Basic tax software will walk you through preparing a simple return, checks for errors and usually will e-file the return for you. Use only if you do not itemize deductions.
Deluxe tax software offers help with preparing taxes involving itemized deductions related to mortgages, charitable contributions, etc. Some deluxe versions also cover self-employment taxes and deductions as well. Deluxe versions provide more documentation on specific tax topics, both in written and video formats.
Premiere or premium tax software has support for investments and small business/self-employment deductions. This level of tax software offers even more documentation and research resources on all personal income tax topics in written and video format.
Online tax software becomes more popular every year due to the convenience. If you start your taxes with a lower version with online tax software, it's hassle-free to upgrade to a higher version if you need to. Read Online Tax Software or Desktop Tax Software to decide between these two options.
State Returns aren't always included with tax software for federal returns. Before you buy tax software verify whether the price includes a state return, or find out if your state offers free online returns.
Check on prices for electronic filing as well if you plan to e-file since the price of tax software does not always include e-filing fees.