Does tax time have you breaking into a cold sweat? The United States tax codes are some of the most complex in the world, and they change slightly every year. No matter whether you're an employee with a simple return or a business owner with multi-state forms, the filing process can be daunting.
Jackson Hewitt and TurboTax both offer software that allows online filing. It's a great way to simplify the tax process. Each has a free plan for simple returns along with higher-priced plans for more complex tax situations.
I've taken a look at where each service excels, and where they don't perform as well.
Overview of Jackson Hewitt and TurboTax
Shared Features
Unique Jackson Hewitt Features
Unique TurboTax Features
Free Plan
Jackson Hewitt
Jackson Hewitt offers free tax filing for simple returns. To qualify, you must meet the following criteria:
Your W-2 can be downloaded or imported. This helps to streamline the process, since the software will automatically populate your tax return with the required data fields.
Throughout the process, the software asks clear questions regarding your return. At the end, it creates a fully finished form.
If you need a little extra assistance, but you don't need a CPA to walk you through the entire process, there's a live online chat to help with any software issues. You can connect to the customer service center during business hours each week.
TurboTax
The TurboTax free plan also allows free online filing of simple tax returns. There's a guarantee that you'll get your maximum return.
One of the helpful aspects of this software is that it teaches you important things about taxes like how to determine who qualifies as a dependent. If you have tax credits and deductions that can be claimed without filing additional forms, TurboTax will help.
That means that you can get the child tax credit and Earned Income tax credit without needing to upgrade to a more complex plan.
If you've used TurboTax in previous years, your prior return information can be transferred for free. This means you don't have to input all of your information again, and you only need to change the fields that are different for this tax year.
In addition, if you've gone through life changes in the year like having a child or buying a home, the software will explain the impact on your taxes.
Winner: TurboTax
TurboTax wins because the free plan includes those who have dependents, while Jackson Hewitt's does not. In addition, TurboTax will help you understand who qualifies as a dependent, and they'll let you know whether any recent life changes qualify you for tax credits.
Deluxe Plan
Jackson Hewitt
Jackson Hewitt's Deluxe plan starts at $29.99, with an additional cost of $36.99 for each state filing. This makes it a significantly more affordable option.
The people who can benefit most from the Deluxe plan are:
The software will walk you through a series of questions to determine the value of certain tax credits and deductions. It's not the most comprehensive tool on the market, but it will generate a solid return for those who don't have complicated financial situations.
TurboTax
The Deluxe TurboTax plan begins at $60 for federal filing, with a $50 additional fee for each state return. This software is optimized for individuals and families who may qualify for more deductions and credits than a simple return would show.
This is the most popular option used with the company. One of the biggest assets is the deduction finding tool, which determines whether you qualify for any of 350 tax credits and deductions.
For homeowners, the software gives information about how to deduct property taxes and mortgage interest. If you sold your home, you can claim refinancing deductions.
If you or any dependents have student loans or tuition expenses, there are tax deductions and credits for various costs that TurboTax will find for you. The software will also calculate charitable donation value and explain what qualifies as a donation for tax purposes.
Winner: TurboTax
The extra calculator and deduction features in the TurboTax software make it more reliable for getting the biggest tax return. However, Jackson Hewitt's system is good if you're on a budget and still want to claim child tax credits.
Premier Plan
Jackson Hewitt
Jackson Hewitt's Premier plan costs $49.99 for federal filing, while there's an additional $36.99 cost for any additional state filing.
This is the company's top tier of tax filing and is suitable for handling the most complex returns. By that nature, it's the best choice for those who:
If you're a freelancer, small business owner, or have complex sources of income, this is one of the most inexpensive online filing software options you'll get.
TurboTax
The TurboTax Premier level unfortunately includes some limitations, since it's not the highest tier. It costs $90 for a federal return and $50 for each additional state. (TurboTax's Self-Employed plan comes with no limitations.)
This option won't work for small business owners, freelancers, and other contractors. However, it is a good choice for investors and those who receive rental property income.
The plan covers rental property income, cryptocurrency, robo-investing, stocks, bonds, and other important investment portfolio items. It does not, however, handle Schedule C filing or itemized business deductions.
If you are a small business owner, you'll need to upgrade to the Self-Employed plan, which costs $120 for federal filing and $50 for every additional state.
Winner: Jackson Hewitt
The Jackson Hewitt software handles all aspects of investments, self-employment, and other deductions. This makes it highly affordable for business owners and those with complex income. TurboTax, on the other hand, has plan limitations for business owners that require you to purchase more expensive software.
See Full Review of - Jackson Hewitt | TurboTax
Pros and Cons of Jackson Hewitt
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Cons
Pros and Cons of TurboTax
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Cons
Final Thoughts: Which is Better?
Both of these services provide good software options for automatically creating and filing your tax return online. Some of the choice depends on the complexity of the return you're filing.
For overall affordability, the best option is Jackson Hewitt. Their prices tend to be lower than TurboTax, especially if you're having a live CPA walk you through the process. The software can handle complex returns, and the free option works for more people.
For the most comprehensive software, TurboTax is the best choice. It comes with tools including expense calculators and money-saving tips for the future. Throughout the filing process, you'll learn a lot about taxes and making the most of your benefits.
