If you’re self-employed, you may need Forms 1099-MISC, Schedules K-1, expense receipts, and records of estimated tax payments. Depending on your tax situation, there’s a long list of personal information and forms you’ll need to prepare your tax return. This information can include your W-2, your Social Security number, and documents related to homeownership, charitable donations, and medical expenses.
Having prepared 12 fake returns in our testing, we know that returns with more forms and complications present a much greater chance for error. The average cost of a professional is $158 per hour for federal and state returns.
For our top picks, we also looked at import options, such as connecting here to your bank for interest statements or letting you upload a photo of your W-2. While this can be convenient and save you time, we didn’t prioritize such features in our review, due to the limitations that some tax programs have with importing documents. As with auto repair, home improvement, and first aid, there are situations in which it makes sense to DIY and situations that are better left to the pros. If you freelance or own a business, if you manage rental property, or if you have investments more complex than interest or dividend payouts, find a good tax professional.
Half an hour passed before we eventually classified Erica’s event-planning business as “Rental and Leasing Services,” whether or not that was the right one to choose. Unlike other tax-prep software, Credit Karma Tax doesn’t walk you through the process from beginning to end in a straight line. After each form you finish, you have to click to go back to the tax homepage and select the next form to complete or edit, rather than move to the next form automatically. As annoying as that might sound, we like this setup because it helps ensure you won’t miss any of the forms that might apply to you. You “pay” by signing up for Credit Karma’s main service, which offers recommendations for credit cards and other financial products based on your credit report and other info you provide to the company.
For those who have a more complicated return—for example, you’re self-employed or you sold stocks—we suggest finding a tax professional. The IRS Free File program allows you to submit your federal taxes for free, even if you’re using an app like TurboTax. Last but not least, Liberty Tax does not offer a free federal filing plan but they do accommodate more complex tax situations. They also have brick-and-mortar locations (as does H&R Block), if you’d like to meet with a real live person.
If you’re looking for a free federal and state return option but also want the ability to upgrade your account or speak with an advisor , you might want to look into services like TaxSlayer and TurboTax. If you’re an investor or would like to get one-on-one advice from an advisor, you’ll want to opt for the Deluxe Edition. This plan costs $44.95 for federal returns and $39.95 for state returns.