If you want to use one of the “big two” providers (TurboTax or TaxCut), then the cheapest and most comprehensive way to go is TaxCut’s Premium + State + E-file Online” (that’s the actual name; awkward and non-sexy, but descriptive). At $39.95 out the door it covers everything from bare-bones tax returns to investments and real estate, to business ownership. Oddly enough it’s actually cheaper out the door than the TaxCut “Basic + E-file Online” at $50.85.

If you don’t care about using one of the big two providers, the TaxActOnline.com “Deluxe + State” offering is the cheapest out the door at $15.95. Considering that some of the offerings I looked at were as high as $134.80 (for TurboTax Premier Software) without any significant value add, that’s quite a dramatic spread. With the confusing way offerings are communicated, it would be easy for someone to pay over $100 too much.

Filing only federal taxes (no state taxes or preparing state taxes by hand)

If you only need to prepare and e-file federal taxes (maybe your state doesn’t have income tax) the best choice is TaxCut “Basic + E-file Online” for $9.95 OTD if you want to go with a major provider. If you’re ok with a smaller company it’s hard to beat TaxActOnline’s “Standard” account for $0 (including e-file). I’m not sure how they offer it for free but they seem to be a perfectly legitimate company and have been around since 2000 with an alexa rank of about 182,000 (and quickly improving).

The details

TurboTax Pricing

The big travesty with TurboTax is that the software version costs way more than the online version because e-file isn’t included in neither the federal nor state programs. And each e-file costs $14.95. The online versions include e-file in the price. Bottom line: Use the online version.

TaxCut Pricing

TaxCut provides the cheapest out-the-door offering of the “big two” companies Intuit and H&R Block. TaxCut “Premium + State + E-file Online” gets you all you need for only $39.95. The crazy thing with TaxCut is that the OTD price actually decreases as the offering tiers increase. Go figure.

TaxBrain Pricing

I didn’t find anything particularly compelling about TaxBrain. Their site was one of the worst in presenting basic offering information. But I did use their online chat twice and they were helpful enough.

*You don’t know the final price of state taxes until you actually prepare your them. You also don’t sign up for a particular account tier. As you answer the questions the program will figure out what tier you’re in.

CompleteTax Pricing

It turns out Complete Tax and the next provider EZ Tax Refunds are owned by the same company. I’m guessing it’s a market test to see how they can maximize revenue targeting different markets.

EZ Tax Refunds Pricing

TaxActOnline Pricing

Differentiating Features

Overall, TurboTax and TaxCut really do have some nice value-added features that may justify the higher cost depending on your situation. If you’re looking for audit support, TaxCut is supported by hundreds of establish brick and mortar H&R Block locations. TurboTax will provide a “local tax professional” in case of an audit, but who knows where they find the tax professionals. You could end up with crummy under-qualified representation. At least with H&R Block, there’s some quality control.

I was going to post a comparison of features across the providers but it was seriously too much. It seemed like on every point I had to dig and dig to find a decent answer, if I found one at all. In the end they all seemed about the same as far as basic tax-prep features. However, if you have special needs it’s worth spending a little more time to find just the right provider. Here’s a list of the types of features and variations to consider:

• Audit Support (cost, who does it, extent of support and representation)
• What guarantees do they make and what are the terms?
• Guaranteed maximum deduction (what are the terms of the guarantee?)
• Accuracy of calculations (almost all offer this)
• “Biggest tax refund or your money back” (this was a TurboTax guarantee)
• Deduction finder. If you are itemizing, you want to make sure this feature is offered. It’s implied that they all do. However, some made it more obvious than others.
• Can you start a tax return without paying money? All of the providers will let you jump right in and start preparing your taxes without paying. Some make you register first and you inevitably have to provide your social security number at some point in the process. Most of the providers also show your refund as you go. If you wanted, you could prepare your taxes in a couple different programs and see which one provides a larger refund before deciding on a final provider.
• Support. This varies widely. Some provide full support while others make you pay per conversation. With the lesser known companies, it was also hard to tell if the support was for the software or actual tax advice so be careful. If it’s not explicit, I would contact them and ask.
• Import capabilities. TaxCut and TurboTax both seemed to have pretty wide import compatibility with financial software providers. TaxCut even lets to import a previous tax return from a brick and mortar H&R Block location. If you have special import needs, I would contact the provider to be safe.
• Refund options. Most providers offer “quick refund” type loans which I don’t recommend. You’ll likely be charged a healthy fee for the loan in addition to interest (completetax.com charges $14.95 for this feature). It’s also pretty standard to be able to pay for the tax software directly from the refund so there are no out-of-pocket expenses.
• Options to pay taxes owed. Some providers will let you pay taxes owed with a credit card. Beware of extra fees.

Confusion and Conclusion

Here were a few of the bewildering points I came across:

• While several companies had little charts comparing their offerings, they were, without exception, incomplete. In every case I had to track down vital additional pieces of information. There’s no reason I could see why they couldn’t have included all the important info in one spot.
• Midway through my research on TurboTax the prices of their account tiers changed on me. At least they went down instead of up. I did an online chat and was never able to figure out why they changed.
• One of the most hidden pieces of information was how much e-file costs and if it’s included with various account types. I had to search FAQs and knowledge bases to find the answers. I actually had to chat with TurboTax and TaxBrain to finally find and confirm their pricing for e-file. I guess the upside is that both online chats were friendly and useful.
• While researching CompletTax and EZTaxRefunds, I started to notice that much of their content looked the same. I did a little research and sure enough they’re both owned by the same company. I guess there’s nothing wrong with that, it just struck me as odd.

Overall, I was shocked at how confusing this process was. Taxes are already confusing enough. I don’t need the added confusion of piecing together the tax preparation offerings. Kudos to the smaller CompleteTax, EZTaxRefunds, and TaxActOnline for providing simple, straight forward offerings. The big players TurboTax and TaxCut should take note. In the long run I doubt they will benefit financially from confusing their customers into submission. If anything I anticipate there will be a lot of unhappy customers once they have to keep paying unexpected e-filing fees.

Do you know about any other tax software comparisons or reviews? Leave them in the comments.