Top Tax Software Picks and Renter Tax Benefits Explained

Tax season can be a daunting time for many, but with the right tools, it doesn't have to be. CNET Money editors have rigorously tested the top online tax software options to simplify your tax return process and expedite your refund. Among the best choices are TurboTax, ideal for most filers, and H&R Block, which offers a robust free filing service. For those seeking cost-effective solutions, FreeTaxUSA and Cash App Taxes provide excellent free or low-cost options. Freelancers and gig workers might find TaxSlayer particularly beneficial, while TaxAct is noted for its accuracy guarantee. Jackson Hewitt stands out for those needing to file multiple state tax returns.

Homeowners can often take advantage of tax breaks by itemizing deductions for real estate taxes and mortgage interest. However, renters typically find fewer tax relief options. On a federal level, the IRS does not offer a universal tax incentive for renters, although the foreign housing deduction is available for self-employed U.S. taxpayers living abroad. Renters who use part of their home exclusively for business might qualify for a home office deduction, but this is not applicable to most W-2 remote workers.

State tax benefits vary, with nearly half the states offering some form of renter tax benefits. States like Arizona, California, and New York provide potential tax credits or deductions, although eligibility often depends on income or age. For example, in New York, renters must earn less than $18,000 to qualify, while in Montana, renters need to be at least 62 years old. Indiana offers a more inclusive deduction, allowing all renters to deduct up to $3,000 or the actual rent paid, whichever is less.

The value of renter's tax credits varies significantly by state. Pennsylvania and Minnesota offer generous credits, while California's credit is relatively low at $60 for individuals. To claim these credits, renters must follow state-specific procedures, which may involve filing applications with the Department of Revenue, separate from federal tax deadlines.

As you prepare for the 2024 tax filing season, consider exploring CNET Money's comprehensive tax explainers and software reviews to make informed decisions.