If you don't know what you need, it might help to examine online tax filing providers individually and what sort of services each one offers. Here are a few areas to dig into:
Pricing and fees: How much you pay for tax software is often a function of how complex your taxes are or how much help you need. People with fairly simple situations — such as W-2 income only and very few credits to claim — may be able to take advantage of the "free version" many commercial programs offer. Though, state returns many not always be included in these offers. Outside of this, the IRS and other state tax departments also offer free tax filing services, such as Direct File and Free File.
If you need to itemize, have a lot of investment income, freelance or are self-employed, you'll need access to more complicated forms, which often means paying for higher-tiered tax prep packages that offer more support and tools. Some packages also come with paid upgrades or separate products that give you access to a tax pro — such as a CPA or an enrolled agent — who can collaborate with you on a return. These add-ons will typically up your total, but people who want to DIY with just a little support might find it worth the price.
🤓Nerdy Tip
If your adjusted gross income for 2023 was $79,000 or less, you might be able to get free tax software from some of these providers through the IRS' Free File program. Plus, there are a few more options for free tax filing.
User experience: Software that feels like an interview — asking questions about your income and any life events that might allow for deductions — offers more guidance than a basic fill-in-the-blank process. The ability to import forms such as W-2s is better than having to manually type in numbers.
Support options: Most tax software offers a searchable FAQ section or knowledge base, and some offer video tutorials or user forums to help answer questions. Audits are unlikely for most taxpayers, but if you think you’re at risk and want to purchase protection, you should understand what your software provides.
Tax pros for assisted help: One important offering in recent years has been one-on-one help from a human tax pro, live on your screen. Depending on the provider, these pros might be able to give you tax advice or review your whole tax return before you file. (This sort of help may come with an extra charge.)
Customer service: Even with the best tax software programs, there's a chance you might run into a technical issue or need some help as you move along the filing process. If this is important to you, make sure to take a close look at what customer help options are available to you — phone, email, chat or video call — and hours of availability.
Availability of tax forms: If you find a provider that excels in the areas above, you then want to choose the package that covers all of the tax forms and schedules you need. People with simple tax situations may not need anything but a package that covers your basic Form 1040. On the other hand, people with multiple jobs, itemizers, and those with business, investing or rental income will typically need access to additional schedules and forms, which can mean paying for a higher-tiered package.
