It’s tax season and the last date for paying your taxes is approaching. For the last few days, you are gathering all the records and documents of all the transactions you’ve had in the last financial year. After this, you’ve started calculating your taxes with a pen, paper, and a calculator. You’ve spent a few days calculating your cost basis, fair market value, and capital gains and losses. After figuring everything out, you have pulled up tax forms to the best of your knowledge and filed your tax report.
This seems like a tax nightmare that can last a few days and in the aftermath, you found out that the calculations you did weren’t even correct. If you are wondering if all this could be avoided, the answer to this question is a resounding ‘yes.’
When it comes to calculating taxes, TurboTax is undoubtedly one of the best tax software. TurboTax makes the tax filing process stress-free with its range of features and unprecedented maximizing of tax deductions. Moreover, you can calculate your taxes in minutes yourself and if you feel overwhelmed by the sheer quantity of paperwork, you can entrust it to an expert who will handhold you through the filing process.
However, there’s a catch. This ease of filing taxes can run up a cost. It is considered the crème de la crème of the tax software space, but it costs more than its counterparts. On top of that, if you seek expert help, it is going to cost you even more. This is where TurboTax alternatives come into the picture. These alternatives are on par with TurboTax and don’t cost much.
So, how about we look at some of the best TurboTax alternatives? But first, here is a noteworthy point to be updated upon; the regular filer's tax filing deadline for the 2022 tax year is April 15, 2023. If you miss the tax filing deadline without an extension, you might get hit with penalties and interests on your taxes.
Why is Tax Preparation Software Important?
1) Time Saving
Tax preparation software can help individuals and businesses save valuable time. When organizations pay their taxes—especially smaller ones—tax preparation software can improve employee productivity as it eliminates the long stretch of calculating taxes, adding numbers, and cross-checking them. Tax preparation software helps calculate deductions, credits, and other important tax duties faster than human beings - so why not leverage it?
2) Highly Accurate
A taxpaying individual understands that even a small error while calculating taxes can throw off the entire tax calculation. This can result in tax penalties, interests, and some other charges. When you calculate your taxes manually, you become solely responsible for reporting your taxes even if you make a tiny error or a typing mistake. This is where the tax preparation software comes in as a rescue, looking at your transaction history and calculating your taxes accurately - all done automatically within a few minutes.
3) Less Expensive Than a CPA
CPAs are experts and consultants who help individuals or businesses with taxes and accounting. And since they are experts, they can charge a hefty amount to do your taxes, about hundreds of dollars if not thousands. This amount, by default, is too expensive for an individual or even for a smaller organization. Tax prep software, on the other hand, can help you calculate taxes for just a few bucks! Sometimes if the taxes are really simple, you can use their free or basic versions to calculate your taxes, as well.
4) E-Filing Facilities Recognized by the IRS
Taxation software allows you to pay taxes online easily - in just a few clicks. On top of that, IRS-approved taxation software can make you eligible to apply for financial aid, build your Social Security benefit, and protect your credit.
5) Simple Record Keeping
For businesses, record keeping is important because it stores vital tax data, and tax software can come in handy in this endeavor. Some tax software offers cloud versions of their services, which can further help in keeping a record of the past year’s taxation data. Not only that, taxpayers can access their information anytime, anywhere.
6) ZenLedger Crypto Taxes with TurboTax Integration
To help you calculate your cryptocurrency taxes with ease, ZenLedger has patterned with TurboTax. If taxpayers buy the Premier version or above of TurboTax Online, they can have access to a new cryptocurrency section and file their crypto taxes with just a few clicks.
Best TurboTax Alternatives
TaxAct offers its services to a variety of taxpayers - including businesses, workers, estates, and trusts. The best part about the alternative is its free plan with multiple options in comparison to TurboTax, not only that, but it is also cheaper than TurboTax.
That being said, this is one of the finest alternatives to TurboTax as it allows the users to file federal taxes without any payment, offers pro tips for maximum tax deductions, and if a switch is required from another tax software to TaxAct - all one needs to do is simply upload the PDF returns of the previous year and TaxAct takes care of the rest.
Adding on to its user-friendly interface, it charges $0 for federal filing as to $39.95 for state filing. If you’d like a Deluxe plan, a payment of $47.95 is to be made, $71.95 for a premier plan, and $94.95 for a self-employment plan.
TaxSlayer is a cloud-based tax prep software that encourages you to pay taxes independently using their easy step-by-step instructions. Its classic plan supports all tax situations at a low cost and the former’s plan costs less and offers expert assistance. In comparison to TurboTax with expert assistance costs at least $80.
Using this TurboTax alternative, you can file one free federal and state return. The software guarantees the biggest possible refund and its tax reform calculators. It uses information from the past year to help file taxes - this not only saves time but also allows you personalized tax tips. And not to forget, unlimited expert guidance while filing taxes
TaxSlayer has a sound price structure and an excellent range of features. In its free version, you get one state and federal return, but with the Classic version, which is $24.95, each state return costs $39.95 extra. The Premium version at $44.95 offers each state return at $39.95 and for the Self-employed with a cost of $54.95 with $39.95 for each state return.
3) H&R Block
H&R Block is one of the best free tax software that offers you a state file and federal taxes without any cost - already putting it above the free version on TurboTax. In case of expert help from a certified professional, it can be availed using the Premium Plan for $69.99.
It ensures complete accuracy - the best part yet? If the software makes any errors, the company pays a penalty of about $10,000 - right? Also, in case you get audited, it offers no-charge audit support as well. Starting with H$R Block is as easy as uploading a snap of your W-2 with real-time updates on your returns and refunds, and the free Earned Income Credits.
For the Deluxe, Premium, and Self-employed versions you have to pay $49.99, $69.99, and $109.99 respectively.
FreeTaxUSA was founded in 2001. It offers one of the best free versions of tax software, comes with an easy-to-use interface and a filing process. When compared to the free version of TurboTax, it offers a better alternative as TurboTax’s free version only works if your tax needs are simple. On the other hand, FreeTaxUSA allows you to file federal taxes for free, but you will have to pay $14.99 for a state return. The software ensures maximum tax deduction using its 350+ deductions and credits.
In case you are new to the world of tax filing, it's the best software to practice on. Not leaving the experienced taxpayers behind - the software can be used to compare the returns with the previous year, analyze the tax situation, and plan for the future accordingly.
Just like federal returns, you don’t have to pay for filing Form 4686. However, for the state return, Deluxe plan, and Mailed printed return it is $14.99, $6.99, and $7.99 respectively. It is one of the best TurboTax alternatives as it offers a fair range of features at a minimal cost.
5) Jackson Hewitt
Jackson Hewitt is not as flashy as H&R Block or TurboTax, but its $25 price for a single federal return and unlimited state returns is hard to beat. It doesn’t offer different tiers or versions of services based on the complexity of the tax situation - but instead, it allows you to file for a price no matter how complicated the tax situation gets.
It is one of the best TurboTax alternatives as it offers IRS audit assistance without any cost along with a Lifetime Accuracy Guarantee® to safeguard you against unexpected interest or penalties. However, no good comes without any drawbacks - the software’s website is observed to be slow, you cannot upload files or tax forms, and support is not great.
To avail of its features, you will have to pay $25 for all the tax needs. And for expert assistance, a payment of $99 is required.
6) IRS Free File
The IRS Free File Program is a partnership between public (IRS) and private organizations (tax preparation software providers) that offer tax preparation and filing online without any cost. With this program, you can prepare and file your federal income taxes with these steps:
- Go to IRS.gov and begin your filing process. If you go directly to the partner website, you will not receive any benefits offered.
- Select the IRS Free File option, Free File Fillable Forms, or guided tax preparation.
- You will be redirected to the IRS partner’s website where you have to create a new account or log in if you are a previous user.
- Prepare your federal tax return and e-file it
- Lastly, you’ll receive an email when the IRS accepts your return.
7) Cash App Taxes
Formerly known as the Credit Karma Tax, Cash App Taxes is a fast, easy, and completely free way to file your state and federal taxes and doesn’t have any hidden charges, fees, or surprises. Over the years, it has acquired millions of users and they have rated Cash App 4.8 out of 5 stars.
Cash App Taxes is an IRS-recognized e-file provider and complies with privacy, security, and business standards set by the IRS. It uses 128-bit or higher encryption to protect data transmission and supports 2-factor authentication. The taxpayer's information is protected by procedural, physical, and electronic safeguards. It has a dedicated on-site security team in case of an emergency and lastly, it has supports
TurboTax has been in the tax preparation software space for a long time. And this time advantage has made it the best tax preparation software. However, there are several alternatives to TurboTax that can offer pretty good services at a lower price. In this article, we have mentioned some of the best alternatives to TurboTax, which can help you with your tax needs.