Tax time nears once more, which means you need to pick the best tax software to help you get your taxes filed to Uncle Sam. We evaluated five of the best tax software services to determine which are most suitable for specific tax needs.
Tax year 2020 — which is what the best tax software 2021 services — sees the expansion of a trend we first observed two years ago: Live tax assistance from a tax pro. Four of the five services we tested now have some variant of live tax pro assistance available. Overwhelmed by the prospect of dealing with your taxes? Pull together the necessary documents and at least one service has an all digital do-it-for-you option.
These options couldn’t come at a better time for tax filers, who have to navigate the tax impact of COVID and the coronavirus stimulus. The year 2020 keeps on giving, this time giving rise to new tax law guidance to address the impact of the current pandemic.
What are the best tax software services?
Our top pick for the best tax software for tax year 2020 is H&R Block’s Deluxe 2021. It stands out for its clean user experience, data import and entry and education resources, including those around the tax impact of COVID relief measures. All of H&R Block’s tiers of service — including the new Online Assist with a tax professional — are less expensive than the competing offering at TurboTax, and H&R Block’s free offering includes more tax situations than before. But H&R Block’s model of using local tax professionals for their version of “online” tax preparation leads to extra layers of process and a lack of price transparency.
Intuit TurboTax Deluxe 2020 stands out on the strength of its integrated live chat with tax pros and the new Live Full Service option to hand-off your tax preparation to a TurboTax tax expert. TurboTax is more expensive than the competition, but it also offers a unified digital experience that other services lack.
TaxAct Deluxe 2020 strikes a balance between value and functionality. And with the addition of Xpert Help, TaxAct joins the ranks of TurboTax and H&R Block in offering live tax pro help; however, the help is available during a more constrained time window than its competition. We found TaxAct Deluxe an attractive alternative for users who know what forms they need, and want a little less guidance and handholding through the process. The service also supports the widest breadth of tax situations targeting multiple business types and estates and trusts, none of which can be handled by competing online products.
The best tax software service you can buy today
H&R Block Deluxe 2021 (tax year 2020) is the best tax software overall. It builds on its strong foundations of the past years and does a great job balancing the needs of tax filers who are both experienced and those who need a little handholding. With the addition of Online Assist to access tax expert help at any point while you’re building your return, H&R Block fills a void in its offering while still providing the one of cleanest and most efficient tax interfaces we’ve seen and educational help to keep you updated on relevant changes in the tax world.
H&R Block’s approach to online help is more a la carte than most. For example, you will pay separately for Online Assist (to enable screen sharing and video chat with a tax expert) and Tax Pro Review, where a tax pro reviews your return and files it for you. Even so, H&R Block comes in at more reasonable pricing than TurboTax, although others are less pricey.
Intuit TurboTax Deluxe 2020 is not the cheapest option for tax software; nor is it the one with the best interface (we still find the small text frustrating, for example). However, for those who are reluctant to tackle taxes on their own, TurboTax is the best choice simply because of its expansion of TurboTax Live to include Live Full Service, an extra-cost option that lets you supply all of your tax data to a tax expert who will complete your return for you. That expert remains available to you year round for questions.
Beyond that, TurboTax continues to offer a solid user experience. The service and its structure remains largely unchanged from recent years, though some language has been tightened to become less colloquial. It remains a champ in terms of automating document import, guided data entry, and real-time assistance.
TaxAct Deluxe 2020 aims to vie for the mantle of best tax software, thanks to its currently lower pricing that comes in a bit under both TurboTax and H&R Block, and the addition of Xpert Help for live tax pro assistance.
TaxAct remains the most comprehensive service out there, with both web- and download-based options to cover a wide swath of tax-filing situations not directly addressed by rivals. For example, it offers solutions for tax-exempt organizations, trusts and estates, and multiple business options (sole proprietor, partnership, C-Corporation and S-Corporation).
TaxAct caters well to those who know what forms they need for their taxes, as it clearly delineates which forms are included with which product. But the company now provides better guidance on which package is appropriate for your tax needs. And it does so at reasonable prices, and with a flowing, easy-to-use interface.
TaxSlayer Classic 2021 (tax year 2020) has the honor of being the least expensive across the board. We liked how the interface’s left navigation pane is configured, with a detailed menu that lets you navigate at will through different sections of the return. We also liked that TaxSlayer provided direct data entry if you know the form you need, or guided data entry, in which the system asks questions to help prompt you through the process. The interface has some pleasant graphic touches, though we were admittedly not fans of the red and green buttons for continue or cancel.
TaxSlayer has an inexpensive add-on for tax expert help. We did note that service was heavy-handed in pushing that upgrade. The service is also the only one we tested that lets you work on returns online for as far back as 2017 in case you got behind. The experience overall is decidedly less smooth than on competing products, so if you can spare the extra dollars, we’d suggest springing for one of its competitors.
Credit Karma Tax remains free, and it continues to leverage personal information provided to Credit Karma to jumpstart your tax return. Users of Square’s Cash App can link it with Credit Karma Tax to gain the data sharing benefits.
The service continues to be very mobile friendly, with an interface designed to work end-to-end via mobile or desktop. The user experience is both streamlined and clunky at the same time, lacking the finesse in data entry options and attention to detail you’ll find in more polished, for-pay services. We don’t like the pseudo-gamification of the interface, which requires you to complete data entry in the designated order to “unlock” the next level; and we don’t like that some issues we noted two years ago remain a problem (such as limited options when noting your occupation).
Credit Karma Tax may appeal to those enticed by the word free, but when you run into tax questions, be prepared to pay with your time as you go beyond Credit Karma Tax to research your answers.
How to choose the best tax software for you
Picking the best tax software package for you comes down to three things: Price, complexity of your tax filing, and whether you want live help or an expert to review your return. Of our contenders, H&R Block Deluxe strikes the best balance among the three criteria noted above. It has a visually appealing interface, midrange pricing, and has vastly improved its live tax prep help with video chats and screen shares through the new Online Assist feature.
The race was a tight one: TurboTax Deluxe excels in its live help features, and it has the most seamless approach to enlisting a tax pro to do your taxes for you. If you need the maximum amount of help possible to get your taxes done, then TurboTax may be the better choice. One of the biggest drawbacks to TurboTax is its price: It’s the most expensive of the bunch. That said, its guidance and automation is top notch.
TaxAct Deluxe 2020 it stands out for its clean interface and variety of specialty tax scenarios competitors don’t support. It also has excellent guidance and adds live help, albeit for more limited hours than others.
TaxSlayer Classic 2020 has the least expensive pricing across its various tiers, and it has a dedicated TaxSlayer Military option tailored for the filing needs of those in service, but its usability and support is rough compared to the other contenders. For a totally free, beyond basic filing experience, CreditKarma Tax is reasonably capable, but it lacks in the support department.
How we tested the best tax software
We identified the five strongest candidates with online tax filing services. We then proceeded to review each tier of service provided by these candidates, noting the pricing, which forms and tax situations were included and how easy the company made it to determine up front what product you should purchase.
Next, we selected the least expensive paid tier of service, typically referred to as “Deluxe,” to represent the service in this roundup (in the case of CreditKarma Tax, we used its sole, free tier of service). We walked through setting up an account and creating a return, noting how the service’s interface and features functioned on a Windows-based Web browser. We paid attention to the language used, the kind of help available and how easy it was to enter data and reach the point of having a final tax return. We also noted what the experience was like if we realized midway through we needed a higher-tier version of the program.