Tax time is coming, but 2019’s new breaks and exemptions aren’t making the occasion any less stressful than usual. Although many people merely want to identify filing services that let them finish on time without mistakes, smart consumers do everything in their legal power to maximize their refunds.
Where do you stand? No matter what your goals for a productive tax season are, your returns depend on your preparation method. Those seeking to capitalize on larger refunds must work with a provider or tool that files the forms correctly and finds appropriate exemptions.
Local CPA
Hiring a local certified public accountant (CPA) is a good way to let someone else handle the nitty-gritty of your tax filing. This traditional approach typically costs more money than software-based options. Following the loss of exemptions like those that once let freelancers deduct their tax preparation costs, filing expenditures could be a growing source of concern for some people.
Is connecting with a local tax professional worth it? CPAs might be advisable for those who have to deal with complicated filing statuses and regulations. Tax prep software is excellent at revealing how much larger or smaller your return amount might be with specific exemptions and reporting methods, but human oversight isn’t to be underrated. CPAs might help you sidestep unintentional liabilities by exploring your filing and money management decisions more accurately.
When hiring a local CPA, remember that not every accountant is equally skilled. Before making your final decision, be sure to do your homework. From checking online reviews to researching how long each CPA has been in business, you can improve your refund size outlook by maintaining high standards.
As an alternative, you can also hire an enrolled agent (EA). EAs are federally regulated professionals that typically represent taxpayers during IRS negotiations, so they may be better at helping you with audits.
TurboTax
Intuit’s TurboTax is among the most popular prep software packages in the U.S. Lots of people love the interview-style walkthrough that makes it easier to tackle unfamiliar issues. With upgrades starting at $30, this software seems reasonably affordable, but things look less attractive when you realize you also have to pay the same amount for a state return.
Like other companies, TurboTax releases new versions of its state and federal filing applications annually to coincide with current laws and regulations. This software is known for being comprehensive, so it could be ideal when you’re on the hunt for obscure refunds and kickbacks.
You can use the free federal version of TurboTax if your adjusted gross income doesn’t exceed $28,500. Watch out, however, because state tax filing costs extra. Also know that although you can upgrade your service to include audit protection, it may not be worth the additional fee if you’re filing a boring-old regular return since the IRS only audits about one percent of taxpayers.
TurboTax is insanely widespread. As such, it may suffer from being too big for its britches. For instance, in 2015, Minnesota temporarily quit accepting TurboTax returns due to high rates of fraud. Also, Intuit routinely changes the features that its software supports, so you may have to file certain IRS schedules manually even if you use the paid Deluxe version. Nonetheless, TurboTax remains popular with private citizens and business owners alike.
H&R Block
According to Nerd Wallet, H&R Block is a good middle-of-the-road option. It offers free versions of its federal and state prep tools as well as the ability to file new tax schedules without upgrading to the paid option. Those who want more can try enhanced versions of the federal and state tools starting for about $50 total. Since this software is known for its accessible linear workflow, it might frustrate those who prefer to jump around as they fill in various forms and look for breaks.
H&R Block first earned its name as a brick-and-mortar tax prep company. This distinction makes it possible to get your questions answered cost-effectively by a real human via the “Ask a Tax Pro” feature. The firm also offers a Tax Pro Review service, which starts at $50. With Tax Pro Review, you get to walk through your entire return with a professional who can help you seek out extra deductions and complete the e-filing process. Through their Tax Identity Shield — which costs users $15 — H&R Block offers cheaper audit protection than some alternatives do.
If you are still uncertain, you can test drive the product by working through your return without filing or creating an account.
TaxAct
TaxAct includes various prep tools geared toward the cloud, desktop computers, and smartphones. These tools cater to different kinds of professionals, such as sole proprietors and the self-employed. With free federal and state options, it’s known for being extremely economical, but some reviewers note that the software’s complimentary version seems to include fewer features with each passing year. Upgrading your federal and state to the top TaxAct package can cost as much as $80.
Although this software attempts to guide people with a question-and-answer workflow format, some filers may find the linearity and straightforward option paths restrictive or tedious. Fortunately, TaxAct provides multiple ways to get help, including unlimited free support, paid supplemental email support, Premier-version screen sharing, and a searchable knowledge base.
You can buy audit coverage, but it’s provided by a third-party partner. You also have to purchase the protection when you originally file; there’s no going back to add it later.
TaxSlayer
TaxSlayer is another product whose parent firm got its start as a traditional filing service. Key highlights include its free state and federal services and simple app interface. If you feel like upgrading to a paid version, you can do so without breaking the bank. Federal upgrades begin at around $17 and the most basic state upgrades are only $29.
The default version of this tool walks you through filing, so you can handle complicated issues more efficiently. There’s also a Quick File option that lets you pick the forms you want to complete and then fill them out. This feature may appeal to those who already know their way around tax returns and want a no-frills, cheap solution.
TaxSlayer support covers technical issues by default. If you want help deciphering tough filing puzzles, however, you’ll need to pay for an upgrade first. Plus, this software includes a self-employed option that improves on the Premium version and comes with professional assistance.