Which Tax Filing Software Should You Use? It Depends On These Factors

Karen Sheedy
·2 min read

The more complex your financial situation, the more comprehensive your software should be. For example: Do you have dependents? Will you be itemizing deductions? Did you work more than one job in 2022? These answers to these questions will determine how easy or how challenging filing your taxes will be – and thus, which tax filing software you should use (if you're preparing your taxes yourself). Some services are free; others cost. Below is a list of tax prep software services for various filing situations, plus links to access them.

Free Filing Through the IRS

If your adjusted gross income is $73,000 or less, you may be eligible for no-cost tax filing under the IRS’s Free File system. This gives you access to a handful of software options from major tax-prep companies like TurboTax and H&R Block, and it’s free of charge. Visit the IRS website (irs.gov) to see if you qualify. Once your eligibility is confirmed, the IRS will send you a list of available software.

Free Basic Services for Simple Returns

If all of your income is from one job and you don’t have itemized deductions or dependents, you probably don't need more than basic tax-prep software like the the free versions from TaxAct and TaxSlayer. Typically, you can only use these if you’re filing Form 1040EZ or Form 1040A, which means you’ll need to look elsewhere if you have itemized deductions. Even if the software is free, you may still need to pay fees to file a state return; check the fine print to be sure.

Paid Deluxe and Premium Software for Complex Finances

If your finances are more complex — you itemize, own multiple properties, have a lot of investment activity, or work as a freelancer — you’ll want a software package that can help you navigate that complexity. Tax-prep companies often offer different versions of their software — basic, deluxe, and premium — that vary both in features and price (about $30 to $200). Depending on how complex your return is, you can opt for a version specifically targeted to investors or the self-employed. Many of the higher-end tax filing software programs also offer live support, in case you have any problems while filling out your return.

A version of this article appeared in our partner magazine, The Essential Tax Guide: 2023 Edition.

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