Review: Best tax software for 2021 | Features
For the second year in a row, the income tax filing deadline has been delayed. This time, the IRS has postponed the due date to May 17. (The deadline in 2020 was extended from April to July.) And though that gives us an extra four weeks to get our paperwork into shape — rejoice — it’s a good idea to get started.
Especially because, for many, this year’s tax return will involve new complexities — and opportunities. Between unemployment insurance claims, stimulus check income and a pervasive shift to working from home, there are loads of new issues — all of which could have tax consequences — that could make this year’s filing process more complicated than previous years.
There are plenty of tax preparation software packages that will make the filing process easier. If you have a simple tax situation or earn less than $72,000 per year, you can file your taxes for free without a professional tax preparer.
But if your tax situation is more complicated, or you just want to make sure you’re not leaving any money on the table, there are a handful of capable, reasonably priced tax prep platforms that can help simplify what can be an overwhelming process.
Best tax software for live personal support: TurboTax by Intuit
CNET take: There’s something for all filers with TurboTax — the company offers a myriad of options for your tax return even if your tax situation is complicated. A bonus for tax filers who use Quickbooks software (hello, sole proprietors: You can connect it to TurboTax, useful for self-employed people or real estate investors).
And if your tax situation isn’t complicated (requiring lots of itemized deductions or advice on taxes, for instance) the user-friendly interface makes it simple to breeze through tax preparation and file your taxes.
TurboTax Deluxe, its most popular option, searches standard deductions and looks for a tax credit to get you your maximum refund. And TurboTax Premier is specifically designed for taxpayers that have investments or rental property.
TurboTax is hands-down the best tax software for live personal support — a must for many people when they’re filing taxes online. For an extra fee, you get TurboTax Live where a tax filer can receive help from a certified tax professional through on-demand support via live video chat. A tax expert also will review your return before it’s sent off to the IRS, ensuring you’re making the proper deductions and making sure your tax situation is under control. Max, its audit defense option, offers a dedicated specialist to represent you. It also includes identity theft coverage services such as identity loss monitoring and insurance. Not too shabby for an efile provider.
One caveat is that you will probably pay more compared to the others on our list. There is a free version, however, for simple tax returns only — though it’s one of the few services you can enlist to access the help of certified tax specialists without actually seeing one in person.
Pricing: Free to $90 for federal; $40 per state; free to $170 for TurboTax Live; additional $45 to $60 for Max.
Best multiplatform option: H&R Block
CNET take: It’s not as intuitive to use as TurboTax, but H&R Block is another heavy hitter that offers unlimited technical support to all filers as well as phone and chat support for those who opt for more expensive packages.
The online tax software platform features an intuitive survey format to guide you through the process, with built-in calculators to help navigate tax situations and a library of detailed articles that illuminate a wide swath of simple and complex scenarios.
We like that you can file your taxes online, in-person, via its app or by downloading its software. And H&R Block recently added a virtual filing option where you can just upload your documentation and have a tax expert take care of the rest of it. You can import a prior year’s income tax returns from another platform.
H&R Block also offers a comprehensive money-back guarantee — and will give you a 3.5% refund bonus if you’ll take it as an Amazon gift card.
u can get a certified tax pro to review your tax return before filing it.
Pricing: Free to $85 for federal; $37 per state; $40-$145 for Online Assist.
Best free option: Credit Karma Tax
CNET take: If you’re looking for the best free tax software, this is it. While some free tax filing software packages will charge for prepping your state returns, Credit Karma Tax doesn’t. It features a user-friendly interface, helpful guidance to explain tax-related terminology and live chat support for technical, though not tax-related, issues.
You can import a tax return from the IRS, as well as from TurboTax (whose parent company, Intuit, also owns Credit Karma), H&R Block or TaxAct. And Credit Karma covers more sophisticated issues than most other free packages including itemized deductions, business income or expenses, self-employment taxes and capital gains and losses.
Other highlights include audit defense, which includes a consultation with a representative who can also attend a hearing on your behalf and help with tax debt resolution options. And if you end up receiving a larger tax refund or owe less in federal taxes after filing with Credit Karma, you might be able to collect up to $100 in gift cards.
Credit Karma’s tax software has some limitations: You can’t file your state taxes without filing your federal taxes first, and it doesn’t support multiple state filings, part-year state filing or nonresident state filing — which could be a concern for more folks than ever in 2021.
It also can’t be used to file returns for previous years or to deal with thorny issues.