Do some tax prep softwares give higher refunds than others? I tried 4 to find out

There’s an idea circulating on social media that certain tax prep softwares give out higher refund amounts than others.

TikTok user robinlynn.marie claimed that FreeTaxUSA, a software listed on the IRS Free File website, gave hundreds of dollars more than TurboTax and H&R Block.

Others on social media are echoing that claim, saying that FreeTaxUSA gives a “much higher” refund than other platforms.

So, I tested that claim by entering my income information into four tax prep softwares: TaxAct, TurboTax, H&R Block and FreeTaxUSA.

What was the result?

All four softwares gave me the same amount for my federal and state refunds.

As a single person with no dependents, no assets and qualifying for only two standard deductions, the filing process was pretty simple. It took me less than 20 minutes to get an estimated refund with each software.

What about fees for filing your taxes?

All four tax prep softwares charge a fee for filing:

• TaxAct: $29.99 for federal returns + $39.99 for state returns

• TurboTax: $39 for federal returns + $39 for state returns

• H&R Block: $35 for federal returns + $37 for state returns

• FreeTaxUSA: Free federal returns + $14.99 for state returns

Can you file your taxes for free?

However, you may qualify for free federal and state filing, depending on your adjusted gross income (AGI) for 2023 and the state you live in.

For example, you can file your federal return for free with TaxAct if your AGI is $79,000 or less, according to the IRS. If you live in Arkansas, Iowa, Idaho, Mississippi, Montana, North Dakota, Rhode Island, Vermont, Washington or West Virginia, you can file your state return for free.

You can file your federal and state return for free with FreeTaxUSA in all states if your AGI is $45,000 or less, the IRS says.

What should you do when there are differences in your tax prep software?

My taxes were easy to file, but that isn’t the case for everyone.

If you notice a significant difference in your refund amount, you should consider switching programs or hiring an accountant, Ebong Eka, a certified public accountant with EKAnomics Tax Relief, told Yahoo Finance.

“If there is a difference larger than a few hundred dollars, you want to confirm the tax software has received an update,” Eka said. “Additionally, with two different tax software programs, make sure you’ve inputted the same information in both.”

Eka also recommended using a CPA if your taxes are more complicated. Those who own multiple properties or have had significant changes in their living situations could fall into this category, Yahoo Finance says.

How to get the maximum tax refund

U.S. News & World Report suggests itemizing deductions, claiming credit for energy-efficient home improvements and claiming dependent care expenses, such as day care, before- and after-school programs and summer camps for a higher refund.

Contributing to a traditional individual retirement account and health savings account are also good ways to maximize your tax savings, according to U.S. News.