Best Tax Software for 2025

Why Trust Us

Investopedia researchers collected data on 46 factors from each of seven popular tax preparation software applications. We used this information to evaluate each application on price, tax-related help and assistance, ease of use, and more as part of our mission to provide unbiased, comprehensive reviews and help readers make the right financial decisions. Investopedia launched in 1999 and has been researching and evaluating tax preparation software since 2021.

How Does Tax Software Work?

Tax software are computer applications that allow taxpayers to import or manually enter the information needed for filing an electronic or paper tax return with the IRS. Some tax software programs are free, but others may cost more than $100, depending on the complexity of your taxes, whether you want add-ons, or if you pay state tax filing fees.

With a tax software program, taxpayers upload forms, like their W-2s and 1099s, and answer questions about their finances. The program then completes the necessary calculations for them and electronically files their taxes.

When you electronically file, you’ll also receive your refund quicker than if you file through the mail. It will typically take less than three weeks to receive your refund and even less time if you opt for direct deposit.

Who Should Use Tax Software?

Ultimately, how you choose to file your taxes comes down to your needs, preferences, and budget. 

Tax software is best for taxpayers who don’t have a complicated tax return and seek a cost-effective, straightforward way to file their federal and state taxes.

For example, if you’re a salaried worker with a W-2 and just a 401(k), you might opt for a tax software, especially if you’re ineligible for free programs like Free File. Plus, if you’re willing to pay extra, tax software also offers various features–like the ability to chat with a tax expert—that some taxpayers may find useful.

Alternatives to Tax Software

Taxpayers generally have a few options when filing their taxes, but some may not be available to everyone.

Free File

Some taxpayers may be eligible for Free File, which is free online tax software that’s available to taxpayers who have an annual gross income (AGI) of less than $84,000. Free File is a public-private partnership between the IRS and eight tax preparation companies. 

With Free File, taxpayers can file their federal tax returns for free, but may pay an additional fee for state tax returns, depending on the company.

Direct File

In 2025, some taxpayers may be eligible for Direct File, a program that allows people to file their federal taxes online directly with the IRS. However, the program is only available to select taxpayers in 25 states. 

Taxpayers with more complex returns—like those who itemize their deductions or earn income through the gig economy—are not eligible for Direct File. There’s also an income cap for Direct File eligibility.

This program does not prepare state tax returns.

Tax Professional

If you need additional help filing your taxes, want to save some time, and can pay more, hiring a tax professional can be a good option. 

There are tax software options for taxpayers with more complex returns, but some may find that a tax professional can provide better guidance or advice, especially if you itemize your deductions, are self-employed, or have multiple sources of investment income.

When you’re looking for a tax professional, make sure they’re qualified. The IRS has an online directory of professionals with preparer tax identification numbers (PTINs), a credential designated by the IRS for tax preparers.

Hiring a tax professional, like an accountant, can come at a cost, too, so be prepared to pay extra for their expertise.

Paper Return

Taxpayers can file a paper tax return, but this may be time-consuming and complicated. Unlike tax software, which enables taxpayers to upload documents and completes calculations for you, people may be more prone to errors when filing a paper return.

Plus, it can take up to six weeks to process a paper return.

“The IRS encourages people to file their tax returns electronically and choose direct deposit for more secure and faster refunds… Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information,” the IRS states.

How We Choose the Best Tax Software

Investopedia is dedicated to providing readers with unbiased, comprehensive reviews of financial products and services. To evaluate and rank tax preparation software, Investopedia researchers collected data on 46 factors from seven tax software providers—322 data points in all. Next, we generated star ratings for each software package using a robust scoring model, with weighted attributes reflecting the features most important to users. We grouped those criteria into five broad categories:

• Cost (Federal and state filing cost): 17.00%
• Ease of Use (User experience, data import, calculators, and tools): 23.00%
• Tax Assistance and Customer Support (Help channels, support hours): 26.00%
• Accuracy and Audit Assistance (Forms coverage, accuracy guarantee): 12.00%
• Additional Features (Mobile app, refund options, shopping experience): 22.00%