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