Best Tax Preparation Software in 2020

Best Tax Preparation Software iMore 2020

• Best Overall: TurboTax Deluxe + State
• Best Value: H&R Block Deluxe + State
• Federal Only: H&R Block Deluxe
• Investment Income: TurboTax Premier
• Business Taxes: TurboTax Home + Business

Best Overall: TurboTax Deluxe + State

For most people, TurboTax Deluxe + State is the only tax preparation software you need. This program walks you through each step and explains the information you need to enter from your W2, 1099, and 1098. You can import these forms from digital files and tap into prior years' tax information to make it easier to fill out this year's forms.

This tax prep program supports simple business deductions, like those for ride-share and home-bases business expenses. It also applies child and education credits, mortgage interest and property tax paid, and some retirement income credits. You can file up to five federal returns electronically with TurboTax Deluxe and prepare paper returns for state and local city taxes.

This tax software comes with one state of your choice, though you can pay for additional states if you need to add them. Also, you will need to pay an additional fee for each state return you want to electronically file through TurboTax. Foreign taxes aren't supported by this program, only domestic taxes. Also, while you can claim some simple business deductions, most small business expenses and investment income can't be declared with this program. TurboTax does have additional programs for these tax situations, though.

Best Value: H&R Block Deluxe + State

H&R Block Deluxe + State lets you electronically file five federal returns, which is handy if you have multiple people you need to help file, or if you find yourself needing to file an amended return. It has over 13,000 articles with information about each line of every supported form to help you if you get stuck. This includes the Schedule A for any itemized deductions.

H&R Block Deluxe + State does support investment income including 401k contributions, stock dividends, home sales, and social security income. It also looks for deductions and credits for children, education, and some home business expenses like a home office. Most business expenses, however, much be filed using a program specifically designed for small business owners.

This tax preparation software comes with only one state, but you can purchase additional states if you need them. If you live in a state that has local taxes that should be filed, H&R Block will help ensure these are formatted correctly to be submitted. You cannot use one of the five electronic returns to file a state return. You will need to either send a paper copy in the mail or pay an additional fee to e-file it through H&R Block.

Federal Only: H&R Deluxe

If you live in a state like Florida, Texas, or Wyoming that doesn't have a state income tax obligation, you don't need to pay for an all-encompassing program. H&R Block Deluxe has federal tax preparation, and you can choose to download the program directly to your Mac, or have a CD sent. This program lets you import W2s, 1099s, and 1098s directly into the program, or tap into previous year filings so help fill in this year's forms more quickly, even if you used another program last year to prepare your taxes. All you need to do is drag and drop the file into the program.

This Deluxe program supports income from home-based businesses, stocks, retirement funds, and home sales, so you don't have to look for another program for these common tax situations. However, if you are a small business owner with several vendors, contractors, or employees, you will need to file using a small business tax preparation program in order to access the correct forms and maximize your return.

Investment Income: TurboTax Premier

TurboTax Premier is designed to help you with all taxes that are affected by investment income. This includes stocks, bonds, and mutual funds and interest earned in both traditional investment accounts and in retirement accounts. TurboTax includes an IRA investment tool to help you determine if you need to make any changes to your investment account to avoid paying higher taxes and receive more money in your retirement years. Premier also looks at income from rental properties and is especially helpful if you are filing as a beneficiary of an estate or trust.

This tax preparation program looks at over 350 tax credits and deductions to help minimize your overall tax burden and maximize your return. Some of these credits include energy-efficient improvement credits, plus credit for mortgage insurance and property taxes paid. This is all in addition to the federal and state forms, help and e-filing capabilities for personal income taxes. While TurboTax Premier is one of the most expensive tax preparation software programs, it does come with several tools to help you file regardless of your personal income circumstances. It doesn't, however, support small business taxes. You will need another program for preparing these.

Busniess Taxes: TurboTax Home + Business

This is the program is the best if you have any income from a business including self-employment, contractor and freelance work, or as a small business owner. The program syncs with popular payroll and finance programs, like QuickBooks, to make it easier to import information to get the most deductions and credits. The itemized deduction tools give you the greatest returns while keeping your overall tax obligation low, and TurboTax taps into several hundred possible credits and deductions available to you. And because this is the ultimate tax preparation program, you can also use it to file your personal returns, including investment income and state returns.

You can e-file up to five different federal returns, including amended returns. However, you do need to pay extra to electronically file your state forms. You do have the option of printing off completed state returns and sending them in yourself as many times as you need to for free.

When it comes to taxes, go with what works

TurboTax is a staple for preparing taxes, and its programs are so comprehensive and tend to bring the greatest returns. It's Deluxe + State program works with its online program to provide e-file for easier submission and a quicker return. You can submit five returns electronically and as many paper returns as you want. And if you live in a state, such as Michigan, Pennsylvania, New York, or Ohio where city income tax is common, TurboTax will help ensure those are properly declared, too.

When I've worked with self-employed and small business taxes, TurboTax has always found the most deductions and credits. Plus, it syncs well with financial and payroll programs to seamlessly transfer information directly into its programs to make it much easier to stay on top of deadlines and ensure forms are filled out properly.

Credits — The team that worked on this guide