Which Tax Preparation Software Should You Use?

by Scott Sery on February 15, 2013

It’s that time of year again.  Where we frantically dig through our files trying to drum up all the paperwork we need to do our taxes.  For those who are well organized, it can actually be a relaxing time to record all their earnings and losses for the past year.  But for most of us, it is a time where we consider going to a CPA and doling out hundreds of dollars to have them sort through our financial lives.  Since the idea of paying someone that much for work we can do ourselves, most frugal people use one of the three top tax preparation softwares in hopes of saving themselves some money and earn the highest possible IRS tax refund.  Each one offers something a little different, and you might be surprised how little it actually costs to do your taxes.


TurboTax is the largest, most popular, at home software with which you can do your taxes.  The very basic edition is free to use, and it can all be done online.  If you just have a couple of W2’s and are not itemizing your deductions, you can do your taxes, including e-filing your federal return all online without downloading or buying the software.  For those who have a little bit more complex of a return, such as those who have a mortgage, children, freelancing incomes, rental properties, or one of many other different sources of income, TurboTax offers different levels depending on complexity.  You don’t have to worry about buying the wrong one, since at any point the program realizes that your return is more complex than the software you purchased, you will be given the option to upgrade.  Regardless of which one you buy, you will be able to do your free federal e-file and you can either pay $19.99 to e-file your state return, or you can print it and mail it in for free.

Sign up and Use TurboTax


Rapidly gaining popularity, in part because it is the cheapest tax preparation software out there, is TaxAct.  Just like TurboTax, you can do your full return online, or you can buy the software.  The basic federal edition is free, but the real savings are when you have a more complex return.  You can do a more complex return online, and get both federal and state e-filing for just $17.95.  This is compared to the minimum of $19.99 just for the state e-file from TurboTax.  The reason TaxAct is so cheap is that their software is still a little clunky.  They simply haven’t had as much time to perfect and fine tune what they do.  But if you have a simple return, why not save as much money as possible and use TaxAct?

Sign up and use TaxAct

H&R Block at Home

Like the other two softwares, H&R Block at Home offers free online federal e-files for simple returns (state e-files will run $19.95).  The software, which has varying levels of complexity depending on the individual’s situation, is usually easy to use.  However, there are often complaints that when mistakes are made, and they are usually detected by the software, it is often unclear how to fix the problems.  From personal experience with TurboTax vs. H&R Block, I have found the TurboTax to be much more intuitive.  There may be a reason it is a little more difficult to use; the company might want people to give up and come pay someone to prepare their return instead.

Sign up and Use H&R Block

There really is no reason to pay hundreds of dollars to have your taxes done.  In fact, if you have a simple return, there is no reason to pay anything at all.  Having a CPA or other expert (i.e. someone with an llm in taxation) professionally prepare your taxes will usually only get you is audit protection.  This can be important if you have a large return, and if it is that important TurboTax offers audit protection for a small fee.  While there will still be millions of people paying a professional, you can save yourself a considerable amount of money by selecting the proper tier from any of the three major do-it-yourself tax software providers.  Spending a couple hours on any of the programs (they are all roughly the same price and they all do roughly the same job) will help you to get the largest refund possible.

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Scott Sery

Scott Sery is a native to Billings, Montana. Within an hour in nearly any direction he can be found fishing, hunting, backpacking, caving, and rock or ice climbing. With an extensive knowledge of the finance and insurance world, Scott loves to write personal finance articles. When not talking money, he enjoys passing on his knowledge of the back country, or how to live sustainably. You can learn more about Scott on his website Sery Content Development
  • John S @ Frugal Rules

    I used to use H & R Block’s software and it would get buggy at times, but nothing too prohibitive for me. We actually moved to using a CPA last year as it became too much for me with running our business. It saves me time and I can have the confidence they’re done right.

    • Using a CPA just makes sense for me now. For the money I spend it’s worth saving the few hours of stress in my life 🙂

  • Jason @ WorkSaveLive

    This will be the first year that I hire a CPA to help me with my taxes (I actually meet with him on Monday) but for the past 4-5 years I’ve used TurboTax. It’s hard to switch once you are used to a software system and I only have great things to say about TT!

    • I agree Jason. Before I started running a business I used Turbo Tax. My taxes are a little too tough for me to do now so I hire them done.

  • thisthatand themba

    I am using turbo tax this year as I have for the past 3 years. One of the nice things about working in accounting is you have other accountants to bounce questions off of for tax purposes. I have about 5 returns for family and friends that I will be doing this year.

    • Even when I had a basic tax return to file each year I hated doing it. Turbo Tax did help ease the pain a little though.

  • I am an avid Turbotax user. I have been rocking that software for the past 7 years. I know how to use it and I like how easy it is. Turbotax all the way.

  • I’ve been a happy TurboTax user for about 4 years now. I especially like that it copies my return from year to year.

  • We are hoping to do our own taxes this year but are not sure what route we will take although we’ve read some good reviews on Turbo Tax.

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