DIY Income Tax Return: Top 4 Tax Preparation Software Options for 2018

tax preparation software
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It’s that time of the year again. Do you do your tax return? I still remember those times when tax software is only available for tax professionals. In fact, I attended tax classes at both H&R Block and Jackson Hewitt and was impressed with both of their tax preparation software.

Unless you have an extremely simple income tax return, having a pro to handle filling out and filing the return typically runs an average of $275 but could go as high and $500-$600 if you are self-employed or have investments.

If you’d rather keep that money in your pocket, you can begin by identifying what your tax priorities and needs are and then look for the right software that will address those needs.

Aside from the tax preparation software that I will discuss here, you may also want to check out https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free. If your income tax return is pretty basic and not complicated, you may find that the free filing options from this IRS website are all you need.

While some tax preparation software can be a little pricey, they are usually less expensive than paying a professional to do the work for you. And, all of the options I talk about below offer basic services for free. To help your search go more smoothly, here is a list of the best four tax software options for 2018.

TurboTax

TurboTax is unquestionably the first name in tax preparation software, and it is priced accordingly. How much you spend is based on what requirements your return has.

I have been using Turbo Tax for many years now. I’ve gotten so used to it that I did not want to touch another tax program.  They also have a free version if your return is basic enough and only need a Form 1040EZ or even a Form 1040A.

Once you move past those, you will be charged according to how much needs to be done. Tasks like itemization and forms for self-employment will drive the final total up, just like they would in a pro’s office. More than likely you’ll still probably pay less than having a professional do the work for you.

While probably the most expensive option available, pros and amateurs alike believe it is well worth the investment. From the import of employer tax ID’s to the ease of the user interface, the overall experience is highly rated and recommended by its users. Some of its features include:

  • The ability to take pics of your W-2’s and 1099 forms instead of typing everything in, making the possibility of incorrect input much smaller.
  • The Expense Finder is helpful if you are self-employed and need to file a Schedule C. This feature will actually take possible tax-deductible expenses directly from your bank records and sort them into categories. Then it adds them up and inputs them.
  • The process guides you through the return just as a pro would with the same questions
  • If you run into difficulty, the online version of TurboTax is complete with experts you can chat.

You can buy the TurboTax software here, or you can file your return on their website. Like the others, State returns cost extra to file.

H&R Block

H&R Block has a friendly interface. It asks questions to helps you decipher the best answer that will make your return as accurate as possible. Be prepared though, H&R Block may not always be quite as efficient at finding your answers as some other options, like Turbo Tax. However, there is an extensive help section and unlimited live chat available from professional tax advisors from the website.

H&R Block even provides a free version that’s more accommodating to slightly complicated tax requirements that TurboTax’s free version.

Additional options let you pay to have a pro review your finished return before you file the return. If you discover you need more help or find you the number of schedules required demands official help from a pro, you can save the files from your purchased software and make a free appointment at any of the offices in your area.

When it comes to receiving professional advice or having a pro finish off your return for your, H&R block is the best option around. You can buy the H&R Block software here or file your return online at H&Rblock.com.

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Jackson Hewitt

Jackson Hewitt has an available tax software that costs a little less than what versions like Turbo Tax and H&R block provide. You’ll still receive a very efficient wizard with an extensive interface for the money.

The built-in wizard feature will walk you through a number of questions then provides a complete return based on your answers. The Jackson Hewitt wizard goes over practically every possible tax situation for personal tax returns.

Jackson Hewitt’s premium version will handle complicated tax items but doesn’t provide explanations of all the how’s and why’s of each item. There are help topics available via internal links, though, as well as live support. Something you shouldn’t expect with Jackson Hewitt’s software is the level of user experience you get from some of the other options.

Reviewers have stated that the interface can be a little difficult to read at times and the efficiency isn’t completely reliable. Still, after H&R Block and Turbo Tax, it’s a very viable option that won’t cost you quite as much to utilize.

Jackson Hewitt has provided several levels of service based on your individual needs. Besides the free version; there is a basic option, a deluxe option, and a premium option, all for less than the other software.

If you need to file a State Return, that will be extra except for the free edition, but they give you a $20 Walmart gift card as a bonus. If you want to use their online tax preparation system, you can go their website JacksonHewitt.com

TaxAct

TaxAct was originally a basic free program called Personal TaxEdge. TaxAct is often compared in quality to H&R Block and TurboTax. It has one extra benefit that makes it stand out amongst other tax preparation software, that being it is very cheap and provides a price lock. The Online Premium program will cost less than $50, and a free version is still offered if you only need to file a 1040EZ or 1040A.

So, what does the “price lock” mean exactly? Most tax software packages will let you start your return early in the year. But, they also begin raising their rates the closer you get to the deadline for filing.

With TaxAct you’ll pay the same rate even if it takes you awhile to finish all your inputting and file your return. 

They offer fewer additions like excessive descriptions, but it can even handle returns for more complicated tax requirements like self-employment and investment income sourcesIt also has an enormously thorough Guidance Center. 

Its Life Events feature focusses on potential changes from the previous year to the current one. These may include:

  • Buying a House
  • Selling a House
  • Getting Married
  • Having a Baby
  • Losing a Job

Whatever the situation, you’ll be able to access additional advice and tips on how you’ll need to input the info.

Live support is also available with TaxAct and hyperlinks will provide even more info.

One thing to note, it isn’t as useful for State returns. Users’ comments on the State return section say that it isn’t as easy to follow. But, if you live in a state that doesn’t require returns, you won’t need to worry about that area. Go to TaxAct.com to file your income tax return online.

It’s Easier Now Than Ever Before

If you aren’t sure what direction you want to go when choosing a tax preparation software package, a good idea would be to take a look at last year’s return. You’ll be able to see what forms and tasks had to be completed. That means you’ll have a better idea of what you’ll need to be done this year, and be able to choose the best option for your needs.

These days, doing your taxes yourself is a breeze compared to what if was even 25 years ago. Each one of the tax preparation software I mentioned above is user friendly. Thanks to the digital age, you can essentially have your tax professional at your back and call, without leaving the comfort of your own home. Gone are the days when I have to visit the Post Office to file my tax return and make sure it’s postmarked on time.

What about you? Do you still mail your tax return? I would suggest that you start doing your taxes and see for yourself. It’s a very small investment, and the knowledge you will gain is really worth the price and the experience.

BA in Accountancy, he entered the entrepreneurial world by starting his first online marketing business in 2004. Passionate about personal finance, the stock market and a digital marketing addict. I also love to read books on entrepreneurship and technology and always on the lookout for new opportunities. I'm an avid golfer and currently a 15 handicapper.

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