How to choose the best tax software for you in 2024

Two tax experts share how to use tax software efficiently.

March 18, 2024, 10:54 AM

Navigating tax season can feel daunting, but with the convenience of at-home tax filing software, the process can be easy.

With deadlines quickly approaching, harnessing the power of tax software from TurboTax, H&R Block or Jackson Hewitt can offer a quick and user-friendly approach to managing your finances. ABC spoke to a few industry experts to delve into the benefits of using tax software, how to choose software that is right for you and some general financial tips to help you along the way.

Our tax experts

First is Henry Grzes, lead manager for Tax Practice & Ethics with the American Institute of CPAs.

“Everybody has the responsibility of filing their return, and there are multiple software choices and ways to do that,” Grzes told ABC. “Including the IRS free-file option.”

(If you are interested in using this option for federal filing, visit IRS.gov for more information on eligibility.)

ABC also spoke with Emily Irwin, head of Advice Relations for Wells Fargo.

“Tax software can be a great resource if you want to DIY this tax season and need some guidance to file your taxes," she said.

Benefits of using tax software

“One huge benefit of tax software programs is the ease of compiling information," Irwin said. "This can be especially true if you are employed, receive a W-2, and have traditional investments that generate capital gains, losses and dividends.”

Irwin also notes this will give you a better understanding of your assets. “When you are filing your return, you will start to think about wages versus investment income and credits versus deductions,” she added.

“This knowledge can help you immensely because you can use it to plan as you make future financial decisions intentionally.”

There is also the convenience of having an online record of your tax returns that you can download if you need to reference them later.

How to choose the right software

Grzes told ABC that you want to ensure the software you choose to work with can provide you the assistance you need to file efficiently. “As someone who's submitting their return, there will be different levels of cost, depending on what the complexity of your return is and how much assistance you're going to need," he said.

For example, if you choose to file “with a pro” either online or in person with H&R Block, that is an additional cost.

"Tax software programs will typically prompt you throughout the process to remind you of life events that could affect your tax situation and take a systematic step-by-step approach to your tax preparation,” Irwin said.

Examples may include buying or selling a home, having a child, donating money or property to charity, and medical costs.

“Most of us can’t remember what we had for breakfast that morning, much less what life changes occurred in the prior calendar year that may affect our tax filing,” Irwin said.

After the first year of filing, you might need less help from the professionals offered with each of the software programs, Irwin said. “In future years, tax software programs will pre-populate your employment information and financial institutions, which may allow you to automatically pull in your information from those companies as opposed to manually entering that information.”

How to find deals on tax software

Irwin advised if you are filing at home to be on the lookout for deals and discounts on software. She added that these can be offered by your employer or credit cards.

“Also, take advantage of filing electronically -- this will usually expedite the process of receiving any refund, if applicable, which can be deposited directly into your bank account,” Irwin added.

How to make sure that your information is secure

“It's normal due diligence when you have a treasure trove of personal information online whether it be banking, cash transfers or filing your taxes to do your research on the software best practices in security,” Grzes added.

For example, the TurboTax website states, “You can securely access your account by entering your password and a unique, single-use code we'll send to your verified device or email address, authentication application; or answer a series of questions.”

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