When shopping for a new tax software, it’s important to prioritize accuracy, ease of use and security, along with price and the overall alignment of the software and its features with your needs.
Accuracy
Admittedly, it can be difficult to assess the accuracy of a tax software before you input your tax information and see the final refund or tax liability amount. Even then, how can you be sure the number is correct?
An easy first step is to read the reviews and feedback of previous customers. Another option is to check what guarantees are offered by specific tax companies. All of the tax software companies in our review include a guarantee that covers the accuracy of its calculations and one that assures you’re getting the largest refund or smallest tax liability. If your tax return is flagged as being incorrect and the issue is due to an error on the tax software’s part, the company will typically cover any incurred penalties and fees.
If you run your information through a second tax software product and find your refund amount is larger or liability smaller than it was from the tax software you paid for, you can request a refund from your tax company. The refund amount depends on the individual company’s policies, however.
Ease of Use
Another factor to consider when choosing a tax software is ease of use. You want the software you choose – whether that be an online computer software, a tax software run on a mobile app or a desktop download – to have an intuitive interface and a guided step-by-step process. Tax software exists to help you file taxes, so it shouldn’t pose a significant learning curve and add unnecessary confusion.
However, ease of use can also be difficult to judge before creating an account and starting your tax-prep process. We recommend reviewing the feedback left online by current and previous users of your preferred tax software, looking specifically for their experiences with the interface as well as with customer support. If you have any questions when using the software, you’ll want to make sure you have a helpful representative on hand to assist.
If you plan to complete your taxes on your mobile phone or tablet, screenshots are often available on the Apple App and Google Play stores so you can see a preview of the main screens.
Features
While price is an important consideration, make sure you have the features and help you think you’ll need, especially if you have a more complex tax situation.
“If you’re a W-2 employee with some student loan interest and a standard deduction, most software will get you there just fine,” said Christopher Johns, an IRS Enrolled Agent and founder of Spark Tax Advisors. “But if you’ve got a side hustle, rental property, stock options or anything that makes you think ‘hmm, is this deductible?’ – that’s where software can get dicey.”
Review tax software plans’ advertised feature sets before you choose one to start your tax preparation. Check which forms and schedules the tax plan supports and will allow you to file. If you value professional support throughout the process, many tax software options, like TurboTax and TaxAct, offer online personalized tax advice or even full-service digital preparation.
I worked with a particular content creator last year. He used a major online tax prep software. When he got done, the software told him he owed $9,000. While he still owed about $2,000, this was a far cry from where he started. He also had no idea he needed to be making estimated quarterly payments.
– Christopher Johns, IRS Enrolled Agent and founder of Spark Tax Advisors
You’ll want to ensure that the software you choose supports your tax situation. Johns gave the following examples: “If you are a 1099 contractor, make sure [your tax software] has robust Schedule C support. If you’re an investor, you’ll want something that handles capital gains without making you want to throw your laptop at the wall.”
Data Security and Privacy
Make sure the tax software you choose has embedded safety features, like multi-factor authentication, data encryption and automated account alerts to track sign-ins.
You can also limit the permissions allowed for your tax software, which is especially important if filing on your mobile phone. Consider switching off permission for the mobile tax app to view all the images on your phone, for example.
