Wednesday, February 8, 2012

Comparison of Popular Online Tax Software

Tax season is here: it’s a phrase that few Americans welcome with any joy. Tax-paying Americans must submit their federal tax returns to the IRS by April 15 (for this year, the deadline is April 17, 2012), and many of us are looking at the approaching deadline with understandable anxiety. But the days of mailing multiple paper tax forms to the federal government are long gone with the advent of online tax filing (or e-filing) software programs affiliated with the IRS. Most of these online tax filing software programs offer to file your taxes with the federal government for free or a nominal fee, and the process to file with them is undoubtedly faster and cheaper than doing so the old fashioned way. And when you e-file your tax returns, you almost certainly receive your tax refund (if you received any) at a faster rate than had you filed via paper mail. The only problem is that there are so many e-filing sites; it’s hard to determine which one is the best fit for you. I have offered a brief overview of 5 of the biggest e-filing sites.

TurboTax has long held a position as the most popular e-filing site for American taxpayers. They offer a free version of their services to individuals with relatively simple tax returns (no children, one job, no investments, etc.) and they charge a small fee (starting at $19.95) for more comprehensive returns. TurboTax would be a good place to start for people completely unfamiliar with e-filing because the website allows users to nearly complete an entire form before asking you to submit a username and profile with the service. So you can essentially go through TurboTax’s entire e-filing process and estimate your tax refund or before officially signing up with the service. The site also has an extensive customer service team reachable online or via phone to help you through any concerns with the program or your taxes should you have them.

There are few drawbacks to using Turbo Tax because the service is so well established in the e-filing industry. Users have complained about a slower-than-advertised refunding process, but that may be due to the high volume of returns that the site processes during tax season. All in all TurboTax is an ideal site for people with simple to moderately complex tax returns.

H&R Block
H&R Block is the e-filing service often mentioned in comparison with TurboTax. H&R Block also boasts a large following of users who have filed with them for years, and they have a great track record for providing people with quick and accurate returns. The H&R Block At Home website has an easy to understand, no-frills interface that’s perfect for people unfamiliar with e-filing their tax returns. The site asks you a series of questions like "Do you own a home?" or "Are you a dependent?"  to help determine what tax forms you need to fill out in an effort to streamline the process. The website also offers free filing for users with easy tax returns.

H&R Block also has physical locations, something that none of the other e-filing websites can claim. So if you have concerned about your tax return or if you want to work out some detail about your taxes before you e-file, you can speak to a representative about it in person at an H&R Block location. H&R Block would be the wise choice for people faced with a more complicated tax return than the average person. Some sources even say that it’s better for big-time investors who want to save on their returns.

TaxACT is a third consideration beyond the previous two, offering the same free e-filing service that savvy taxpayers have come to expect from online tax filing software. TaxACT software in particular is known for its aptitude in determining small errors and irregularities in tax returns. Think of TaxACT as the quiet champion of the e-filing system: while everybody knows about TurboTax and H&R Block, it seems like those who know about the benefits of TaxACT keep it to themselves, as if guarding a well-kept secret. TaxACT will also e-file the tax returns of small businesses, making it a tempting proposition for entrepreneurs who don’t want to hire an accountant to handle their taxes.

CompleteTax has more free e-filing plans available than the previous three sites, and allows users to import their previous tax documents for free, even if the documents were filed through other e-filing sites. The site might seem a little dated when compared to those of its competitors, but don’t let looks deceive you. The team at CompleteTax is dedicated to giving their customers the best e-filing service possible, and they do so by guaranteeing that they will offer the best tax refund of any service. They also offer a guarantee that the information filed on your electronic tax return will be submitted to the IRS with complete accuracy. Not bad for a small scale service.  Drawbacks to CompleteTax include a dearth of options for small business taxes and a support center that only takes requests via email.

As the name suggests, FreeTaxUSA offers a completely free experience to users submitting their tax returns electronically (although they charge $9.95 for state tax returns). The site boasts that it has submitted over 7 million tax returns since its inception, and it also claims to be among the fastest e-filing services available. While the service is reliable, it seems like the outfit is better suited for people with uncomplicated tax returns. I assume they also get a good deal of business from people who decided to look for other e-filing options beyond the big 3 companies. Like CompleteTax, FreeTaxUSA allows the user to import previous tax documents from prior e-filing services at no extra charge. The customer support for TaxFreeUSA can only be reached via email after you’ve logged into the service, so make sure you already have an account if you intend on asking any questions.

About the Guest Author
This is a guest post by Eliza Morgan who is a full time blogger.  She specializes in writing about business credit cards. You can reach her at: elizamorgan856 at gmail dot com. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

Note to Commenters: If you represent a company such as Intuit, H&R Block, TaxACT, CompleteTax, FreeTaxUSA, Microsoft, etc., please leave your contact information or send pfstock an Email (the Email address is listed in the sidebar) to let me know that you left a comment. If I cannot determine that your comment is authentic, it will be deleted.

1 comment:

  1. This blog is very helpful to anyone that reads it. Impressive topics and always insightful. Great job and keep up the good work!

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