Author: Hannah Rounds
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Going into 2021, many of us though it would the year of returning to normalcy. But the effects of the pandemic and economic turmoil continued to ripple through the economy.
These changes inevitably affect tax returns. Unemployment claims slowly fell to pre-pandemic levels, but many people will still need to claim unemployment income on their returns in 2022. Many parents are in situations where they need to reconcile payments received with their expected annual refund. Some people will need to claim the Recovery Rebate Credit to get their third stimulus check.
And these are only the changes due to external factors. New economic trends and choices also mean that many filers have added to the complexity of their tax returns. The rise of “meme stocks” and crypto trading means that more people fall into the “investors” category. And the trends toward self-employment and gig work have only gained momentum. Newly self-employed people will need to learn the ropes related to claiming legitimate deductions.
Well, we’ve been reviewing all the major options this season, including TurboTax, H&R Block, TaxAct, TaxSlayer, Cash App Taxes, FreeTaxUSA, Tax Hawk, and more. If there’s something you think we’ve missed, or don’t quite know which is best for you, let us know in the comments!
Note: The tax prep offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all tax prep companies or all tax prep offers available in the marketplace, although we are always striving to keep our content updated.
Promo: H&R Block is either “best” or “runner-up” in many categories. And while other select products may niche down, most tax filers will find the combination of robust offerings, price, and the ability to go in-store if needed as a huge win. Check out H&R Block here >>
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Best Tax Software Overview |
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Best For |
Tax Software |
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Overall |
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Free Filing |
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Maximizing Credits And Deductions |
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Student Loan Borrowers |
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Cryptocurrency Traders |
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Tax Liability Calculators For Crypto And NFT Traders |
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Stock Market Investors |
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Landlords |
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Side Hustlers |
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Small Business Owners |
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Value For Experienced Filers |
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Support From Tax Pros |
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Virtual Tax Preparation |
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Tax Refund Anticipation Loans |
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Best Overall Tax Software
The best overall tax software category represents the software that is good or great at almost everything. Basically, these are the main “utility” picks regardless of your tax situation. You’ll have to pay a high price-point to use these programs, but they simplify tax filing no matter what your situation is.
Winner: TurboTax
Why: TurboTax is hands-down the easiest tax software to use. It’s expensive, but it makes tax filing dead simple. In many cases, filers can simply connect to accounts or import files to complete tax filing. We’re particularly impressed by TurboTax’s integrations with Coinbase, Quickbooks, and most major brokerage companies.
Runner Up: H&R Block
Every year, we’re impressed by H&R Block’s incredible functionality. This year is no different. It doesn’t boast integrations with CoinBase, but filers can easily import their W-2 and 1099 forms.
The clean user interface and question-and-answer guidance make H&R Block an excellent option for most people. H&R Block is somewhat less expensive than TurboTax and equally usable (unless you’re a crypto trader).
Best Free Tax Software
If you qualify for a free file, you need to be taking advantage of it. Unfortunately, free filing software is something of a unicorn. Only one company, Cash App Taxes, offers free filing for all users in 2022. But the two companies listed below have the most robust free filing programs this year.
If you think you “should” qualify for free filing in 2022, be careful. Read the section on maximizing credits and deductions as well. While many tax programs advertise free filing, most don’t deliver. You don’t want to start filing with one software only to be forced into an upgrade.
Side Note: Credit Karma Tax rebranded as Cash App Taxes – so if you’re confused on where Credit Karma Tax went, this is where you need to look!
Winner: Cash App Taxes
Why: Cash App Taxes is the only major software program that provides free state and federal filing for most tax situations. The semi-guided navigation and “freebies” like Audit Defense make Cash App Taxes software that’s tough to overlook.
Active traders won’t be happy to find that Cash App Taxes doesn’t have any brokerage integrations. But most other filers will enjoy the free price point and the excellent user experience.
Runner Up: H&R Block Free
Why: In 2022, H&R Block Online Free has an incredible user experience and an expansive definition of free filing. Filers can snap a photo of their W-2 and complete filing in just a few minutes. The Free tier also supports Social Security and unemployment income. It also supports the Child Tax Credit, the Earned Income Credit (EIC), education credits, and student loan interest deductions.
Unfortunately, not everyone will qualify for free filing with H&R Block. For example, those with daycare expenses or HSA contributions, rental income, self-employment income, or capital gains will have to pay to upgrade.
Best Tax Software For Maximizing Credits And Deductions
Historically, we’ve called this category the best software for itemizers. However, the 2019 Tax Cuts and Jobs Act led to fewer people needing to itemize.
Although few people itemize their taxes, many people still need to maximize credits and deductions. The tax software programs have managed to separate these people into a paid tier. The following situations offer opportunities to claim deductions or credits that don’t require itemizing:
- Paying student loan interest
- Paying higher education expenses
- Contribution to a retirement account
- Paying child or dependent care expenses
- Contributing up to $300 in charitable expenses
- Contributing to an HSA
- And more…
Tax filers regularly feel upset and cheated when they have to upgrade to pay to claim these deductions and credits. These two programs don’t force filers to upgrade to complete their tax returns and claim the refund that they deserve.
Winner: Cash App Taxes
Why: Cash App Taxes offers free federal and state tax filing for all users. The user experience is excellent and users don’t have to worry about paying for upgrades. This free filing software is ideal for users who need to maximize their refund, and have “slightly complicated” finances.
Cash App Taxes is our go-to recommendation for filers in 2022. It supports most tax situations (except K-1 income or multi-state filing).
Runner Up: FreeTaxUSA
Why: FreeTaxUSA offers free federal filing for all users but requires users to pay $14.99 per state. Despite the state filing fee, FreeTaxUSA is the quintessential bargain software. It’s relatively easy to use and it has an option to upgrade for Pro Support. This option means filers can ask a tax expert their tax questions before filing.
FreeTaxUSA is a bit clunkier than can be a bit more difficult to navigate compared with top-flight software (H&R Block, TurboTax, and TaxSlayer). That said, the price is right, and it’s easy enough for people with typical income and expenses.
Best Tax Software For Student Loan Borrowers
In the United States, the student loan interest deduction is an adjustment to income. That means you don’t need to itemize to claim it. While federal student loans have been on pause for all of 2021, tax filers with private loans continued to pay interest. These software packages allow filers to claim that deduction for free.
Winner: TurboTax Free
Why: In 2022, TurboTax offers free filing for anyone with student loan interest. Filers who qualify can snap a picture of their W-2, and upload the 1098-E Form from their student loan company. If they do this by February 15th, an Enrolled Agent will file taxes for them.
However, filers need to watch out for gotchas. If you paid for dependent care expenses, other education expenses, contributed to a traditional IRA or a Health Savings Account or had charitable contributions, you’ll want to skip TurboTax Free this year.
Runner Up: H&R Block Free
H&R Block continues to support student loan interest and other educational credits on its free tier. The easy-to-use software makes tax filing a snap.
However, filers need to watch out for gotchas. Most major credits and deductions aren’t supported at this level. People who contributed to an HSA, a traditional IRA, anyone with dependent care expenses, and those who made charitable contributions will need to upgrade.
Runner Up: Cash App Taxes
Cash App Taxes isn’t as easy to use as TurboTax or H&R Block. However, it supports more income and expenses and it is completely free. If you have self-employment income or other credits to claim, Cash App Taxes is likely to be better for you.
Best Tax Software For Cryptocurrency Traders
The IRS released guidance for cryptocurrency investments in 2014, but it only clarified guidance starting in 2019. The tax software systems are still playing catch-up to help crypto traders, and few seem to offer integrations that make tax filing easier.
While every tax software we reviewed had some basic questions about cryptocurrency, most did not offer easy integrations with crypto exchanges or wallets. Because of the lack of quality integrations, we declared one winner. We also reviewed a “helper” option that can help you file using any software.
Winner: TurboTax Premier
Why:
TurboTax makes it easy for Coinbase customers to import transactions into the tax software. Once you import your transactions, TurboTax does the math to help you declare profits and losses. You will need to upgrade to TurboTax’s Premier level to access this software.
As of this point in the year, TurboTax is the only major tax software service to create this partnership. You will need to upgrade to TurboTax’s Premier level to access this software.
TurboTax also allows users to upload spreadsheet versions of IRS Form 8949. Filers who use a tax liability calculator (such as the software listed below) will be able to directly import their reports into TurboTax.
Runner Up: TaxAct Premier
Why: TaxAct doesn’t have a lot of third-party integrations, but it has a “back door” method for calculating crypto-related capital gains. Filers can “attach” IRS Form 8949. Then they can summarize their total capital gains in a single line.
This admittedly feels like you’re purposely breaking the software, but it’s the method advocated by both TaxAct and the tax liability calculators.
Best Tax Liability Calculators For Crypto And NFT Traders
This is a new category in 2022. These companies aren’t actually tax filing tools. Instead, they calculate the tax liability associated with crypto and NFT activity (income and trading). These tools generate IRS Form 8949 which is required for calculating capital gains on trades. They also generate other reports for crypto income from staking, mining, and lending.
Winner: ZenLedger
ZenLedger offers both CeFi (Centralized Finance) and DeFi (Decentralized Finance) support. Its Free option supports up to 25 transactions.
The free offering is ideal for people who dabbled in a few trades over the last year. DeFi, staking, and mining income aren’t supported until the Premium tier which costs $149 per filing year.
Runner Up: CryptoTrader.Tax
CryptoTrader.Tax generates IRS Form 8949 created (necessary for filing crypto taxes). It also creates detailed reports that explain how it calculates total taxes due.
Once you have your form 8949, you can import the file into TurboTax or TaxAct. Traders with just a few trades may opt to manually transfer the trade information into another software (Cash App Taxes is an option here).
The “Day Trader” tier of CryptoTrader.Tax is designed for people with 100-1,500 transactions. At $99, this is a great deal. Right now, CryptoTrader.Tax has limited support for DeFi activity like NFT trading.
Runner Up: TaxBit
TaxBit offers tax liability calculations for tax time and more. The company’s real-time helps crypto traders see their full portfolio value and it shows the taxable gains associated with their trading activity. Traders who have struggled to stay on top of their taxable liabilities should consider TaxBit.
Best Tax Software For Stock Market Investors
Filers who only place a few trades per year have several tax filing options. For example, TaxHawk or Cash App Taxes can easily handle these situations. However, people who trade more than 100 positions per year will not want to manually enter their trades.
Our two preferred providers are the most expensive. However, they make tax filing simple for stock market investors. In this case, sometimes your time saved is worth the slightly higher cost.
Winner: H&R Block Premium
Why: H&R Block Premium allows users to upload tax forms from their brokerages. H&R Block will then use those forms to figure out the filer’s taxable income. It also imports up to 500 stock trade transactions per brokerage (1099-B Forms). Then H&R Block takes on the burden of calculating your capital gains taxes. H&R Block Premium isn’t cheap, but the time savings is well worth the price.
Runner Up: TurboTax Premium
Why: TurboTax offers similar functionality as H&R Block. It integrates with tons of brokerages which makes tax filing easy. The point and click interface offers superior usability compared to H&R Block’s interface. However, the enhanced usability fails to justify the higher price tag. Most users will save money by using H&R Block Premium.
Best Tax Software For Landlords
Landlords have some of the most complicated returns, along with business owners. Keeping track of income, expenses, and depreciation on a property can be tedious, but they are essential for tax time.
We look for software that makes calculating depreciation easy and allows for easy import of prior-year information to ensure continuity across returns. There’s also some preference given to software that allows filers to import from the previous year’s taxes. The prior year’s numbers help landlords see whether variances from the previous year’s numbers make sense or are due to miskeying information.
Winner: TaxSlayer Classic
Why: TaxSlayer Classic supports all major tax forms, including Schedule E for rental income. Landlords will appreciate TaxSlayer’s easy-to-use interface and the jargon-free articles that explain how deductions can be claimed.
Those who have specific questions can upgrade to TaxSlayer Premium to ask a tax professional how certain expenses should be classified. TaxSlayer supports competitor imports, and it has excellent summary sections that make reviewing easy.
Runner Up: Cash App Taxes
Why: Although Cash App Taxes is free, it has robust depreciation calculators that make claiming rental income simple. Landlords can use the guided interface to accurately claim legitimate deductions and depreciation.
Filers can also import prior year information from H&R Block, TurboTax, TaxAct, and Credit Karma Tax. This makes it easy to compare year-over-year claims.
Best Tax Software For Side Hustlers
This year, we’re separating side hustlers from small business owners because there is a difference we’ve been noticing in how returns can be handled for each. Side hustlers, in our tax definition, are people who are working in the gig economy or have small income from selling stuff online.
The interesting thing about side hustlers is that they use different expense tracking apps (like Everlance), and they may be eligible to file a Schedule C-EZ.
Winner: Cash App Taxes
Cash App Taxes allows side-hustlers to prepare their tax returns for free. While filers can’t import information, the software serves up helpful info bubbles throughout the software to smooth the tax filing experience. The free price tag and usability make Cash App Taxes a great choice for side hustlers who don’t have complicated expenses to handle.
Winner: TaxSlayer Classic
Why: TaxSlayer Classic gives users access to all tax forms. Given the low price point, and the extremely robust software, this is a great deal. Unfortunately, the Classic level doesn’t include Pro Support or Audit Defense. But it’s a great deal for filers who want a great user interface but don’t need the extras.
Don’t Forget About Bookkeeping Apps
No discussion about tax filing is complete without discussing bookkeeping apps. If you keep good records, it’s easy to file a Schedule C for your side business. The two apps that I use are Tiller Money (for expense tracking) and Everlance (for mileage tracking). If you don’t have a bookkeeping option, I strongly recommend these two apps.
Last year, we reviewed Keeper Tax for the first time. The text-message-based interface is perfect for people who hate bookkeeping. The $11 per month subscription includes access to a bookkeeper who manually reviews expenses for you. And at tax time, you can pay $39 for a summarized expense report.
Best Tax Software For Small Business Owners
Small business owners have a lot to think about when it comes to their tax returns. Beyond just entering income and expenses, there are considerations around business structure, asset depreciation, individual retirement plans, and more.
While many small business owners would likely benefit from an accountant, those that want to DIY it need to have software that is up for the challenge.
Winner: TaxSlayer Self-Employed
Why: TaxSlayer offers premium tax filing software at a much lower price point than H&R Block and TurboTax. Small business owners who need to categorize unique expenses can get on the phone with a self-employment expert.
TaxSlayer is about two-thirds the price of our runner-up and offers more valuable perks. It doesn’t, however, automatically generate W-2 or 1099-NEC forms for employees. Small business owners who need these forms may need to consider TurboTax instead.
Runner Up: TurboTax Self-Employed
Why: TurboTax boasts an easy-to-use interface and connectivity with Quickbooks. It also allows self-employed people to figure out the maximum contribution you can make to a solo 401k.
Unfortunately, one of our favorite freebies (free access to Quickbooks) is gone. Without this freebie, TurboTax Self-Employed isn’t quite as compelling as other options.
However, TurboTax Self-Employed allows filers to print Employee W-2 or contractor 1099-NEC forms. This makes it our top option for filers who have employees.
Best Value For Experienced Filers
Experienced filers don’t necessarily need guidance to get through their taxes. These filers may just need the forms and some calculators to help them through the tough parts. These are bargain software options for people who know what they’re doing.
Winner: Cash App Taxes
Why: Cash App Taxes is completely free and is an amazing software product for experienced filers and beginning filers alike. It’s not ideal for active traders, but most other filers will be able to use it.
The one drawback to Cash App Taxes is that it doesn’t cover all tax situations. If you moved in the middle of the year, or you have a K-1 form, or you have foreign investments, you’ll need to consider other options.
Runner Up: FreeTaxUSA
Why: FreeTaxUSA isn’t premium software, but it’s relatively easy to use. Plus, it offers access to all major tax forms. Federal filing is always free, and state filing costs just $14.99 per state.
The company also offers “Pro Support” as an upgrade. This allows experienced filers can pay to have their personal tax questions answered. Experienced tax filers will find that FreeTaxUSA’s organization will allow them to jump around and complete filing in short order.
Best Support From Tax Pros
Tax filing time can be a challenge, especially for filers facing new tax situations. Trying to figure out what you can legally deduct is important, but tax filers can end up overpaying to have pros file their taxes for them.
We’re recommending companies that offer “ask a tax pro” options for their online filers (sometimes called live assist). These companies allow filers to set appointments to get their personalized tax questions answered.
Winner: TaxHawk Pro Support
Why? TaxHawk’s Pro Support tier costs just $24.99. It involves unlimited phone, live chat, or screen share support with a tax expert. If you’ve got questions, these experts can give you an answer. TaxHawk’s pricing and support options are tough to beat.
Runner Up: TaxSlayer Premium
Why? TaxSlayer Premium is a moderately-priced software with massive value for filers looking for support. It comes with unlimited “Ask a tax pro” options where you can get support from a tax professional (either an enrolled agent or a CPA). It also comes with audit defense support and unlimited technical support.
Best Virtual Tax Preparation
Virtual tax prep was was rolled out a few years ago by a few of the leading tax software companies. But the service has become increasingly popular over the past two years since the pandemic began. Here are our two favorite virtual tax prep service providers for 2022.
Winner: TurboTax Full Service
Why? The TurboTax Full Service option gives users the ability to upload tax documents and have a tax expert take it from there. The pricing is as low as we’ve seen and the service gets rave reviews. If you prefer not to file your own taxes, take advantage of TurboTax’s Full Service option.
Promo: This option is free for qualified filers who complete their taxes by February 15th, 2022.
Runner Up: H&R Block Virtual
Why? Upload your tax documents to H&R Block through a secure online portal, and a CPA or Enrolled Agent will handle the filing from there. The software will even provide an estimated time until completion when you select your tax professional. You may need to answer a few questions via phone or email, but the process is simple compared with filing yourself.
Best For People Seeking A Tax Refund Anticipation Loan
If you need your tax refund to pay the bills, a tax refund anticipation loan may be on your radar. Unfortunately, too many lenders will charge high-interest rates to give you an advance for a few weeks. We don’t recommend a tax refund anticipation loan, but filers who qualify may appreciate TurboTax’s interest-free option.
Winner: TurboTax
Why: TurboTax is the only major filing company issuing Tax Advance loans this year. Filers can qualify for up to $3,000 in loans which will be available on a debit card within five to ten days of applying. Filers will be auto-approved assuming they file through TurboTax.
Here’s what you need to know about TurboTax’s advance:
- 0% Interest
- No Fees
- Ten loan amounts ($250, $500, $750, $1,000, $1,500, $2,000, $2,500, $3,000, $3,500, $4,000)
- Same-day approvals
- Advance is issued on a Credit Karma Visa®️ Debit Card.
What’s Changed In The Rankings This Year?
This year TaxSlayer and Cash App Taxes took over several places that were previously occupied by H&R Block’s paid products. In most cases, these swaps don’t indicate that the newcomer is superior in every way to H&R Block. Rather, they indicate that the new product offers a good experience at a better price point.
The second major change is the addition of the best tax liability calculators for crypto and NFT traders category. The tax filing companies aren’t building out APIs to calculate price changes for tax filers. For the foreseeable future, crypto tax filers will need to calculate their tax liability on their own. These calculators make it much easier to calculate tax burdens from crypto activity.
Final Thoughts
As you can see, there is no “blanket” best tax software. It all depends on what you have on your tax return. Each software program tries to pick a niche and own it.
Given that we’ve had another strange year, it’s no surprise to see big shake-ups among the superlatives. We’re excited to see more bargain software companies take home the “best” options this year.
Also note: prices and deals change all tax season. We try our best to assess, but things do change as the tax season goes on. So, if you see any changes, please let us know in the comments below!
The post The Best Tax Software 2022: What’s The Best Tax Program For Me? appeared first on The College Investor.