What determines how much online tax software will cost me?

To estimate the price of the product that works for your situation, click on “What’s My Price?” in our comparison chart above. The total price of online tax software products typically ranges from free to more than $100, depending on two main points:

• First, your price depends on how complicated your tax return is. Most tax software companies offer multiple products, each of which is tailored to specific tax situations and supports specific tax forms. The price you pay to prepare and file your federal tax return gives you access to various capabilities, supported forms and deduction tools.
• Second, your price depends on whether you need to file a state tax return. To file a state tax return using online tax software, you must pay a fee in addition to the cost of filing your federal tax return. On one hand, online tax products require you to pay to access the state forms, but they let you e-file your state return for free. On the other hand, tax software download products include access to the state forms, but they require you to pay for e-filing your state return.

What are 2009 tax software products?

Even though you will be filing your taxes during 2010, the current tax software products are called “2009 tax software products” because people will be filing their taxes based on income earned during the 2009 tax year. 2009 tax software products are the most up-to-date tax products on the market.

About the 2009-2010 tax software ratings

Our star ratings were scientifically calculated, using various criteria across four key categories:

Ease of Use:

Criteria under Ease of Use includes the ease of saving your return and coming back to it, the thoroughness of the tax questionnaire, and the ease of filing state income tax. Companies were rated relative to one another, with points awarded for features that stood out or were above average. If standard features were lacking, such as the inability to import from Quickbooks, then the company was docked points on the corresponding criterion.

Tax Support:

Tax Support focuses on the help available to you when filing your taxes and the support offered in the event that you are audited. This category also factors the cost of receiving tax advice from a tax professional. For example, if live tax advice is available at no extra cost for all levels of the paid products, then the company is awarded maximum points.

Tech Support:

Tech Support signifies how well a company’s main support line was able to answer questions about their products, as well as how available they were. We analyzed four main channels: phone support, live chat, email support, and the online knowledgebase. We asked each support channel the same set of sample questions, and points were awarded for correct answers. Tech support is a valuable resource, since support techs should be able to explain how to properly use your tax software product.

Reliability:

Our Reliability category reflects the consistent quality of service of a given company. Criteria under this category include the number of years a company has been in business, a money-back guarantee, an accuracy guarantee, and the company’s rating with the Better Business Bureau.

Why use online tax software

• It’s inexpensive. Taking your tax return to an accountant can be a costly process. With online tax software, you can get help and support with filing your taxes at a fraction of the cost of hiring someone to prepare them for you.
• It’s easy. You will be guided through forms that are often hard to understand. And, if you use the same provider every year, you'll be able to transfer in data from a past year's return.
• It catches errors. Filling out a form incorrectly can lead to added stress or even a penalty from the IRS. Online tax software helps you avoid these mistakes.
• It helps maximize your deductions. You'll get help with claiming industry-specific deductions to help insure that you get the biggest refund available from your tax return.
• It helps you easily e-file. Calculating your tax return online makes it easy to file your return online (e-file) or file for an extension.

Common features of online tax software

Basic Product
 

• Free federal e-file
• Pay for the product when you file
• Ability to add state tax return program
• Includes relevant tax forms (excludes self-employment and small business forms)
• Handles life changes (i.e. getting married, having a baby, changing jobs, buying or selling a home or receiving inheritance)
• Imports data from last year’s tax return (TurboTax and H&R Block At Home can import from each other’s programs as well as their own.)
• Imports 1099 and W-2 forms from select payroll providers and financial institutions
• Imports financial data from Quicken
• Saves your progress and allows you to skip to different sections
• Simplifies estimated tax payments and offers payment scheduling options
• Guarantees accurate calculations

How does tax software handle state income taxes?

Typically, you must pay an additional fee (ranging from $10 to $49.95 for the products we’ve reviewed) to file your state taxes. Although the price for the state add-on may be listed as “free,” depending on the product you select, the state add-on may already be included in the price. Online tax software guides you through the relevant state forms in much the same manner as it guides you through your federal return. Some tax software companies will automatically import any relevant information from your federal return to your state return, saving you time and effort.

Click on “What’s My Price?” in our above comparison chart to determine your cost of filing federal and state taxes with the top tax software products.

Why use Tax-Compare

Tax-Compare.com was created as a result of our own frustration in choosing an online tax software product. In attempting to answer the question, "Will online tax preparation services work for my situation?" we found several different providers, which offer personal and business online tax software products, and sometimes a combination of the two. We help you to fully understand the differences in price, add-ons, supported forms, customer support and other relevant data, so you can make an "apples to apples" comparison, select a product, and get back to business. We are committed to providing a quality resource to individuals and small business owners that will save time and money and eliminate the frustrations that we ourselves have experienced.