How do I choose between different tax prep services for a taxpayer with investment income and state changes?

For a taxpayer with investment income and state changes, the “best” tax prep service is usually the one that handles:

1. Capital gains/dividends/interest/crypto
2. Multi-state returns or part-year resident returns
3. Importing 1099s and brokerage data cleanly
4. Audit support and error checking
5. Pricing that doesn’t jump for “complex” forms

What to look for

1) Investment income support

Make sure the service can handle:

• 1099-DIV, 1099-INT, 1099-B
• Capital gains and losses
• Wash sales
• Dividend reinvestment
• RSUs/options/ESPPs if relevant
• K-1s if applicable
• Crypto transactions if needed

If the taxpayer has many trades, a service with brokerage import is a big plus.

2) State move / part-year residency

If they changed states during the year, check whether the platform supports:

• Part-year resident returns
• Nonresident returns
• Multiple state filings
• Allocation of income between states
• Credit for taxes paid to another state

This is often the biggest differentiator. Some cheaper services only look fine until a state residency issue appears.

3) Complexity of forms

Investment income can push you into:

• Schedule D
• Form 8949
• State capital gain adjustments
• Additional state schedules

If the service charges extra for these, compare total cost, not just the base price.

4) Guided vs DIY

Choose based on comfort level:

• Guided interview software: good if the taxpayer can answer questions but isn’t tax-savvy
• Full-service tax prep: better if the returns are messy, there are multiple state issues, or you want a professional to review everything

5) Support quality

For this type of return, support matters. Look for:

• Access to a CPA/EA
• Chat or phone support
• Ability to review before filing
• Clear handling of state residency questions

Practical selection rule

Use a DIY online service if:

• Investment income is moderate
• Only 1–2 states
• No business income
• No unusual state sourcing issues
• The taxpayer is comfortable entering brokerage summaries and residency details

Use a hybrid or full-service option if:

• They moved mid-year
• They had income in multiple states
• They have many brokerage transactions
• They received RSUs/stock options/crypto
• They want help optimizing deductions and state credits

Comparison checklist

When comparing services, ask:

• Does it support part-year residency in both states?
• Does it import brokerage 1099s directly?
• Does it support Form 8949 / Schedule D without extra fees?
• Can it file multiple state returns?
• Does it explain how it handles source income and resident credits?
• Is audit support included?
• What is the final price with all required forms?

Simple recommendation

• Simple investment income + one state: use a strong DIY service.
• Investment income + state move: choose a service known for multi-state and part-year resident returns, even if it costs more.
• Lots of transactions or uncertainty: use a tax pro or full-service filing.

If you want, I can also give you a feature-by-feature comparison template or recommend specific services based on the taxpayer’s situation.