By 
For most people filing a straightforward 2026 tax return in 2027, TurboTax is our early pick if guided filing matters most, while FreeTaxUSA is the strongest value choice. H&R Block makes more sense if you want an easy path from DIY filing to help from a tax professional.
There is one important caveat: the 2027 filing season has not started yet. As of August 20, 2026, the major tax software companies have not all published final tax-year 2026 pricing and product-tier details.
Most current pricing pages still refer to returns filed during the 2026 filing season. So any price listed below is a current benchmark, not confirmed 2027 pricing.
What is already confirmed is the tax side. For 2026 W-2s, the IRS uses Box 12 code TP for cash tips reported to an employer and code TT for qualified overtime compensation. Box 14b is used for the Treasury Tipped Occupation Code when applicable.
Key takeaways
- TurboTax is our early pick for guided DIY filing, especially if you value document import, step-by-step explanations, error checks, and the option to add expert help.
- FreeTaxUSA is the value leader based on its current model. It currently charges $0 for federal filing and $15.99 for a state return. Those are current-season prices, not guaranteed 2027 prices.
- H&R Block is strongest if human support matters. Its ecosystem includes online filing, live expert help, and in-person tax preparation.
- Cash App Taxes remains worth watching for truly free filing. It currently advertises $0 federal and state tax filing.
- Do not pay for tax software just because your W-2 has TP or TT. Several current free products support Schedule 1-A. The rest of your return is more likely to determine whether you need a paid tier.
- Recheck prices and form support before filing in 2027. Current product pages are useful benchmarks, not guarantees for tax-year 2026 returns.
What is different when filing 2026 taxes in 2027?
Tax year 2026 is different from the first year of the new OBBBA deductions because employers now have formal reporting requirements for qualified tips and overtime.
The IRS’s final 2026 Form W-2 instructions add:
- Box 12 code TP for the total amount of cash tips reported to an employer
- Box 14b for the applicable Treasury Tipped Occupation Code
- Box 12 code TT for qualified overtime compensation
For code TT, only qualified overtime compensation under the federal rules is reported. For the familiar time-and-a-half example, that generally means the extra half above the worker’s regular rate, not the entire overtime paycheck.
The deductions themselves continue to be claimed through Schedule 1-A, which covers:
- qualified tips,
- qualified overtime,
- qualifying passenger vehicle loan interest,
- and the enhanced deduction for seniors.
That makes W-2 handling and Schedule 1-A support two of the first things worth checking when 2027 tax software goes live.
For more detail on the new W-2 fields, see our 2026 W-2 codes TP, TT and Box 14b explained guide.
Best tax software for 2027 at a glance
| Tax software | Our early verdict | Best for | 2027 price status |
|---|---|---|---|
| TurboTax | Best guided experience | First-time filers and people who want more hand-holding | Final 2027 pricing not yet verified |
| FreeTaxUSA | Best value | Confident DIY filers who want to keep fees low | Current federal price $0, state $15.99 |
| H&R Block | Best for human backup | Filers who may want online or in-person help | Final 2027 pricing not yet verified |
| Cash App Taxes | Best free alternative to watch | Price-sensitive DIY filers | Currently advertises $0 federal + state |
| TaxAct | Solid guided alternative | DIY filers who want another established option | Final 2027 pricing not yet verified |
This is an early ranking, not a claim that we have tested unreleased tax-year 2026 software.
Final pricing, eligibility rules, supported forms, promotions, and software workflows should be checked again when the 2027 products launch.
TurboTax: Best early pick for guided filing
Best for: First-time filers and anyone who wants more guidance
TurboTax remains the first platform I would check if your biggest concern is not knowing where everything goes.
Its current DIY software supports W-2 income, document importing, guided questions, error checking, and a wide range of common tax situations. TurboTax also offers separate expert-assisted and full-service options.
There is also an important point about the new OBBBA deductions.
TurboTax’s current Free Edition rules allow Schedule 1-A deductions for qualified tips, overtime, car loan interest, and eligible seniors when the taxpayer otherwise qualifies for a simple Form 1040 return.
So I would not tell someone to buy Deluxe simply because they are claiming a tips or overtime deduction.
Whether you need a paid TurboTax tier depends on the rest of your return.
Why TurboTax is still my early overall pick
The reason is guidance rather than one specific tax form.
Someone receiving a 2026 W-2 with unfamiliar TP or TT codes may care more about clear prompts, document import, and error checking than saving $30 or $50 on preparation.
That can be especially useful if this is your first time dealing with:
- qualified tips,
- qualified overtime,
- several income sources,
- or a new Schedule 1-A deduction.
Where I would wait before buying
Do not use a 2026-season price article to decide what TurboTax will cost in 2027.
Current TurboTax offers are still built around tax year 2025 returns, and Intuit notes that offers and eligibility can change.
So a specific current price should not be labeled as a confirmed 2027 price until Intuit releases its tax-year 2026 products.
Pros
- Strong guided filing experience
- W-2 and document import
- Error checking
- Expert-help and full-service upgrades available
- Current Free Edition can handle Schedule 1-A in qualifying simple returns
Cons
- Paid products can become expensive as your return becomes more complex
- Final 2027 pricing is not yet confirmed
- Business income, investments, itemizing, and other schedules can push you out of Free Edition
Early verdict: Best starting point if reducing filing confusion matters more than getting the absolute lowest preparation fee.
FreeTaxUSA: Best value
Best for: DIY filers who care most about price
FreeTaxUSA is the easiest value recommendation to defend with current facts.
Its current pricing lists:
- Federal return: $0
- State return: $15.99
- Deluxe Support: $7.99
- Additional paid professional-support options
It also currently includes federal filing for self-employment, investments, rental income, and many other tax situations without forcing taxpayers into a more expensive federal tier.
More importantly for this comparison, FreeTaxUSA explicitly supports Schedule 1-A, including deductions for tips, overtime, qualifying car loan interest, and eligible seniors.
That makes it much stronger than simply calling it a budget option.
Where FreeTaxUSA gives up ground
The main reason I would still put TurboTax ahead for some first-time filers is not tax-form coverage.
It is how much guidance you want.
Someone who already understands their W-2 and knows what TP and TT mean may have little reason to pay significantly more for a more guided interface.
Someone who is anxious about whether their tips qualify, has both W-2 and 1099 income, or is dealing with several unfamiliar deductions may put more value on additional assistance.
Be careful with the price
The $15.99 state price is the amount FreeTaxUSA currently publishes, not a promise that the same price will apply when tax-year 2026 filing opens.
That distinction matters in an article about a future filing season.
Pros
- $0 current federal filing
- Schedule 1-A currently supported
- Self-employment and many complex federal forms included
- Low current state-return fee
- Optional paid support instead of multiple federal filing tiers
Cons
- Less appealing if you want extensive hand-holding
- Final 2027 state and support pricing still needs verification
- Some users may prefer a more guided interface
Early verdict: The first option I would check if you understand your return and want to keep filing fees low.
H&R Block: Best if you want human backup
Best for: People who may want to move from DIY to professional help
H&R Block’s biggest advantage is that its ecosystem is not limited to self-service tax software.
Its current online products offer access to expert help, and H&R Block also has a large in-person tax preparation business.
That gives it a useful position between pure DIY software and hiring a separate local tax professional.
For example, you might start with what appears to be a simple W-2 return and later discover that you also have:
- freelance income,
- investment sales,
- multiple states,
- rental income,
- or another issue you do not want to handle alone.
With H&R Block, there is an established path to additional help.
Does H&R Block support Schedule 1-A?
Yes, under its current product support.
H&R Block’s current federal forms list includes Schedule 1-A for the tips, overtime, senior, and vehicle-loan-interest deductions.
Again, that confirms current form support. It does not guarantee which exact 2027 product tier every taxpayer will need.
What does H&R Block cost now?
Its current online pricing lists:
- Free Online: $0 federal + $0 state for qualifying returns
- Deluxe: $65 federal + $49 per state
- Premium: $105 federal + $49 per state
- Self-Employed: $130 federal + $49 per state
Those are current-season prices and should not be relabeled as 2027 pricing.
Pros
- Schedule 1-A currently supported
- Online DIY plus expert-help options
- In-person tax preparation available
- Useful if your return becomes more complicated than expected
- Established document-upload workflow
Cons
- Current paid tiers cost substantially more than FreeTaxUSA
- In-person preparation can cost considerably more than DIY software
- Final 2027 prices are still unknown
Early verdict: Best fit if having a real person available is worth paying more for.
Cash App Taxes: Best completely free option to watch
Cash App Taxes currently advertises $0 federal and state tax filing.
That makes it difficult to ignore for cost-conscious filers.
The reason I would not rank it above FreeTaxUSA yet for the 2027 season is simple:
Current free pricing is confirmed, but tax-year 2026 TP, TT, and Schedule 1-A workflow should still be verified when the 2027 product is available.
That does not mean Cash App Taxes will fail to support those forms.
It means we should not turn an assumption about an unreleased filing season into a confirmed fact.
Pros
- Currently $0 for federal and state filing
- Broad current tax-situation support
- No traditional paid tier required for more complex returns
Cons
- Final tax-year 2026 form workflow has not yet been verified
- Requires access through Cash App
- Less attractive if you want extensive professional tax guidance
Early verdict: A very strong option to watch if price is your priority, but verify tax-year 2026 form support before relying on it.
TaxAct: A solid guided alternative
TaxAct is another established DIY filing platform and already publishes guidance on the OBBBA deductions.
Its current tax materials cover the qualified tips deduction, qualified overtime deduction, and Schedule 1-A.
Its product lineup has traditionally included multiple guided filing tiers along with optional professional assistance.
But the important point for a 2027 comparison is the same as with TurboTax and H&R Block:
Do not treat a current TaxAct price as a confirmed tax-year 2026 filing price until its 2027 products and offers are published.
Pros
- Established DIY tax platform
- Guidance already available for the new deductions
- Multiple filing options
- Professional support options available
Cons
- Final 2027 pricing still needs verification
- May not beat FreeTaxUSA on price
- Need to compare exact 2027 form and tier restrictions when products launch
Early verdict: Worth comparing once 2027 pricing goes live, especially if you want a traditional guided filing product but do not want TurboTax or H&R Block.
What tax software needs to handle correctly in 2027
For someone claiming the new deductions, I would check five things before paying.
1. Box 12 code TP
The IRS says employers report the total amount of cash tips reported to the employer using Box 12 code TP on the 2026 W-2.
When TP is reported, the applicable tipped occupation code appears in Box 14b.
Your software should transfer that information cleanly into the qualified-tips calculation.
2. Box 12 code TT
For 2026, employers report qualified overtime compensation using Box 12 code TT.
Do not assume that means every dollar you received during overtime hours is deductible.
The federal deduction generally covers only qualified overtime compensation under the FLSA rules, such as the premium portion of time-and-a-half pay.
3. Schedule 1-A
Schedule 1-A is used for:
- Qualified tips
- Qualified overtime
- Qualified passenger vehicle loan interest
- Enhanced senior deduction
Current versions of TurboTax, FreeTaxUSA, and H&R Block already support Schedule 1-A.
But verify the final tax-year 2026 products before filing.
4. Income phaseouts
Tax software also needs to apply the income limits correctly.
For example, the qualified overtime deduction begins phasing out above $150,000 of MAGI, or $300,000 for married couples filing jointly.
Software should calculate these rules rather than simply copying a W-2 number onto the return.
5. Your tax situation beyond OBBBA
This is what usually determines whether a “free” return stays free.
You might have a simple W-2 plus a tips deduction but also have:
- Schedule C freelance income
- Stock or crypto sales
- Rental income
- Multiple state returns
- Itemized deductions
- Marketplace health insurance
- K-1 income
The Schedule 1-A deduction itself may be simple.
The rest of your return determines which product actually fits.
Which tax software should you choose?
| Your situation | Early pick |
|---|---|
| Simple W-2, want maximum guidance | TurboTax |
| Comfortable filing yourself, want low cost | FreeTaxUSA |
| Want option for in-person help | H&R Block |
| Want federal + state for $0 and your return is supported | Cash App Taxes |
| Want another established guided platform | TaxAct |
| Schedule C plus a simple OBBBA deduction | FreeTaxUSA or compare TurboTax paid options |
| Several states or unusual tax issues | Compare expert-assisted software with a qualified tax professional |
Should you pay for tax software just because you have TP or TT on your W-2?
No.
Having a tips or overtime deduction does not automatically mean you need paid tax software.
TurboTax’s current Free Edition permits Schedule 1-A for qualifying simple returns. FreeTaxUSA currently includes Schedule 1-A with its $0 federal filing. H&R Block also lists Schedule 1-A among its supported forms.
You may still need a paid product because of other parts of your return.
But do not upgrade solely because a website tells you that “no tax on tips” or “no tax on overtime” automatically requires Deluxe.
When should you actually choose software for the 2027 season?
I would not buy based on an August 2026 price comparison.
Wait until tax-year 2026 products are released and check:
- The final federal price for your return
- State filing fees
- Whether your exact forms are included
- Whether expert support costs extra
- Whether the software can import your W-2
- Whether your return qualifies for a free tier
- Whether promotional pricing expires before you plan to file
Current provider pricing pages make clear that offers, products, and eligibility can change.
So the best software today is not necessarily the cheapest software when you actually file in early 2027.
FAQ
What is the best tax software for 2027?
Our early overall pick is TurboTax for filers who want the most guided DIY experience, while FreeTaxUSA is the stronger value choice for people prioritizing low cost.
H&R Block is particularly appealing if you want access to in-person or professional help.
Final 2027 pricing and product restrictions still need to be checked once tax-year 2026 products launch.
Will tax software support the new 2026 W-2 tip and overtime codes?
The IRS has finalized Box 12 code TP for cash tips reported to an employer, code TT for qualified overtime compensation, and Box 14b for tipped occupation codes.
Major filing products will need to accommodate finalized IRS reporting requirements, but their exact 2027 workflows should be verified after launch.
Does TurboTax Free Edition support the new deductions?
Under TurboTax’s current Free Edition rules, qualifying simple Form 1040 returns can include Schedule 1-A deductions for tips, overtime, car loan interest, and eligible seniors.
Check the 2027 eligibility rules again before filing.
Is FreeTaxUSA really free?
FreeTaxUSA currently charges $0 for federal filing and $15.99 for a state return.
It also currently supports Schedule 1-A and many complex federal tax situations.
Recheck pricing when tax-year 2026 filing opens.
Is Cash App Taxes really free?
Cash App Taxes currently advertises $0 federal and state filing.
Confirm that your exact 2026 forms are supported before starting your 2027 return.
Do I need Deluxe to claim the no-tax-on-tips deduction?
Not automatically.
The deduction is claimed through Schedule 1-A, and several current free filing products support that schedule.
The rest of your tax situation determines whether you need a paid tier.
Bottom line
TurboTax is our early 2027 pick for filers who value guidance, FreeTaxUSA is the early value winner, and H&R Block is the strongest choice when access to human help matters.
But the most useful advice in August 2026 is to ignore any comparison pretending final 2027 prices are already known.
The IRS has finalized the important tax-year 2026 W-2 reporting changes, including TP for reported cash tips, TT for qualified overtime, and Box 14b for tipped occupation codes.
What remains unsettled is the commercial side:
- final 2027 pricing,
- free-tier eligibility,
- promotions,
- product restrictions,
- and the exact filing workflow each company will offer for 2026 returns.
Use this comparison to build a shortlist now. Then check the final prices and form support once tax-year 2026 software goes live.
For the broader filing process, see How to file your 2026 taxes in 2027 and Will the new OBBBA deductions make your 2027 refund bigger?.
This article is for general educational purposes and is not individualized tax, legal, or financial advice. Tax software pricing, eligibility rules, supported forms, and filing procedures can change before the 2027 filing season.
