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Do your own taxes 2018

The best (and cheapest) online tools.

There's just no doubt about it: your taxes are going to cost you this year.

Whether it's time or money or -- more likely -- both, tax preparation inevitably requires some kind of investment. Unless you're willing to pay a fine or go to jail, your decision boils down to outsourcing the process to a pricey CPA or tax professional or taking up the helm yourself.

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If you take control of your own destiny, you'll want to explore the marketplace of online tax prep tools. The good news is that the 2018 versions of these services, collectively, are relatively affordable, reliable and easy to use. And, bonus: depending on your financial situation, you may be able to use one of them to file for free.

There are at least a dozen established online tax prep services, and the IRS has compiled a list of providers that will help you prep and file online for free. That noted, each has its own eligibility requirements with regard to income, age and residency. Generally, if your adjusted gross income for 2017 was $66,000 or less and you have a relatively simple tax situation, you'll be able to file your federal return for free. Some services may also let you file your state taxes for free, though most of them charge between $20 and $30. 

A few things to look for

Auto-import. Some can automatically import W2 information directly from an employer (you'll need to provide a tax ID and other information) or from a photo of a physical tax document.

Cloud-syncing. All of these services store data in the cloud, so you can save your work on your PC and seamlessly pick up where you left off using your phone's Web browser -- or, in some cases, an app.

Guarantees. Any service worth its salt will guarantee accuracy, and most will refund any penalties attributable to a calculation error. If you're skeptical about whether you've captured all of the deductions you're due and decide to get a second opinion, Intuit, H&R Block and some others will refund the price of the software if you get a more advantageous return prepared elsewhere. In the event of an IRS audit, they will offer free support and guidance from a human tax pro.

Searchable Q&As. Many of these services provide access to a deep database of user-generated questions (common and obscure) and credible answers from tax pros. 

Don't upgrade until you have to 

The nice thing about most of these services is that you pay only when you're ready to file, so you can test-drive them before pulling the trigger. But take heed: some of them aggressively market themselves as free but will try to steer you into a more premium tier of service later in the game. According to an analysis by The College Investor, the only prep services that truly offer a free filing option are 1040.com, Credit Karma Tax, EZTaxReturn.com, FileYourTaxes, FreeTax.com, H&R Block, TaxAct, TaxSlayer and TurboTax. 

OK, the tax deadline (in most states) is now less than 50 days away, so let's take a quick look at some of the options.

The best online tax tools

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H&R Block

H&R Block

Why we like it: Very solid usability, navigation and functionality -- even for users of the free tier of service

What's missing: Access to guidance for business owners and investors limited to paying users 

A big player in the tax business, H&R Block complements its more than 12,000 retail locations with an online version of its tax prep service. It's free to use if your 2017 adjusted gross income was $66,000 or less, you were on active military duty or you qualify for the Earned Income Tax Credit. Otherwise, it's services are slightly less expensive than the equivalent editions of TurboTax -- pricing for H&R Block's online service starts at $30 for a federal return and $37 for a state return. And H&R Block offers a downloadable version that's more expensive than the online edition, but which can be used to file up to five federal returns.

Learn more: hrblock.com

TaxAct

Why we like it: Addresses everything needed to file even a complicated return for a low price

Tax Act

What's missing: Isn't always as easy to use as more expensive services

TaxAct has a lower adjusted gross income threshold to use its free version ($53,000) unless you're active military. But the paid versions are very competitively priced, starting at $30 to file a federal return and $37 for a state return -- and the $60 premium edition, which includes all of the bells and whistles, including support for the self-employed and business operators, is considerably less expensive than comparable tiers of service from TurboTax and H&R Block.

Learn more: taxact.com

Tax Slayer

Why we like it: Delivers the fastest refund through its anticipation loan program

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Tax Slayer

What's missing: Lacks the excellent FAQs and community-generated discussion found on other services 

Besides the cool name, Tax Slayer's primary competitive advantages are low fees and its unique tax refund anticipation loan, which offers a free refund advance of $500 or $1,000 if you use one of its paid tiers of service. Though it's not as slick as TurboTax or H&R Block, and doesn't offer the same breadth of data import options, it provides flexible and guided navigation, easy access to support from tax pros and supplements its FAQ articles with solid video tutorials.  

Learn more: taxslayer.com

DIYTax (aka FreeTax) 

Why we like it: 100 percent free for filing both state and federal returns

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DIY Tax

What's missing: Lacks the polished navigation and guidance of other services

True to its former name (FreeTax), DIY Tax offers completely free federal and state filing. Liberty Tax, which has more than 4,000 retail locations in the US, underwrites the site but has a much gentler self-promotional touch than H&R Block. The site's navigation options and user interface aren't as polished as some of the other services -- you get what you pay for, after all -- and there isn't a great deal of explanatory text or content supplied to inform decision-making. As such, this one is best suited for folks with some experience preparing their own taxes.

Learn more: freetax.com

TurboTax

Why we like it: Offers best-in-class usability, access to guidance and answers to questions

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TurboTax

What's missing: Free version not as robust as competitors'

Perhaps the best known online tax platform, TurboTax offers an intuitive interface and a robust database of tax questions and answers. Though there's a free version, TurboTax Absolute Zero, those with a more complicated tax situation (or an annual income that exceeds the free threshold), will need to shell out for one of the pricier options.

In addition to the basic, free version, TurboTax offers four online options. The Deluxe package, which now costs $60, helps you itemize deductions -- which can be a lucrative strategy for property owners and mortgage holders. The $80 premier edition brings in tools to help you report on more sophisticated real estate transactions and calculate capital gains or losses from investments like stocks, bonds or cryptocurrency. If you own or operate a business, you'll likely need to step up to the $120 self-employed package with guidance and features for contractors, freelancers and owners. If you desire additional hand-holding, TurboTaxLive offers unlimited, on-demand, real-time expertise from a pro for $180. Regardless of which service you use for your federal return, TurboTax charges $40 to prepare and file state taxes.

Learn more: turbotax.intuit.com

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