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Best Tax Software for 2016

We review the best online tax preparation and filing services

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Best Online Tax Service

Many individuals and businesses start to get a little flustered when tax filing time rolls around, often because this can seem like such a complicated and daunting process. Whether you are expecting money back or feel that you may end up owing more, going through the process of filing accurately, quickly, and on time can be difficult for many.

One of the ways around this problem is to invest in suitable and efficient online tax software, which can really help to take the strain out of filing your returns. In fact, 27 million Americans pay their taxes from home computers. This type of software is designed to increase convenience, ease, and speed, which means that you can boost the chances of accuracy as well as timeliness when it comes to getting your return to the IRS.

You will find a number of options available when it comes to tax software, so you need to determine which software is going to best suited for your needs. You will generally find that these services are pretty easy to use and offer a range of features that will help to increase simplicity.

Going through the various software options will enable you to make an informed decision with regards to the one that you select. You should look at the various features that are available as well as factors such as the cost of the software, reviews, and ease of use in order to help make the best decision for your tax situation.

Best Tax Software: What to Consider

By taking a number of key factors into consideration when choosing your online tax software, you can make sure you select the right product to suit your needs and circumstances. Some of the areas you need to take into account when making your selection include:

Is the Software Accurate? Most online tax software products promise 100 percent accuracy in their marketing materials, but in truth, no program can absolutely ensure complete accuracy. The best online tax return products offer an array of tools designed to steer you towards an accurate return that garners you the best possible refund.

Look for a program with an error checking tool that scrutinizes your completed return before you e-file it. Some software products run ongoing error checks as you work on your return. Another excellent feature is an import tool for items such as W-2 forms, and information from financial institutions on the sale or purchase of investments such as stocks, mutual funds or bonds.

A standard feature for online tax software is a guided interface, helping you complete each part of your return with questions or prompts. A well-guided interface will help with deduction discovery, as part of an accurate tax return is getting each and every deduction you are entitled too. You also want a program that guarantees its math calculations are correct.

User Experience - Does the software provide a rewarding user experience? The top online tax software programs such as TurboTax and H&R Block are a relative dream to use, as you are guided through each section of your return in a logical manner with a streamlined workflow. It's not necessary to be familiar with tax law and the huge range of IRS forms available. A good software program prompts you to provide information on your financial, family, work and investment situation to direct you through the preparation process.

Some online tax software programs offer less ease of use than the top performers, making them a better bet for those more experienced with tax preparation. The best way to gauge user experiences is to check independent customer reviews of the online tax software products you are most interested in.

Customer Service - How can you get ahold of help, and who are you communicating with when you get through? The best online tax software products provide multiple avenues to customer service representatives.

The budget programs predictably offer less, typically support via email with perhaps either a phone or online chat option. The top products offer email, phone, online chat and video messaging support. The better the product, the higher the quality of the help too. Look for access to enrolled agents, certified public accountants and tax attorneys.

Some of the players maintain a network of franchised retail tax preparation stores, and you can drop in and visit for face-to-face tax advice. It's always a good idea to call ahead and check if you will be charged extra for an in-person consultation.

A good software product also offers learning resources on their website, with answers to common questions and a user forum where the community of software users can discuss tax issues.

Cost - Just about every tax software product has a free version. If you make less than $100,000 per year and don't own a house, business or rental property, you have a simple tax situation and can file with the form 1040EZ or 1040A. Thus, you can your federal tax return using a free version of online software from most companies. Typically you must pay a fee for state filing although some companies offer free state filing for simple tax returns as well.

From there, prices vary. Spend as low as $9.99 for TaxAct Basic, and $12.99 for TaxSlayer Classic version, on up to $79.99 for the Home and Business edition of TurboTax. These prices are for federal tax preparation and filing. There is always an additional fee for state tax preparation and filing. Prices run from $9.99 up to $36.99 for the state filing version of each software program. So the overall federal and state fees for these programs range from around $20 to $117. One other cost note, the prices are for online versions. Typically you can purchase a download or CD version as well, which are sometimes slightly more expensive.

It's no surprise that you generally get what you pay for, with the most expensive programs offering the most functionality and ease of use, as well as superior customer service.

Consumer Reviews and Ratings - When it comes to a doing your taxes, the fear and dread factor ensures that consumer reviews will reveal all. If someone has a great user experience with a piece of software, they will share it, and even articulate what could be improved in an otherwise great product. If the software has an awkward user interface or clunky workflow, it finds its way into consumer reviews. Take the time to seek out these nuggets of truth as your research online tax software.

Tools and Features - Compare the tools offered by the different products, keeping in mind what you need most for your tax situation and level of knowledge and experience with the preparation process. You may simply need a basic program with a good deduction discovery tool, and you can find that at a good price. Or, you may need all the bells and whistles, like support for self-employment deductions and rental property income reporting, along with a guided preparation process and data import tools.

The online tax software industry packages several versions of their programs, targeted at typical tax scenarios. As your tax preparation becomes more complex, you need more features and tools, and the programs cost more. Here are the typical categories for online tax software:

  • Free version, aimed at the simplest tax returns on form 1040EZ/1040A
  • Basic, or entry level paid versions, are great for those looking to maximize deductions such as home mortgage interest.
  • Mid-level paid versions are targeted at taxpayers who also have investment and rental property income.
  • Top-tier paid versions, aimed at those who are self-employed or own a small business.

Each level of the software usually includes the features of the less expensive versions. These are online software products, where you use the product via an online interface. Most companies also offer a CD/download version, and a mobile version. If you go for a mobile version, make sure it offers all the functionality of the online version.

Meet the Best Tax Software Services

Presented here are a range of the best online tax software providers. There is something here for everyone. Take into consideration your financial picture, your level of comfort preparing your return, the features most important to you, and your budget as you mull over the choices.


  • Pros
  • Simple and easy to use
  • Customized tax advice, free of charge
  • Files accurate returns
  • Automatic importing
  • Tools to avoid calculation errors
  • Cons
  • A little more costly than some competitors
  • There are no tools for importing tax data from other tax services

TurboTax headlines our list of the best online tax software. It offers a great user experience and the mobile app is as good as the online version. The customer support and learning features are the best in the tax return software industry.

H&R Block

  • Pros
  • Over six decades of experience and expertise
  • Easy to use software
  • Excellent levels of customer support
  • A range of options for filing your return
  • A+ rating from the BBB
  • Cons
  • Slightly higher e-filing fees than some competitors
  • Below average reviews on some consumer review sites

H&R Block is a standout company in the online tax preparation software business. Their software program provides a clean interface and enhanced workflow, allowing you to sail through your tax returns in good order.


  • Pros
  • Speedy and efficient filing of taxes
  • Free federal return filing and competitive prices on state filing
  • Several different account options
  • Web based and online chat facilities
  • Comprehensive information available for guidance
  • Cons
  • No mobile versions available
  • No free phone support for non-paying users

TaxAct is an online tax filing service that enables you to quickly and efficiently prepare your returns and enjoy the convenience and ease of e-filing. The software includes good resources for learning how to maximize deductions and tax credits and has all the basics of preparing your tax return covered.

eSmart Tax

  • Pros
  • A cost effective option for those who have the skills to file solo
  • Decent customer support for accountholders
  • A choice of accounts to suit different needs and circumstances
  • Good consumer reviews on a number of sites
  • Free chat support and tax filing s
  • Cons
  • No telephone support available
  • Need to have an account in order to use the chat support
  • More suited to those who have experience and confidence in preparing their own taxes

ESmart's tax return software boasts an updated, user-friendly interface with a straight forward filing process. Users enjoy easy access to live chat that smooths out the bumps in preparing your tax return. The deduction resources are not comprehensive, but with its affordable price, eSmart is a top choice for taxpayers whose needs are relatively straightforward.


  • Pros
  • Free filing for military members
  • Options to suit a range of needs
  • No charges for additional forms
  • Simple to use, efficient, and accurate
  • Two account options to suit different needs
  • Cons
  • No PC download available

TaxSlayer is an online tax filing program that has some attractive features. You can use this affordable, user-friendly software to e-file both state and federal tax returns. It provides access to most all IRS forms you need to include. Active military members can use the product free of charge.

Best Online Tax Service Advice

As you shop for an online tax software program, take advantage of our advice guides to learn more about tax preparation and filing strategies. You'll get answers to some basic concerns such as how to maximize deductions, putting more money back in your pocket.

  • There are a lot of simple things you can do throughout the year to make your taxes hassle free. For some, it's a simple matter of tracking freelance business expenses on a ledger or creating a savings account dedicated to paying your tax bill. Check out these easy lifestyle hacks to smooth out your tax preparation experience.
  • Wouldn't it be great to file your taxes for free? Sure, you can go to the IRS site, sift through a bunch of random information and attempt to download the many forms you'll need, and hopefully, fill them out correctly. But there is an easier way to file at no charge, and even get guidance along the way, for those with simple tax returns.
  • Purchasing an online tax software program is a smart move for businesses and individuals looking to prepare and file their taxes. Here is our guide to the best features to look for in tax software.
  • April 15th can sneak up on the best of us, and sometimes it becomes necessary to file your tax return late. In that case, you can sneak a look at our guide to what happens when you file your taxes late.

Let's cut to the chase, the reason we sweat over our taxes is to put more of our hard-earned money into our pocket. That does not mean we are out to cheat, we simply want to take advantage of the tax deductions and credits available to us. Here's how those kids, cars, houses and more work to your advantage.

Best Online Tax Service Review Recap

While tax preparation and filing may seem like a really daunting task, you can ease the strain and indeed have a positive, money-saving experience by using the right online tax software. Making the right choice will enable you to save yourself a lot of hassle as well as time, and can ensure you file your returns accurately and efficiently.

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Questions & Answers About Best Tax Software

Can I use tax software if I'm a US nonresident?

If you are a U.S. nonresident alien either living, studying, or working in the country then you should indicate this status when inquiring with different tax services. The process to file taxes is quite different if you're a non-resident. Luckily, some of the organizations on our list have partnered with other sites to help facilitate the process. For example, Turbo Tax has partnered with to help individuals receive their proper exemptions, expenses, deductions, and tax treaty agreements. This applies to you if you're an international student in the United States, a non-resident landlord, a foreigner employed in this country, and don't have a Social Security number.

What happens if I get audited?

If you purchase a tax software program or service and happen to get audited in regards to the information on your documents, many companies like Turbo Tax, offer a free one-on-one audit guidance service. The members of their staff will tell you exactly how to prepare for it including everything you need to disclose or paperwork to provide. For an additional fee you can also opt for Turbo Tax Audit Defense. Another provider on the list, eSmart, offers a similar audit assistance service. Their terms suggest that any one of their software users will receive support if they get audited. This does not however include legal assistance or an agreement to reimburse the user for any penalties or interest imposed.

What companies are available for personal tax software?

There are many companies on the market which offer do-it-yourself tax software. Some of the most reputable companies are Turbo Tax, H&R Block, TaxACT, eSmart Tax, and Tax Slayer.

Can I use tax software if I'm a US non-resident?

When you are filing your taxes, you can specify if you are working, living or studying in the country during the initial filing steps. You must specify this information because filing taxes as a non-resident is quite different than processing US resident taxes.

Which tax software company should I choose?

That is really up to you and your personal preference. On each of the company's website and reviews, be sure to check out their customer ratings in all areas, to ensure that they are reliable, trustworthy and easy to navigate. There will usually be a customer star rating on each companies review; these are a good indication of the consistency of the company.

What happens if I get audited?

Everyone runs the risk of getting audited so it is important to ensure that your information is as accurate and correct as possible. The customer service department of the tax company you choose will notify you if you are in fact going to be audited. Some companies actually offer an audit defense that you can purchase.

What should I consider when purchasing tax software?

There are several things to be aware of when purchasing tax software. Some of these are how easy the software is to use, the accuracy of the software, the kind of support and assistance they offer you, how much the software cost, consumer ratings, and features of the software.

Can I file my taxes late?

There are several consequences in filing your taxes late but you still are able to file them even after the April 15th deadline. You can also file an 'extension' – this will help you have more peace of mind and will cut your penalties down. Upon approval of your tax extension, you will have six months to file your taxes. That brings your tax due date to Oct. 15th of that same year.

What types of penalties are there for filing taxes late?

You will be charged with a late payment penalty that you will be expected to pay due to the fact that you failed to submit your taxes by April 15th. If you opted against an extension, you will owe a late filing fee as well. This will cost you five percent of the taxes in which you owe plus interest.

Can I pay the IRS in installments?

Some people simply cannot afford to pay the IRS if they happen to owe money. This is where you are able to file for an extension so that you can financially afford to pay your taxes. You can create payment plans via credit card and even negotiate with the IRS in order to make a payment plan that best suits your situation.

How do I know if I owe money on my taxes?

Many tax companies offer an income tax calculator that will help you determine whether or not you can expect to pay. The calculators are updated yearly to ensure the most accurate calculations.

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Advertiser Disclosure

In order for MoneySavingPro to remain a consumer free service, many of the companies covered in our industry reviews compensate MoneySavingPro for new sign ups.

However, the results of our comparison tools, the rankings of the providers and the information presented is not affected by compensation. Indeed, many of these companies approach us for an advertising partnership after we have already written a published their reviews.

While we try to research and review as many providers as possible in the 100+ industries we cover, we have not reviewed every company available.

Our rating system is independent of compensation and reflects our true understanding of the industry and the company based on a variety of factors. The companies that receive the highest rating will always be the providers that we believe offer the best value to the consumer.

Advertiser Disclosure

In order for MoneySavingPro to remain a consumer free service, many of the companies covered in our industry reviews compensate MoneySavingPro for new sign ups.

However, the results of our comparison tools, the rankings of the providers and the information presented is not affected by compensation. Indeed, many of these companies approach us for an advertising partnership after we have already written a published their reviews.

While we try to research and review as many providers as possible in the 100+ industries we cover, we have not reviewed every company available.

Our rating system is independent of compensation and reflects our true understanding of the industry and the company based on a variety of factors. The companies that receive the highest rating will always be the providers that we believe offer the best value to the consumer.