H&R Block At Home is an extension of the company's in-office filing services, and the company has an impressive spread of software packages with different features at different price points. All of the packages come with H&R Block's audit defense services (as in, they'll send an actual lawyer to help and represent you if you're audited by the IRS) and robust customer support that, in addition to being able to answer questions about the software, can actually answer tax questions and help you with your return. You likely won't need help with the software anyway—the package is easy to use, has audio and video walkthroughs and tutorials, and is designed to be so robust that you won't need much help filing, especially if your taxes are simple. The major difference between the spread of suites is the level of depth required, and whether you own a home, a business, rental property, need special forms, or have exceptionally complicated taxes to file. H&R Block's tools are available online, for Mac, or for Windows.
TurboTax (Basic: Free, Deluxe: $29.95, Premier: $49.95, Home & Business: $74.95, Business: $129.95)
Intuit's TurboTax is clearly the juggernaut in personal tax filing tools. The service guarantees that whether you use their online tool or their Mac or Windows applications, you'll get your largest possible return, guaranteed. TurboTax has been called all sorts of things, from confusing and difficult to muddle through to simplistic and easy to use, so your mileage may vary, especially depending on the complexity of your returns. Even so, TurboTax was one of the first tools to offer truly robust self-filing services and tools for people who were worried their taxes would be difficult but still didn't want to pay a professional. If you get stuck, you can always call TurboTax's support team for personalized advice on how to get through the trouble you're having, and their team will even help you make sure you haven't made any other errors or mistakes while you're filing. For many people, their customer support alone is reason enough to invest in TurboTax year over year.
Hire an Accountant or CPA (Variable Cost)
Many of you noted that you didn't bother with your taxes, and you didn't trust software packages or online applications to handle your tax returns. You'd rather hire someone to make sure you cover all of your bases and get the biggest possible refund—or set up your finances so you're not overpaying your taxes in the first place and have to get a return at all. Some of you noted that you had family members who were accountants and you make them do the dirty work for you (hey—be nice to them, you know how it feels to be the family's tech support, don't you?) and others noted that between property ownership, being self-employed, or just having made too many life changes in recent years, you were better off not stressing and letting someone else handle it entirely. It's worth noting though that not all accountants are CPAs, and not all of them are the same, so make sure you do your research before trusting someone with your money.