In this video, I’m going to give you my top three recommendations for which online
tax preparation software you should use and I’m going to explain why I chose them.
I really believe that using online tax prep software is the way to go when it comes to
filing out your taxes.
Not only is it a lot easier than learning to fill out tax forms all by yourself, it’s
also a lot cheaper than asking a professional for help, and sometimes, you can even do it
for free.
I’ll start this video with my favorite free option, followed by what I think is the best
paid option, and then I’ll finish up with the best value option so you can choose the
right product for you.
To make this video, I’ve tested all 12 of these options, and found the best options
to be Credit Karma Tax, TurboTax, and FreeTaxUSA.
Starting with Credit Karma, their tax program is without a doubt the best choice if you
are looking for something that’s free.
Unlike every other program I’ve tried, their program is the only one that lets you file
both your federal and your state taxes for free with no catch, which is great because
with other software, you end up needing to read through these complicated product tables
just to understand that what you’re getting is really free, or if you’re going to be
upcharged at the last moment, which often times you will.
Credit Karma Tax’s interface was both clean and easy to use, and they even have high-end
features like being able to automatically import your W2 or upload a photo of your W2
forms so that the program fills everything out for you.
Now, I really like Credit Karma Tax and would recommend it to anyone looking to get their
taxes done for free, but there is an elephant in the room that I think I should address,
and that is exactly how they are able to offer this service for free in the first place.
You may have heard the expression that if the product is free then you are the product,
and that is very true when it comes to Credit Karma Tax.
To use their tax software, you need to sign up for a Credit Karma account which is a popular
and free credit monitoring service, and they may use the data from your tax returns to
send you targeted advertisements for credit cards and other products.
While I personally don’t mind, I know a lot of folks out there are becoming increasingly
concerned about their data privacy, and if that’s you, you may want to consider one
of these other paid options I’m about to recommend.
Speaking of paid options, let’s talk about TurboTax, which I think is the best tax software
on the market, but it also happens to be one of the most expensive.
The interface is both modern and easy to navigate, and I felt like it was the smartest software
as well because it gave really strong recommendations about how to best answer certain tax questions.
For example, when I said that I made money on YouTube, it knew to ask me questions that
are relevant for this industry.
Just like Credit Karma, TurboTax has features to make importing your W2 easy and I was able
to easily transfer the info from my federal tax return to my state tax return.
If you don’t mind the price, then TurboTax is an easy option that I highly recommend!
But let’s be real, you probably do care about the price because if you didn’t, you
would’ve just hired a professional to do this all for you, right?
TurboTax currently has 5 pricing levels, 2 of which are free and this is where things
get a bit confusing.
You see, there is both a Free Edition of TurboTax and a FreeFile Edition of TurboTax, and they
are not the same thing.
The FreeFile edition of TurboTax is a partnership between the IRS and TurboTax, to let you use
their software for free if you meet any of the criteria listed on your screen.
On the other hand, the Free Edition of TurboTax is just the most basic version of their TurboTax
software and it only ends up actually being free if you have a pretty basic tax return
with maybe a single form W2 from your employer.
If you own a home, sold an investment, paid student loans, had side income, or you just
want to itemize your deductions, you’re going to have to upgrade to the more
expensive options which start at $40 for federal taxes plus an additional $40 for every state
tax you want to file.
Honestly, their pricing is pretty brutal compared to other tax software, but I really do think that
they have the best tax software on the market, so it’s kind of up to you to decide if paying
a bit more is worth it for a better experience.
Moving on to FreeTaxUSA, they have a program that I always find myself going back to because
they have a great mix of good quality and low pricing.
The interface is clean, easy to use, and they don’t have a lot of pages for you to click
through which means you can end up going through your taxes really quickly.
I also found the questions they ask to be clearer than other programs and they give
a lot of helpful tips for how to answer the more complicated questions.
As for pricing, you can file your federal taxes completely free with them, and your
state taxes end up being an additional $12.95 per state so you can end up filing your taxes
for around $13 which is a pretty great value.
So, to summarize everything in this video, you really just can’t go wrong with
Credit Karma Tax, TurboTax, or FreeTaxUSA.
Go with Credit Karma Tax if you want a solid free option, TurboTax if you want the best
program out there regardless of price, or FreeTaxUSA if you want a great mix of price
and performance!
Anyways, thanks for watching.
It took me a really long time to do my taxes 12 times on all these different programs I’ve
tested, so I would really appreciate if you could give this video a like, and if you’re
new to this channel, subscribe for more Five Minute Finance!