Filing Taxes: Which Online Service Should I Use?

Tyler Dolan

By Tyler Dolan
Tyler is a CERTIFIED FINANCIAL PLANNER™ practitioner who believes financial education can empower people to reach their goals.
Posted on 02/07/2018

Tax season! For accountants, it’s the most wonderful time of the year. For the rest of us, it’s … sometimes a challenge. You’ve sifted through the mail, and finally got that one last document needed. You’ve read our blog post by Karen Carr Brady, CFP®, on whether to call in an accountant or go DIY. And you’ve decided to go DIY. Great! You’re ready to file your taxes. What’s next?

What are my Options to File Taxes Myself?

You have two: the old-fashioned way (e.g., using pen and paper, then mailing your tax return to the IRS) or using IRS e-File (aka filing your tax return using an online service).

File by mail

If you want to nerd out with old-school forms, go for it! You’ll need to print out the IRS Form 1040 (and any other forms you need), gather all your documents, fill out each form according to the instructions, do the math, and mail it off to the IRS.

Keep in mind that if you DIY this way, you’re at a higher risk for errors that could cost you. (No offense, online tax programs have algorithms to check for errors that your brain just doesn’t have.) You’ll also be at a higher risk for identity theft: Believe it or not, filing online is safer than putting documents including your Social Security number in the mail.

File online

I’m willing to bet you’d rather go the online route. It’s not always a piece of cake to file online, but it’s certainly a lot easier and more efficient than filing on paper. If you Google “file taxes online” you’ll see there are tons of options out there. It can be overwhelming, but don’t panic!

Which Online Tax Preparation Software Should I Use?

You don’t have to research each online tax service to figure out which is best for your situation (and wallet). I did it for you! I compared four of the most popular online tax services: TurboTax, H&R Block, TaxAct, and Credit Karma.

My methodology: First, I took a deep dive into each provider’s pricing structures and features. Then I put each to the test.

I put together a simple profile of a common tax filing situation and ran it through each service as if I were filing the tax return for myself. I wanted to test the user experience, as well as the accuracy of the results.

Here’s the profile I used:

  • Single: Filing Status
  • 0: Number of Dependents
  • $60,000: Gross Annual Salary
  • $3,000: Pre-Tax Retirement Contribution (Box 12)
  • $57,000: W-2 Wages (Box 1)
  • $7,250: Federal Tax Withholdings (Box 2)
  • $3,720: Social Security Tax (Box 4)
  • $870: Medicare Tax (Box 6)
  • $2,800: State Tax (Box 17)
  • $2,000: Student Loan Interest Paid
  • $10,000: Mortgage Interest Paid
  • $5,000: Property Taxes Paid

I chose this profile because I wanted the tax program to recommend I itemize my deductions. Why? I wanted to see how “smart” the tax program was, and I found that the majority of the programs charged more any time “Schedule A” (the form used to itemize deductions) is used.

Any time your itemized deductions are greater than the standard deduction ($6,350 for tax year 2017), it typically makes sense to use your itemized deductions. It results in a lower “taxable income” (e.g., less owed or a higher refund). In this case, the mortgage interest, state and property taxes would be included as itemized deductions for a total of $17,800, which is much higher than the 2017 standard deduction.

So, how did the online tax software providers do?


User experience

TurboTax had my favorite user experience. It was simple to use and I was never confused by the program prompts. I especially loved that the program always checked in with me to make sure I knew why it was asking certain questions and whether I wanted to learn more about the calculations. There was a built in tax education experience that I didn’t find with any of the other services.


TurboTax is pretty savvy: You can import PDF copies of previous year’s tax returns, which makes it easier for the program to ask the right questions for this year. You can also snap a picture of some of your forms and the information will automatically upload into the right places. They also have a pretty robust mobile app—you can complete your return and electronically file right from your phone. Most importantly, though, TurboTax offers a 100 percent accuracy guarantee. So if you pay a penalty or interest because of a TurboTax calculation error, they’ll pay you back.


TurboTax correctly calculated my federal tax refund to be $2,740.


TurboTax has a few different tiers of services. Basically, the more forms that you need to use for your tax return, the higher the cost. Pricing options range from $39.99 to $149.99, depending on the complexity of your return, the number of forms required, and any additional features you choose.

One of those new features this year is to use a tax professional (a CPA or an Enrolled Agent) as a resource while you work through your return and for their professional review when your return is completed.

Note: You can actually file your taxes for free if you only need the Form 1040EZ (the simplest federal tax return, which you may be able to use if your income is less than $100,000, you don’t have any dependents, and your filing status is single or married filing jointly), or the Form 1040A (which has similar requirements as the 1040EZ but is a bit more robust).

All in all, filing my tax return with TurboTax would have cost me $76.98. Since I needed to use Schedule A to itemize my deductions, I would have needed to upgrade to their Deluxe version ($39.99). I also would have needed to pay the $36.99 for my state return, since I used the full Form 1040 for my Federal return.

H&R Block

User experience

The user experience of H&R Block’s service was pretty good. I noticed the experience actually improved from last year. It felt much more intuitive and it was easier to navigate back and forth if I needed to make edits. The program also asked me the right questions and I never got confused.


H&R Block had all the features I expected. It also had a nice mobile app where I could complete my return and check in for status updates. H&R block also included an accuracy guarantee. They’d pick up the tab if there were any calculation errors on their part. They’d also refund any fees paid to any other service if I was able to find another program that resulted in a larger refund (or smaller liability).

H&R Block has a great feature that I wasn’t able to find anywhere else: brick and mortar locations. If you prefer a face-to-face experience, you can walk into any H&R Block location and review your online tax return with one of their tax professionals.


H&R Block correctly calculated my federal refund to be $2,740.


H&R Block also has a few different tiers of services, ranging from $34.99 to $149.99. Again, the more forms that you need to use for your tax return, the higher the cost. Using the Form 1040EZ and the 1040A are free to file. H&R Block also offers a free deal if you need to use the full Form 1040 and Schedule A to itemize your deductions. H&R Block is also offering a “Pro Review” this year which costs an extra $89.99. They don’t make it clear, however, what qualifications the “pro” has. TurboTax makes it very clear that their experts hold their CPA or Enrolled Agent licenses.

Your state return would be free if you used the Form 1040EZ or Form 1040A for your federal tax return. For all other versions, your state return will cost you $36.99.

All in all, filing my tax return with H&R Block would have cost me $36.99. My federal return would have been free, but I’d still have to pay the $36.99 for my state return.


User experience

I considered TaxAct’s user experience to be inferior to the others I tested: It was difficult to go back if I needed to make edits, and it felt like I was stuck in a standard line of questioning. The other programs knew to avoid certain subsets of questions based on what I had entered before, but TaxAct went through a lot of nitty-gritty details that didn’t apply to me. They did, however, add a new feature this year that I liked. They gave me the option to enter my W-2 information into a form that looked just like the W-2 I received in the mail. I’m a visual learner, so it made it a lot easier for me to enter my information rather than cross-referencing the W-2 box numbers.

Ultimately though, I was able to do what I needed to do. TaxAct also did not provide any tax education services.


TaxAct had similar tech features as its competitors, a mobile app (somewhat less user friendly), and an accuracy guarantee. They’d pay for any calculation errors.


TaxAct correctly calculated my federal refund to be $2,740.


TaxAct also has a few different options, ranging from $29.95 to $59.95; using the Form 1040EZ and the 1040A are free to file.

Your state return would be free if you used the Form 1040EZ or Form 1040A for your federal tax return. For all other versions, your state return will cost you $37.

All in all, filing my tax return with TaxAct would have cost me $66.95. My federal return would have run me $29.95 because I needed to use Schedule A, and I’d have to pay the $37 for my state return.

Credit Karma

User experience

Credit Karma’s tax preparation site is very well designed, and I felt like the program was understanding me as I walked through the process. I was easily able to navigate through different parts of the experience when I needed to make edits, and I wasn’t barraged with inapplicable questions. (No tax education within the experience, though…only on their blog.)


Credit Karma has stepped up their tech savviness this year too. Last year, I couldn’t upload prior year returns or take a picture of my W-2, but this year that’s an option. They also have a new mobile app available and a new refund guarantee in place. They’ll pay the difference if you find another tax service that finds you a better tax refund, but they don’t offer a professional review yet.


Credit Karma correctly calculated my federal refund to be $2,740.


I’m sure you’ve seen the commercials. Credit Karma claims to offer free tax filing services. And it’s true. Using the 1040EZ & 1040A—free. Using the full 1040 and itemizing deductions with Schedule A—free. Need to use Schedule B, C, D, and E? Free. It’s even free to file your state return.

So, Which Online Tax Software is Right for Me?

Unfortunately, I can’t give you a straight answer. It depends on your situation and your budget.

If you value a face-to-face experience, go with H&R Block. You may feel more comfortable having a professional guide you through the process. (And the cost probably won’t bust your bank account.)

TaxAct is certainly going for the more low-fi approach. The user experience probably won’t wow you, but you might save a few bucks depending on which version you need.

Credit Karma, of course, sounds great because it’s totally free and I couldn’t pinpoint any weaknesses besides having no option for a professional review. But remember, I used a very simple tax situation. This is only Credit Karma’s second year offering their tax services, so there may be some tax situation they’re not prepared to handle.

TurboTax was certainly the most expensive option. So it’s up to you: Are the education services, guarantee, and features worth paying more? Or are those not necessary for your situation? Maybe you really value the peace of mind of having a certified professional review your tax return before you file it. Maybe you’ve filed a few years’ worth of tax returns with TurboTax, and it’s just more convenient to use a program that already knows your situation. It might be worth the extra cash so you don’t have to start from scratch.

Whatever you decide, you should feel good that you’re taking tax matters into your own hands!