Tax preparation software, as opposed to online services, supports five Federal eFiles. If you just need to file a 1040EZ or simple 1040, you can usually file for free online. However, if you need to itemize your deductions or claim small-business or freelance income, this is a good deal. In fact, many people buy the software version and share the other four eFiles with family members. For example, if you have a home and need to claim deductions and credits, it could cost you as much as $30 to file using an online tax service. However, the comparable TurboTax software is $59.99 and includes five eFiles, a $300 value. The software will also allow you to print your returns for free to mail or archive them. There is a fee for eFiling with your state return; however, all services charge extra for eFiling state returns.
Popular tax preparation companies such as TurboTax, H&R Block and TaxACT provide downloadable or CD versions of current tax preparation software. Most versions also include the information you need to prepare your state return. TurboTax, H&R Block and TaxACT software also has the ability to import data files to and from each other should you want to use a different solution from the one you used last year. This is also true of most online versions. Just because you used a different service last year does not mean you are bound to that service this year.
Here are the tax preparation software options available to you:
TurboTax (all include five free eFilings)
Basic: Standard 1040EZs and simple 1040s
Deluxe: 1040s with itemized deductions
Premier: 1040s with investment, rental property income/loss
Home & Business: Self-employment income
H&R Block (all include five free eFilings)
Basic: 1040EZs and simple 1040s
Deluxe: homeowners and investors
Premium: Self-employed and rental property owners
Premium and Business: Small businesses taxes
TaxACT (one free, each additional is $7.95)
Free Version: 1040s with one life event
Deluxe: 1040s, more than one life event and tracking non-cash donations
Ultimate: 1040s plus filing of state return
If you are concerned about the cost and energy needs required of shipping a physical CD to your home, most tax services offer a downloadable version that does not require shipping or any type of material expense. This method allows you to utilize everything the software has to offer instantly and without requiring you to deal with a box and refuse. Good backup practices will preserve access to the software and your financial files. We recommend that you create a disk image of your drive to preserve all aspects of the applications located on your hard drive. In addition, we recommend that you save your financial files in two locations.
If you have more than one tax filer in your home, a group of friends or at least five adult filers in your family, this may be a good deal for all of you. This is also an applicable choice if you live in an area without access to high-speed internet because you can prepare your return offline, and you only need the internet to submit your eFile. If you have questions about what tax preparation software can do, please consult our reviews and product specifications.
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