Which Tax Prep Program Is Right for You?

With tax season upon us, it’s time to figure out your plan for doing your taxes and filing your tax forms. If you aren’t eligible for free tax prep, you can enlist the help of a tax pro or you can choose to tackle completing your tax return yourself. (Whatever you choose, don’t forget to look for potential educator tax deductions!)

Nothing about taxes seems simple, but do-it-yourself tax preparation software can help speed up and simplify this dreaded annual task. Software you can use yourself remotely can be a viable alternative to in-person assistance for those who are still being cautious to protect against possible Covid-19 infection.

Each year, tax prep software and online option assists millions of U.S. taxpayers in filing accurate tax returns at their convenience and for a low cost. But before you do anything, first you must decide whether self-preparation is appropriate for your own situation. 

Should I pay a tax expert for help?

Generally speaking, if you’re divorced, own a primary or side business or have significant investment assets, you most likely should employ a professional firm or Certified Public Accountant (CPA) to prepare your taxes for you.

If your situation is relatively simple—meaning you have a salaried job that reports withholding in a standard W-2, and perhaps you have some interest and dividend income and standard tax relief deductions, such as the classroom supplies deduction for educators—then doing your own taxes can be the easiest, most economical choice. Your Form 1040 ideally shouldn’t go beyond Schedule A (for itemized deductions) and Schedule B (for investment income).

Which tax preparation software is best for me?

With so many tax prep software and online tax preparation program options out there, figuring out which one to use can seem almost as complicated as deciphering the tax law.

Software that’s installed on a desktop computer has its advantages, namely in data security and storage. Online programs provide more flexibility because they can be accessed anywhere there’s an Internet connection, and updates are performed automatically.

Most tax-prep programs will import data from previous returns, and some will import data from other software programs. As far as user interface goes, some offer a very basic setup, meaning you’ll fill in the numbers in empty fields. Other programs (usually the more expensive ones) will lead you through the task by asking you questions to help you complete your return.

When it comes to filing your tax forms, most programs allow you to e-file a simple (e.g., 1040EZ) federal tax return for free. Some include both the federal return and state return for the same price, while others charge filers extra for a state return.

We’ve compared a sampling of 11 online- and software-based tax preparation programs¹ (listed alphabetically below) at various price points to show the wide range of options available to taxpayers. Most of these companies have multiple levels of online tax prep offerings, including free versions for simple returns, to fit just about any need.

As an NEA member, you can find special discounts and cash-back offers on tax software and services, such as TurboTax, H&R Block and more, through NEA Discount Marketplace. Look under the “Office Supplies” filter, then click on “Finance & Tax Prep” to find available offers. 

Quick comparison of 11 tax preparation software options

TechMedia Network, a technology and science media company, evaluated many of the tax preparation programs in this chart and rated them according to use. FreeTaxUSA was rated best for free-to-use software. TurboTax was rated the best tax software overall: The free version is good only for basic returns, while the Deluxe Edition has tools to maximize tax credits, and an even more expensive version helps self-employed and small-business owners find industry-specific deductions. H&R Block was rated highly for its vast pool of tax experts.

The Internal Revenue Service (IRS) has partnered with many companies to provide free web-based tax preparation services (the IRS Free File Program), but only if the taxpayer’s adjusted gross income is $72,000 or below (individual or joint filings). Read more about ways you might be able to file your taxes for free.

Be sure to apply to free tax services only through the IRS website as scammers pretending to be members of the Free File Alliance may offer their “services” directly. Visit the IRS website for more information.

Given the upsurge in ID theft on tax returns, the IRS has made using a special identity protection (IP) PIN number or entering your adjusted gross income from the previous year mandatory.

¹ As of 1/30/23. Other fees may apply depending on your tax situation. Check each product’s website for the most up-to-date pricing information and current promotions.
² eSmart Tax is a division of Liberty Tax Service.
NOTE: All of the information in this article is accurate as of January 30, 2023.