But the right tax software can make your federal and state tax returns surprisingly simple and ensure you take advantage of the new money-saving opportunities available to you.
Here are four of the top tax providers available today and their key features. Keep in mind that these are the full retail prices; many providers offer discounts for people who file early.
Pricing: Free to $200 for federal; free to $55 for state; $80 to $255 for tax pro review.
TurboTax may not be the cheapest option on this list, but if your return is complicated — if, for example, you’re self-employed — you'll find it's worth the price.
TurboTax’s free edition comes with an “Audit Support Guarantee” offering free guidance in the event you're audited.
In the wake of the pandemic, TurboTax’s free edition now supports unemployment income, Earned Income Tax Credits, Child Tax Credits and Recovery Rebate Credits for anyone who didn’t receive their first stimulus check.
The free edition also comes with a complimentary expert review for both federal and state returns, as long as you file before Feb. 15.
The Deluxe and Premier editions of TurboTax line up your personal information to more than 350 tax deductions to see whether you’re eligible and can also examine your bank account to identify potentially tax-deductible expenditures you may have missed.
Note that TurboTax's paid editions do not come with a free state return; state returns cost an additional $55.
TurboTax Self-Employed offers the same features as Premier, plus home office deduction support and extra deduction help for freelancers and independent contractors.
For an additional cost, you can opt to file with TurboTax Live. A licensed pro will review your return before you file to make sure you haven’t missed any possible credits or deductions. They’ll also provide you with unlimited live tax advice to make the whole filing process a snap.
More: Experience best-in-class customer service when filing with TurboTax.
2. H&R Block
Pricing: Free to $109.99 for federal; free to $36.99 for state; personalized prices starting at $69 for tax pro review.
H&R Block has been around for more than 50 years and has a reputation as one of the most trusted tax preparers in the United States — and its tax software lives up to the hype.
Like many of its competitors, H&R Block’s free tax software will let you file your Form 1040 and help you take advantage of several common tax breaks. It also allows you to file schedules 1, 2 and 3, which cover more complex issues like business income, alimony and various deductions and credits.
Similar to TurboTax, H&R Block has responded to COVID-19 by expanding its free version to support unemployment income and a variety of tax credits. And the free edition now supports student loan interest and educational expenses.
Although H&R Block's paid online versions require an extra fee for state returns, the downloadable versions of the Deluxe + State, Premium and Premium & Business programs all include a free state return with your federal return.
Each version of H&R Block’s tax software provides an intuitive help menu to guide users through the preparation process.
You also can pay a bit more to have an expert review your return, either online or in person at one of H&R Block’s thousands of physical locations.
The cost to work with an H&R Block tax pro depends on your needs, but plans start at $69 for federal returns, with an added $59 charge for each state return you file.
More: For multiplatform flexibility, file your taxes with H&R Block.
Pricing: Free to $64.95 for federal; $4.95 to $44.95 for state; $35 to $139.95 for tax pro review.
Although TaxAct may not have the same brand recognition as some of its competitors, it offers comparable features at lower-than-average prices.
The free edition includes a federal return and allows you to import data from previous returns filed through TurboTax or H&R Block. Although state returns are not included in TaxAct’s free version, they are offered at a substantial discount: $4.95 for each state.
Like the other providers mentioned above, TaxAct’s free version includes support for Earned Income Tax Credits, Child Tax Credits and Recovery Rebate Credits. However, TaxAct does not currently offer support for unemployment income.
In terms of functionality, TaxAct comes with the same standard options as many of its competitors, as well as several useful calculators and planning tools to help identify and compensate for any potential changes in your tax situation.
Paid editions of TaxAct online do not include state returns; those will run you $44.95 each. However, TaxAct’s downloadable versions — with the exception of Basic — do come with one free state return.
This year TaxAct is introducing a new feature called Xpert Help, which provides unlimited one-on-one support from a tax expert. Pricing for Xpert Help ranges from $35 for TaxAct's free edition to $139.95 for self-employed filers.
More: On a budget? Then you can't go wrong filing with TaxAct.
4. Credit Karma Tax
The newest tax software provider on this list, Credit Karma is quickly making a name for itself among people looking to file for free — both for federal and state returns.
What’s great about Credit Karma is that its free filing services aren’t just limited to simple returns. Credit Karma Tax can handle all major IRS schedules and forms, even those that are more complicated than average.
If you’re filing a simple Form W-2, the process couldn’t be easier; just snap a photo of your W-2 and your tax info will automatically be added to the correct fields on your return.
Credit Karma will also let you import your returns from previous years even if they were completed using one of its competitors.
To top it all off, Credit Karma will reimburse you with up to $100 in gift cards if you find that you can get a bigger refund with one of its competitors, and it will provide free consultation, document review and assistance if you get audited.
The main downside to Credit Karma Tax is that it doesn't offer the chance to have a tax pro review your return before you send it off. If your taxes will be more complicated than usual this year and you think you'll need expert advice, you may want to stick with one of the paid options mentioned above.
Online vs. download
Most of the providers listed above offer both online and downloadable versions of their tax software.
Although both versions contain similar features, the downloadable options tend to be a bit pricier because they come with multiple federal e-files — usually around five.
These e-files are only valid for one tax year but can be used by multiple people, so if your household will be filing more than one federal return it may be worth buying the downloadable version.
On the other hand, if you’re filing just a single return, the cheaper online option is likely your best bet.
Regardless of which provider you go with, it’s important to remember that price points for most tax software tend to increase as the deadline grows nearer.
So if you want to save some money — not to mention stress — file your taxes early this year to take advantage of discounted early bird rates.