The Best Tax Software for 2025: Pros & Cons

Introduction

Filing taxes can be complex, but the right tax software can make the process easier, whether you're
an individual taxpayer, freelancer, or business owner. With many tax preparation platforms
available, choosing the best tax software for 2025 depends on your tax situation, budget, and
preferred features.

This guide compares the top tax software for 2025, outlining their features, pricing, pros, and cons
to help you make an informed decision.

Best Tax Software for 2025: Quick Comparison

In-Depth Review of the Best Tax Software for 2025

2.1 TurboTax

•  Best For: Individuals, freelancers, investors, small business owners.
•  Federal Pricing: Free – $179
•  State Pricing: Free – $59
•  Pros:
• User-friendly interface with step-by-step guidance.
•  Live CPA assistance available with TurboTax Live.
• Best for self-employed and investors with stock or crypto income.
• Cons:
• One of the most expensive tax software options.
• Add-ons for CPA support increase the total cost.

2.2 H&R Block

•  Best For: Taxpayers who want both online and in-person support.
•  Federal Pricing: Free – $115
•  State Pricing: Free – $49
•  Pros:
•  Hybrid option with DIY or tax pro assistance.
•  Audit support included at no extra cost.
• Good for self-employed and rental property owners.
•  Cons:
• More expensive than FreeTaxUSA and TaxAct.

2.3 TaxAct

•  Best For: Affordable alternative to TurboTax & H&R Block.
• Federal Pricing: Free – $109
•  State Pricing: $39
• Pros:
•  Lower price than TurboTax with similar features.
•  Import previous returns from TurboTax or H&R Block.
• Best for small business owners and partnerships.
• Cons:
• Limited customer support compared to competitors.

2.4 FreeTaxUSA

•  Best For: Budget-friendly tax filing.
•  Federal Pricing: Free – $15
•  State Pricing: $15
• Pros:
• One of the cheapest tax software options.
•  Itemized deductions supported even in the free version.
•  Cons:
•  No live customer support.
• Best for simple returns (not ideal for business owners).

2.5 Cash App Taxes

•  Best For: Completely free filing.
•  Federal Pricing: Free
•  State Pricing: Free
•  Pros:
•  100% free tax filing for federal & state returns.
• Good for simple W-2 filers and gig workers.
•  Cons:
• No live support or CPA guidance.
• Limited to one tax return per user.

3. How to Choose the Best Tax Software for You

3.1 For Simple Tax Returns (W-2 Filers & Students)

•  Best Choice: FreeTaxUSA or Cash App Taxes
• Why? Free tax filing with no hidden fees.

3.2 For Freelancers & Self-Employed Taxpayers

•  Best Choice: TurboTax or H&R Block
•  Why? Supports Schedule C, deductions, and estimated tax payments.

3.3 For Small Business Owners & Investors

•  Best Choice: TaxAct or TurboTax
•  Why? Handles business deductions, rental properties, and stock/crypto gains.

3.4 For Those Needing CPA Assistance

• Best Choice: TurboTax Live or H&R Block
•  Why? Includes live CPA support to answer tax questions.

 Common Mistakes to Avoid When Using Tax Software

• Choosing the wrong tax software tier (e.g., filing as self-employed but selecting a free W-2
  filer option).
•  Failing to import last year's tax return to avoid errors.
• Overpaying for add-ons like audit protection if not needed.
•  Not reviewing deductions and tax credits before submitting.

Frequently Asked Questions (FAQs)

1. What is the best free tax software for 2025?
Cash App Taxes and FreeTaxUSA offer completely free federal and state filing.

2. Is TurboTax worth the cost?
TurboTax is expensive, but it’s best for freelancers, investors, and small business owners who need
deductions and live CPA support.

3. Can I file my taxes on my phone?
Yes, TurboTax, H&R Block, and Cash App Taxes have mobile-friendly apps for tax filing.

4. What happens if I file taxes late?
The IRS charges a 5% penalty per month for late filing, plus 0.5% per month in late payment fees.

5. Can I switch tax software if I used a different one last year?
Yes, TurboTax, H&R Block, and TaxAct allow importing past tax returns from other software.

 Conclusion

Choosing the right tax software for 2025 depends on your tax situation, budget, and need for
support. Free options like Cash App Taxes and FreeTaxUSA work for simple filers, while TurboTax
and H&R Block offer premium features for self-employed individuals and business owners.

For expert tax assistance beyond DIY software, schedule a meeting with our CPA Anshul Goyal by
clicking at https://calendly.com/anshulcpa/ now.

  About Our CPA

Anshul Goyal, CPA, EA, FCA, is a licensed Certified Public Accountant in the United States and an
Enrolled Agent admitted to practice before the IRS. He specializes in individual tax planning, self-
employed tax strategies, and small business compliance.