Who Has the Best Price for Tax Software?

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With all the options for free federal tax software, do you wonder who really has the best price? I do. To answer the question, I thought a tax software comparison chart would be useful to summarize the prices and differences between federal and state tax software programs.

This tax software comparison chart lays five of the top online tax software programs (TaxAct, H&R Block At Home, TurboTax, TurboTax Freedom Edition, and Jackson Hewitt) side-by-side. I selected these 5 based on my personal experience and the strength of the brand behind the software. I looked through a number of the free tax software programs listed on the IRS’s website, but did not recognize the brands, was not comfortable with what I found about the software program’s owner and opted to stick to what I knew. I mean, seriously, your taxes contain all your important information. It is not a time to monkey around with a fly by night company.

TaxAct is the only one of these software programs that is not owned by a larger well-known organization. I might have left TaxAct off, but I have personally used it the last two years and been satisfied, plus it is the most cost effective tax software for most Americans.

Tax Software Comparison Chart

TaxAct H&R Block at Home TurboTax TurboTax Freedom Edition Jackson Hewitt
Eligibility requirements Open to anyone Open to anyone Open to anyone Must meet one of the following: 2010 adjusted gross income (AGI) of $31,000 or less, Active Duty Military in 2010 with AGI of $58,000 or less, or you qualify for Earned Income Credit Open to anyone
Offers free Federal 1040EZ Yes Yes Yes Yes Yes
Offers free Federal 1040 (incl. Schedule A for itemized deductions, if applicable) Yes Yes No No
Exclusions on free Federal returns None (includes all e-filable forms incl Schedule C) Income from self-employment, rental property, royalties, estates, trusts, partnerships, farming, or sale of assets Minimal guidance provided, must be able to complete forms independently.
Cost of federal return, if not free Starts at $9.95 Starts at $19.95 Starts at $29.95 Starts at $27.95 each
Offers free state returns No No No Yes. If you qualify for their free Federal and live in AL, AR, AZ, GA, IA, ID, KY, MI, MN, MO, MS, NY, NC, ND, OK, OR, RI, 

SC, VA, VT, or WV.

Cost of state return with free Federal return $14.95 each $24.95 each $27.95 each $29.95 each
Cost of state return with paid version of Federal return $8.00 each $34.95 each $36.95 each $29.95 each
Who owns the tax software? 2nd Story software H&R Block Intuit (maker of Quickbooks, Mint.com and Quicken,) Intuit (maker of Quickbooks, Mint.com and Quicken,) Jackson Hewitt

Boxed and Downloadable Tax Software Options

Some people are uncomfortable with online tax software programs and prefer to buy the software in a box or download it on to their computer. If that’s you, then here are some options for you:

Amazon’s Tax Central. Amazon.com has the best prices I could find on all the major tax software. Since most of the software costs more than $25, you order will likely qualify for free shipping.

You pay a little more to buy tax software from Best Buy, Office Depot or OfficeMax, but you’ll get some perks that aren’t available through Amazon.com. All three of these retailers offer free in-store pick up for items you order online so you can avoid shipping charges.

Best Buy. Buy a qualifying tax software program and get 50% off a handful of other software titles. You can also avoid shipping charges by ordering online, then opting for in-store pick-up.

Office Depot. If you buy a qualifying tax software program from Office Depot, then you qualify to get 30 different software titles free after mail-in rebate. Their sale prices are comparable with Best Buy, albeit in some cases they are slightly more.

OfficeMax. Buy a qualifying tax software program from OfficeMax and you can save up to $45 on other software titles, including my preferred anti-virus program, Panda Internet Security.

Helpful Tax Tools

In my research of these different tax software programs I found a couple of free, useful tax-related tools.

Deduction Pro for Charitable Contributions

If you gave items to charity in 2010, then you’ll need to calculate the fair market value of those things. Deduction Pro is a free software tool that helps you estimates the value of your charitable contributions.

Earned Income Credit Calculator

If you’re looking to answer the question, “Do I qualify for the Earned Income Credit?” then this Earned Income Credit calculator will help you figure that out.

Your turn: What are your best tips for keeping the cost of doing your taxes low?

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  1. christy says

    This is my 3rd year using TaxAct and I love it!! Very user friendly and it imports your data from previous years so you don't have to start all over. We pay around $15 total for fed and state.

  2. Sheila says

    Carrie, i think you meant, that tax act is the only one NOT owned by a larger company. I used it last year and was happy.

  3. Rhonda says

    I know it's not the least expensive, but I love Turbo Tax and have always been satisfied with them. With something as sensitive as taxes I go with what is reliable not necessarily the least expensive.

  4. Pam says

    I'm using H&R Block at Home Deluxe. I bought it at Target last month when it was $24.99 after gift card and coupons. It was $49.99.

  5. Nicole says

    I have used tax act for at least three years as well and love it. Saves so much time to have your prior year history there and my return has always been filed promptly and got a quick refund!

  6. Fawn says

    I started using Turbo Tax many years ago and have been satisfied. I like that it imports my information from the previous year and having all my past records in one place so I haven't really looked into the other options. There are many links out there to get a discount on the online version. I found 35% off through my online credit card accounts. Try Citi (look under special offers) or Chase, and I think Discover had 25% off.

  7. Sam says

    I've used TurboTax and HR Block in the past. This year, I gave TaxAct a try. I used it for both personal and business taxes. I used the FREE federal file and since it fills in all of the state info as well, I did my state taxes for FREE, by hand. They are also the cheapest when it comes to doing business taxes.

  8. Jamie says

    I cannot believe anyone hasn't suggested preparing your taxes with a few of these online services to see which one gives you the biggest refund or the smallest liability, depending on your situation. Personally, I have always used and been happy with Tax Act. But a friend told me that last year she had a 2K liability when they first prepared their taxes so they prepared it on two other sites until they found one where their liability was only $800 – a savings of $1200. I tried that this year, prepared with H&RBlock online and came out with a liability of $300. Did taxes same way with Tax Act and came up with a refund of close to 3K. It might take a little extra time, but shop around to a few of them to see where you get the best refund or smallest liability – there is no cost to prepare, only the fee to file state.

  9. Lyn-Ellen Scott says

    Taxact was one of the first softwares this year to address the non reciprocity between Wisconsin and Minnesota. Great product.

  10. MichelleC says

    Carrie, I'm slow in reading your posts this week, but the Deduction Pro link now goes to Bradford Exchange Checks. FYI.

  11. Angela says

    My boss turned me onto the list of companies on the IRS website back in 2004 and she has used several of them from one year to the next and has never had any issues.

    This year I went out to the Minnesota Department of Revenue and found a list of companies who will file your federal and state for free. (depending on eligibility) also almost every financial institute give some sort of discount for turbo tax just check the home page of your bank, mortgage company, 529 plan, and other investment institutes.

  12. Tori says

    As a CPA licensed in two states, I can tell you that if your return is done correctly you will get the same result no matter which software you use…it is truly a case of garbage in garbage out…..not the maker of the software package. I have found over the years that some software is easier to understand than others – due to the language they use or the way they ask questions.

    But all software has issues (even the ones WE pay tens of thousands for) the more complicated your tax return gets and that's when you may need a certified preparer or a CPA instead. For about 80% of the public, you can be taught how to do your own tax return and with software you will never need one of us – and sorry but we have no interest in doing your return either as it takes more time just to type in the info than we can justify charging you for. For the rest, becareful if you are getting very different answers from more than one software package – the IRS has up to 3 years normally & 6 years if there is a big mistake on your return to come back at you (with penalties & interest charges) – you should print both out and compare them to see where the differences are before you file one. With computers the IRS is getting faster & smarter at catching problems, and I would really prefer not to have you step in my office with those dreaded words "I got a letter from the IRS saying they are auditing me…."

  13. Erin says

    Will it walk you through the filing process for the non reciprocity or do you have to fill out forms manually? I bought HR Block and it was prompting me to print and fill out forms because the software didn't include them.

  14. says

    I was at the Dollar Tree today and noticed that they're selling the H&R Block At Home Basic for $1. I'm not sure on the details, as I already purchased my software (TurboTax), but if you're still looking, it might be worth checking out.

  15. kimm says

    I've been using TaxAct for quite a few years (I think around 10)…I love it. They added the deduction calculator a few years ago which I found very helpful. Determing the value of non-cash deductions has always been the part I dreaded the most (ie MAJOR procrastination).

    I, too, was a bit surprised about the comment of seeing which tax software gives you the lowest tax liability. I agree with someone's posting that they really all should give you the same bottom line result…

    Perhaps the other packages have this too, but TaxAct provides a 'this year vs last year' comparison which I find very helpful. It helps me to pretty quickly determine if things look out of whack. I noticed some discrepancies last year, and when I reviewed my entries, realized I had made a couple of mistakes.

    Someone asked if TaxAct works with the Mac….as of last year, I don't believe it did. However, you can check out their website (taxact.com) and find the system requirements.

  16. Brenda says

    Does anyone know of a store that I can buy the box version of tax act? Looking online can't find a store that carries it.

  17. SD Grey says

    I agree with the post about shopping around.

    You can prepair your taxes for free on most of the online tax sites. They only charge when you want to print or e-file.

    I have been a fan of complete tax for the past several years http://www.completetax.com/.
    Great post – but there are many more options out there for preparing taxes than the top providers.

    • says

      Agreed that lots of options exist, but personally, I like to stick with the big brands when it comes to taxes because of the sensitive nature of the information I am inputting and the need for the software to be 100% accurate (or for the brand to stand behind their product should they make a mistake). The IRS's website has 17, I think, different tax software options that are free.

  18. Catherine says

    Hi Carrie,

    No one has mentioned that regardless of income, you can submit your forms for FREE through the IRS website, using their link to Free File Fillable Forms. I used TurboTax online to double check my calculations (also free, up to the point of printing), but then filed through the IRS site.

    Hope this helps!

  19. UnsatisfiedCustomer says

    In 2010, I wound up paying $313 for my tax preparation at H&R Block. I was charged over $100 for the preparation of one form alone. The total time of my tax preparation was less than an hour, but you are not charged by time; you are charged by the form.

    I feel these pricing schedules and methods are exorbitant and unscrupulous. Never again.

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