It's that time of year again, and just like every other year I have April 15th marked on my calendar with a skull and cross bones. (I'm kidding.) Whether you are preparing to write Uncle Sam a hefty check or you are anticipating a fat refund, it is clearly in your best interest to make sure that your tax returns are complete and error free and that they contain all the deductions you might be entitled to. Fortunately, Americans who do their own taxes have more software choices than ever before, and for lightweight returns, there are often even free options available. While I don't claim to know which application is going to put the most cash in your pocket (the applications should theoretically deliver the same results), I can provide you with a rundown of some of the available choices.
It is worth noting that although this article provides a brief description of five tax software applications (with four of the five being free), the IRS actually offers a list of 14 companies that provide free tax software to individuals making less than $58,000 per year.
This article is also available as an image gallery.
1: TurboTax Federal Free Edition
Intuit offers the Federal Free Edition of TurboTax as a tool for completing simple federal returns. Unlike some of the retail versions of TurboTax, the software runs in the cloud, so there is nothing to download.
I have to admit that I haven't used TurboTax to prepare my own returns in quite some time, but the process of working through the Federal Free Edition was much like what I remember. The software simply asks you a series of questions (Figure A). Then it uses your answers to help complete the underlying forms (which are not immediately exposed during the interview process). Unfortunately, Intuit has included periodic nag screens as a way of trying to get you to upgrade to the commercial version.
2: TaxACT Free Federal
Like TurboTax Federal Free Edition, TaxACT Free Federal (Figure B) is a cloud application for completing federal tax returns. When I used it to start a return, a couple of things immediately jumped out at me. First, unlike with TurboTax, I was able to skip the registration process. Second, the TaxACT interface makes it really easy to jump around rather than sticking to a rigid interview process.
The nice thing about TaxACT Free Federal is that you can use it to complete both simple and complex returns. However, the software does occasionally nag you to upgrade to the Deluxe Federal version, which allows data to be imported and contains some extra calculators, reports, and things like that.
3: TaxSlayer Free Edition
TaxSlayer lets you create a simple federal return for free. Like TurboTax Federal Free Edition, TaxSlayer Free Edition requires you to complete a registration process prior to beginning your return (Figure C). And you guessed it: TaxSlayer Free Edition also presents the occasional nag screen in an effort to get you to upgrade.
Figure CTaxSlayer's interface is similar to the other online product I've discussed, in that it uses an interview process. However, one odd thing happened: Whenever I clicked on certain navigational links within the interface, I received error messages telling me that to ensure that tax return data was saved properly, I had to use the buttons located at the bottom of the page. It was really frustrating to have navigation links I couldn't use.
4: H&R Block Premium
Unlike the other apps I have discussed, H&R Block Premium is not free. H&R Block does offer a free option, but I wanted to include one premium product in the list because that may be a better choice if you have complicated returns. The one disadvantage to using this software (aside from the price — $64.95) is that because it does get installed locally, as opposed to running in the cloud, you must install any available updates to ensure an accurate return (Figure D).
Figure DOverall, H&R Block Premium isn't all that different from the free apps. Like them, it uses an interview process to build your return. However, the interface is clean and makes it easy to jump around whenever necessary. One thing that H&R Block Premium offers that the free apps don't is the ability to file a state return. One state is included in the price, and you can download the state-specific software through the user interface.
(Figure E) offers free federal tax
returns to individuals under 52 years of age (as of the end of 2013) and whose
income is $58,000 or less. Several things stood out about 1040.com.
Figure EFirst, the Web app had the cleanest interface of any product I looked at. In fact, it reminded me a lot of the Office 365 interface. Second, 1040.com did not pester me with nag screens. I can't say for sure that there are no nag screens, but if there are, I didn't encounter them.The third thing I noticed about 1040.com is that it requires you to use a more secure password than the other sites I have discussed. While this might seem like a small thing, strong passwords are always a good idea any time you are entering your financial data into a Web app.
Have you used any of these apps to prepare your taxes? Do you have a favorite that's not on this list? Share your recommendations with fellow TechRepublic members.