The Best Tax Software for 2020 (According to Your Needs)

Your grandfather might have been able to sharpen his pencil and do the math on a notepad when he prepared his tax return, but there have been many, many tax law changes since his day. They’ve rendered do-it-yourself tax returns almost obsolete. Luckily, all this has coincided with mega-advances in technology, and quality tax preparation software abounds.

That’s the easy part. Taxpayers still have to figure out which of the tax software programs available in 2021 best suits their needs, and which tucks most comfortably into their budgets.

Let’s start with those who don’t know the difference between a tax deduction and a tax credit, or even what all those boxes on their W-2 forms mean. It’s hard to go wrong with TurboTax, which tends to get “best overall” nods whenever anyone reviews these products.

TurboTax almost literally holds your hand as it walks you through preparation of your tax return. It asks questions throughout the process and all you really have to do is answer them. The program will apply the information to your return. The Deluxe version includes a superior help system. All versions offer explanations of what’s going on as you progress through your return, and they allow you to ask questions if you’re unsure about something, too.

You can get the ​Deluxe version for $119​ in 2022. least early in the tax season. Prices ratchet up to ​$169​ ​to​ ​$199​ for the premier and self-employed versions, although there ​is​ a free version for very simple returns. These prices cover up to five tax returns per version, however, so you could literally take care of your whole family with one purchase.

• ​Honorable Mention:​ Not to be overlooked, H&R Block is also very easy to use. It, too, has a free version and will only set you back ​$80 for the professional help version​, so you can save yourself a fair bit of money.

​Read More:​ What Is a Simple Tax Return?

There’s handholding, and then there’s handholding, and TurboTax wins here again. The TurboTax live version lets you talk face-to-face with a certified tax professional if you really run into a wall. The professional will also look over your tax return before shooting it off to the IRS, and you can buy in for an audit defense option if you’re particularly concerned.

• ​Honorable Mention:​ TaxAct also offers phone support, chat support, and screen-sharing. It has a free package for super-easy returns, but otherwise plan on spending from ​$25 to $65​. Self-employed versions are extra, and some of the specialist support options are an add-on.

Almost all the leading tax software providers provide free versions for no-frills, very basic tax returns – think moderate income, no dependents, and claiming the standard deduction rather than itemizing. But Credit Karma goes one better: All its returns are free. The other freebie versions of products tack on a charge for state returns, but not Credit Karma.

Credit Karma also provides explanations and definitions for mind-boggling tax terms, and it handles itemized and above-the-line deductions in a not-overwhelming interface. Chat support is available if you run into technical issues, although it doesn’t deal with all tax issues. Digital Trends says this is the best free option for more complicated returns, and that it keeps getting better every year. If it has a shortcoming, it’s that a few less common tax forms are missing.

• ​Honorable Mention:​ Consider FreeTaxUSA if you don’t want to dip into your bank account for high-priced help. Limited live chat support and tax specialists are available if you run into complications, and you can file an amended return as many times as you like if you make a mistake. All this for about ​$7 for the Deluxe version​ and a state return will set you back $15. Basic filing is free. Just don’t ask it to import your Forms W-2 or 1099s.

• ​Honorable Mention:​ At ​$18 for the Classic product​, TaxSlayer is also pretty easy on the budget. Simple returns are free, but state returns are only available at additional cost. It provides all the important tax forms and schedules, but its data-input features can get a little suspect on occasion. PCMag indicates that TaxSlayer consistently improves on itself from year to year, but you might have to be at least a little tax-savvy to feel comfortable working with this one.

​Read More:​ Tax Return Preparation: Tax Services, Tax Help and More

OK, maybe you don’t quite earn six figures, but you're pretty sure you qualify for myriad deductions, tax credits, and you want to explore some loopholes. You have dependents and you’ve begun saving tax-free for retirement and your kids’ educations. You want big-boy software.

You might want to try Jackson Hewitt if you don’t go with TurboTax. Like many other software providers, Jackson Hewitt gathers your tax information in a question-and-answer interview process, but it does it with a nice eye for detail. It’s comprehensive, and it covers just about any tax issue you might encounter, assuming you’re an individual taxpayer and not a C corporation. Prices depend a lot on your personal tax situation, so visit the website and enter your data to see how much this one will cost you.

Keep in mind that most of these products will charge a little more for a variety of extras. There’s almost always an add-on fee if you want to file your state return as well, and many charge more for live help and support.

Don’t overlook the benefits of the Free File Alliance if price is really a consideration. Many of the software providers mentioned here partner with the IRS through this program to provide free federal tax return preparation and filing to those whose incomes are ​$73,000​ or less as of ​tax year 2021​. This is the return you'll file in 2022. You can choose a software provider and get started on the IRS website.

​Read More:​ What Happens If You Don't File Taxes?