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If you paid a professional to prepare a basic 1040 individual tax return in 2019, you’re one of the millions of Americans who forked over an average of $203 for this type of help. That figure comes courtesy of the 2019 Tax Professional Fee Study from the National Association of Tax Professionals (NATP), which also states that the average hourly rate for tax preparation last year worked out to $138.
That’s a lot of money to pay for what should be a fairly simple task. The good news is that thanks to technology and the internet, you don’t have to pay a pro if you don’t want to. In addition to the traditional software programs, such as TurboTax, big tax preparation companies that provide in-person help now also offer their own software to help you file your taxes yourself. The best part? You can complete a basic or complex tax return yourself for a fraction of the price you would pay someone to do it for you. Heck, some programs even let you file basic returns for free.
The tax programs we’ve profiled below are considered the best options based on several factors. Almost all of the companies we included in our ranking include a free version you can use to file basic returns. They all offer affordable plans that are tiered based on the complexity of your return and the level of service you need.
We also included tax preparation software programs that come with benefits like audit support and live customer support. We know that filing taxes yourself becomes easier and less stressful when you have someone to reach out to for help.
The 6 Best Tax Preparation Software Companies of 2020
- H&R Block: Best Free Option
- TurboTax: Best Expert Help
- TaxAct: Best Free Option, Runner-Up
- TaxSlayer: Best Budget Option
- Liberty Tax: Best Value for the Self-Employed
- Jackson Hewitt: Best Virtual Tax Prep from Home
H&R Block: Best Free Option
If you have a basic tax return and want to file for free this year, H&R Block is your best option. The free version H&R Block works when you have a W-2, kids, and education costs, and it includes more forms for free than TurboTax, according to H&R Block. You can even snap a picture of your W-2 to get the process started, and you can access technical support via chat throughout the process.
If you have more complicated returns, H&R Block has you covered there, too. Paid plans with more features they’re offering in 2020 include:
- Deluxe Online (for homeowners, donations and HSAs): $29.99 + $36.99 per state filed
- Premium Online (for freelancers, contractors, and investors): $49.99 + $36.99 per state filed
- Self-Employed Online (for self-employed and small business): $79.99 + $36.99 per state filed
Interestingly, H&R Block also offers each of these programs with a feature called Online Assist for an extra cost. With this added benefit, you can file your taxes “with on-demand help from a tax expert, enrolled agent, or CPA.”
Regardless of which tax program you choose, H&R Block includes an array of features that make filing your taxes easier. These include the ability to import last year’s tax return even if you used another tax preparation software company, W-2 importing using your phone, technical support by phone or online, and upfront pricing.
Note that you can also purchase Worry-Free Audit support with their Free Online, Deluxe Online, Premium Online, and Self-Employed online programs. You’ll have in-person preparation and assistance in the event of an audit.
TurboTax: Best Expert Help
TurboTax offers a similar selection of online tax preparation plans as H&R Block, although they are slightly more expensive. Where TurboTax really shines, however, is in their live CPA add-on, which lets you pay an added fee to have a CPA or other tax professional look over your return before you file. Your designated tax professional will also be on hand to answer your questions throughout the process, and you can get unlimited tax advice through this program all year long during the year after you pay for the service.
Prices for TurboTax regular tax preparation software plans for 2020 are as follows:
- Free Edition: $0 federal and $0 state
- Deluxe Edition: $40 federal + $40 per state
- Premier: $70 + $40 per state
- Self-Employed: $90 + $40 per state
Prices for TurboTax tax preparation software plans with live CPA support for 2020 are as follows:
- Basic Edition: $50 federal + $40 per state
- Deluxe Edition: $90 federal + $50 per state
- Premier: $140 + $50 per state
- Self-Employed: $170 + $50 per state
According to TurboTax, their Deluxe Edition is the most popular program they offer. For just $40 for federal and an additional $40 paid per state tax return, you can make sure you get all the tax breaks available to you as a homeowner, maximize your charitable deductions, and get your maximum tax refund guaranteed.
TurboTax software options also use an intuitive question-and-answer format that lets you answer basic questions about your job, your income, and your life in order to gather most of the information you need to file. Also note that TurboTax offers free audit support from a tax pro in the event you face an audit. This means they’ll have a tax professional answer your questions and help you prepare for your meeting with the IRS, but it does not mean they will show up to your meeting to advocate on your behalf.
TaxAct: Best Free Option, Runner-Up
TaxAct is another popular tax preparation company that is offering affordable online filing options and a free option for 2020. Their free option in particular can be an especially good deal if you have a simple tax situation. You’ll be able to file both your federal and state tax returns for $0. With the free version, you’ll get help determining W-2 income, making the most of your dependents, importing your prior year’s tax returns, and unlimited account support.
TaxAct is offering four plans in total online for 2020 with varying costs and inclusions:
- Free: $0 federal + $0 state
- Deluxe+: $35 for federal + $39.95 per state
- Premier+: $50 for federal + $39.95 per state
- Self-Employed+: $80 for state + $49.95 per state
TaxAct’s most popular software option, Deluxe+, includes everything you get with the free version of the software along with help with itemized deductions, child and dependent care deductions, mortgage interest, real estate taxes, student loan interest, health savings accounts (HSAs), adoption credits, and phone support from a tax specialist.
All of TaxAct’s plans also come with a maximum refund guarantee, easy W-2 importing, free and unlimited support over the phone, email, or online chat, and the ability to import last year’s tax return. Each plan also comes with a 100k Accuracy Guarantee. If your tax return has errors, TaxAct will pay the difference to you in any amount up to $100,000.
TaxSlayer: Best Budget Option
TaxSlayer is easily the least expensive tax prep option for 2020 among major players in the industry, which is good news if you need a bare bones plan and support when you file your taxes this year. They do offer a free version that includes both a free federal and state return, yet their more robust plans hardly cost more than that.
In 2020, TaxSlayer’s online tax software options include:
- Simply Free: $0 for federal + $0 per state
- Classic: $17 for federal + $29 per state
- Premium: $37 for federal + $29 per state
- Self-Employed: $47 for federal + $29 per state
Why is TaxSlayer so inexpensive? I guess that depends on whom you ask. Each of their plans include similar features as those offered by their competitors, and TaxSlayer offers a guaranteed maximum refund and guaranteed accuracy to boot.
TaxSlayer believes their Classic plan is the best value and most applicable to the majority of people filing their taxes this year. For just $17 for a federal return and $29 per state return, you’ll get access to all the deductions you deserve regarding your dependents, homeownership status, retirement income, investments, and more. You can also import last year’s tax information as well as your W-2, and you’ll get IRS inquiry assistance included for one year after your tax return is accepted online.
If you want to upgrade to the Premium plan for another 20 bucks, however, you’ll get a few more perks including IRS inquiry assistance for up to three years, priority phone and email support, and live chat with unlimited assistance.
Liberty Tax: Best Value for the Self-Employed
Like other options available for 2020 tax prep, Liberty Tax offers a handful of tax prep solutions for filing your taxes online. Note, however, that Liberty Tax does not offer a free version for 2020, so they may not be your best option if you get paid by W-2 only and have a fairly simple tax situation.
Plans offered this year from Liberty Tax include:
- Basic: $44.95 for federal + $39.95 per state
- Deluxe: $44.95 for federal + $34.95 per state
- Premium: $44.95 for federal + $34.95 per state
You’ll notice that, at the moment, each of their online tax preparation plans costs the same amount for federal and a similar amount for state. For the most part, these plans differ on the types of tax forms you can file with each. Basic is mostly for people who file a Form 1040 and 8843, along with schedules A&B, and Deluxe and Premium versions are for individuals who have more complex returns that require a greater number of forms.
The top Premium version of this software is an especially good deal since it’s geared to self-employed individuals. It’s significantly less expensive than self-employed plans from competing tax prep companies. This plan is for self-employed individuals, small business owners, independent contractors, and freelancers, and it includes filing of Form 1040, 4562, 8829, 4136, 4684, 4835, 8839, and 8853, along with schedules A, B, C, E, F, and K-1.
All of Liberty’s tax prep products also include these important features: audit assistance, free return importing from competitors, a 100% accuracy guarantee, and support via chat or email, or even in-person at more than 3,000 locations nationwide.
Speaking of in-person help, Liberty even promises a seamless online to in-office transition if you start your own taxes online but determine you need expert help to finish your return. Not only that, but you can head to a Liberty location for a free double-check of your online return by a qualified tax professional.
Jackson Hewitt: Best Virtual Tax Prep from Home
Jackson Hewitt offers similar online filing plans as H&R Block, TurboTax, and others, but a new feature they offer for 2020 is helping them stand out from the pack this year. With their Tax Pro from Home program, you can have the best of both worlds.
You can upload all your tax information and answer basic tax questions online and without ever leaving your home. From there, a tax professional will complete your tax return for you on your behalf within 24 hours. If they don’t get your tax return finished within 24 hours of you submitting all the required information, then it’s free.
Pricing varies for this type of help based on the complexity of your return, but it’s still a good option to consider if you want someone else to do your taxes but you don’t want to meet with an accountant or visit a tax prep office in your precious free time.
Beyond virtual tax filing help, Jackson Hewitt also offers three plans that let you file your own taxes online in 2020:
- Free: $0 for federal + $0 per state
- Deluxe: $29.99 for federal + $36.99 per state
- Premier: $49.99 for federal + $36.99 per state
Note that you can only use the free version Jackson Hewitt offers if your taxable income is under $100,000. For the most part, you’ll pick a Jackson Hewitt software option based on the complexity of your return and how many forms you need to file. Where the Premier plan is mostly geared to self-employed individuals or tax filers with rental income, itemized deductions, and investment income, the Deluxe plan is best for families with children and other dependents, student loan interest, and retirement income.
Either way, all of Liberty’s plans this year come with step-by-step tax preparation assistance, unlimited online support, an accuracy guarantee, customer service assistance, and secure storage of your tax returns.
IRS Free File
The IRS offers what it calls Free File. For those with income below $69,000, the IRS provides links to tax software that you can use for free. Many of the tax prep options for Free File are those listed above. The IRS, however, does link to other tax preparation solutions. It also provides free fillable forms for those with incomes above $69,000, and a free lookup tool to help you choose the best free filing options given your specific financial circumstances.
The Bottom LineAs you compare tax preparation software options this year, make sure to figure out the level of service you need. You may be able to get by with a free version for your state and federal tax return if you receive W-2 income and don’t qualify for a lot of deductions and credits, but you’ll likely need to pay for a more robust plan if you have a complicated tax situation, you’re a homeowner, or you’re self-employed.
Either way, you’ll probably save money by filing your taxes online if your alternative is heading to a tax professional for in-person help. Fortunately, online tax preparation software has made filing your taxes easier than ever, and you don’t even have to leave the house.
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