Finance

A Guide to Purchasing Tax Software for your Business

Purchasing Tax Software for your Business

It’s recommended that you start with the free edition of Turbotax Federal because it’s the easiest to use, though any of our top picks can actually get the job done.

The following are the top 5 Best Online Tax Software Services for 2018:

  • TurboTax Federal Free Edition
  • eSmart Tax
  • H&R Block Free Federal Edition
  • TaxSlayer Free Federal Edition
  • TaxAct Free Federal Edition

There are several features and perks that come with these top five tax software provider, but when it comes to e-filing, it’s generally a level playing field. Each one of them provides free filing for forms 1040A and 1040EZ, and that’s pretty much it. Luckily, this makes the selection process easier – choose the software that’s the easiest to use.

Purchasing Tax Software for your Business

In that case, to find the best free tax software, we took each offering for a test drive, assessing the customer support features, and what each did to make the filing process less frustrating.

Why is TurboTax the Best Online Free Tax Software?

The most important thing that a free online tax software should do is making you feel totally confident about making your returns. This is the main reason why TurboTax by Intuit is our top pick. For the regular W-2 worker, you can actually prepare your returns without paying a penny and feel good about the process. The step-by-step instructions on the TurboTax software are easy-to-understand and quite unparalleled, even on the mobile app. It’s actually just easy to file a 1040A or 1040EZ from a smartphone or mobile device – which according to Intuit, about 6 million people did so last year.

Once you take a snapshot of your W-2, or import it from the bevy of payroll partners on TurboTax, the software will prompt you with a number of questions throughout the filing process to help in homing in on any changes that could make major waves in filing your taxes. The software also comes with a real time refund ticker and audit risk detection, and also gives you access to free live advice via live chat or help from an expert. With the paid version, you can take advantage of their SmartLook™ feature, which lets you schedule one-way video chats with enrolled agents or live CPAs. Such minor but helpful details add up to make Intuit’s TurboTax the industry standard when it comes to free online tax software.

And thanks to their Free Edition software, anyone who wants to file their 1040EZ or 1040A return qualifies for the Federal Free Edition (their free online version). It’s specifically meant for someone:

  • Whose income is less than $100,000
  • Who doesn’t have a sizeable amount of medical bills to deduct
  • Who doesn’t own a rental property or a home
  • Who doesn’t claim any investment, rental, business, or 1099-MISC income

In case you don’t meet this criteria, you’ll have to navigate several price tiers and add-ons of the software. This is a key disadvantage of TurboTax – non-transparent pricing structure. To learn more about the best tax software for complicated returns, be sure to check out our comprehensive guide on paid editions.

If you’re looking for help solely with VAT then a software package or service such as VATGlobal could be ideal.

H&R Block

H&R Block tries to make life easier for any self-preparers by providing free support via email, phone, and more importantly, face-to-face consultation at any of their 12,000 branch locations – even for those who are on their robust free tier.

H&R Block now lets you file both state and federal returns for free. It’s also a good choice for those who own a home or are paying student loans because their free edition edges TurboTax by supporting a little more forms, including the standard 1040, and itemized deductions like student loans and mortgage interest.

Albeit the incredible customer support, we found TurboTax’s software more streamlined and a bit more valuable than the access to a professional personal agent. That because we assume that since you’re using a free tax software option, you’re most likely filing a 1040A or 1040EZ, and these are quite easy to prepare. Nonetheless, if you own a home, have other itemized deductions, or you’re attempting a DIY tax prep for the first time, be rest assured that H&R Block won’t let you down.

eSmart Tax

The free edition of eSmart Tax allows you to file the basic federal returns – the 1040EZ – for free. Filing a state return will cost you $30. It does offer free tech support via online live chat, and free audit support from a Liberty Tax CPA, which is an extra bonus that you won’t get from other free tax software. The program also allows you to import your tax returns of the previous year from competitors like H&R Block and TurboTax for free, which can help get you going as if you’ve always been an eSmart TaX customers for years. Aside from that, there’s nothing much to write home about, which is the reason why eSmart Tax is third on the list.

TaxAct Online Income Tax Software

TaxAct makes it to fourth place because it’s more of a lightweight version of the competitor offerings. It comes with free tax guides, email support, and resources to assist you in filing your taxes along the way. However, it’s not as robust as the other top picks.

However, one of the biggest benefits of TaxAct has nothing to do with its free version. In case your tax returns actually require more than a simple filing, TaxAct is one of the cheapest full-service tax program on the market. Their Freelancer Edition ideally covers all forms and schedules necessary for investors, freelancers, and the self-employed, and will only cost you $82 for both federal and state filings. The comparable offering from TurboTax will cost you nearly twice (about $140 to $160).

Unfortunately, they no longer provide a free desktop version of the basic edition. However, at only $15, it’s one of the cheapest software to download by far; considering TurboTax most basic software costs $40 and H&R Block $30. As such, if you prefer preparing taxes on your own and store your data locally, your cheapest option is TaxAct. The catch is that it costs $37 to prepare state returns on their desktop version. Of course, this isn’t a problem if your state doesn’t have income tax.

TaxSlayer Free Federal Edition

TaxSlayer is a great alternative to any of the products on this list. Just like the competition, TaxSlayer provides you with step-by-step instructions, a comprehensive deduction guide, along with free phone and email support and a guarantee for a maximum refund.

Its free edition supports the basic 1040EZ returns, like all the companies listed above. The only thing that holds TaxSlayer back is its lack of audit assistance or detection, which is included in TurboTax.

Start with the Free Version if You’re Still Unsure

Although we’ve mentioned this a few times already, it’s should be crystal clear that it’s almost always advisable to start with the free version of the tax software. In case you’re filing taxes for the first time, you’re probably in the dark with regards to how complex your taxes will be. You’re probably imagining a nightmare of forms, numbers, and frustrations awaiting you. However, if you work a typical 9-to-5 job, your tax returns might be a lot simpler than you’d expect.

Every one of these tax software provides you with a comprehensive free tier, which should get you started, and in most cases, be enough to get you through the tax season. If not, the reputable tax platforms such as TurboTax let you upgrade to a level that covers your tax needs without the need to start all over again.

The tax season is often a stressful time of the year, and you don’t need to make it more of a headache than it already is. If you just need straightforward tax returns, you can save yourself some time, cash, and stress be filing those federal taxes free of charge.

About the author

Deepak

After working as digital marketing consultant for 4 years Deepak decided to leave and start his own Business. To know more about Deepak, find him on Facebook, Google+, LinkedIn now.

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