Taxes

Best Free Tax Software

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Not only does tax software make tax-preparation easier, but most tax software programs now offer free tax software versions. Which is the best free tax software available?

In this guide, we’re going to provide details of the free tax software offered by six of the most popular software providers so you can choose the best one for you. Find out the services each free version provides as well as any premium plans offered in case you run into complications.

Some even offer the option to switch to a live preparer. That’s a valuable option if you reach a point when you don’t think you can continue preparing your return on your own.

Before drilling down into each of the six free tax software offers, take a look a the table below for a quick look at which plan may be best for you:

BrandBest ForFree Federal FilingFree State Filing
Cash App TaxesFree filing for most tax situationsYesYes
TaxActSaving returns for many yearsYesNo
H&R BlockFace-to-face tax preparationYesYes
TurboTaxComplicated tax returnsYesYes
TaxSlayerLeast expensive if you need a premium versionYesYes
FreeTaxUSAFree filing for most tax situationsYesNo

Deal of the Day: Cash App Taxes offers 100% free Federal and State tax filing with a Maximum Refund Guarantee and Audit Defense. Never pay a penny to file your income taxes. Learn More

The Best Free Tax Software

Now let’s get into a deeper look at each of the six best free tax software plans offered by major tax software providers.

Cash App Taxes

With Cash App Taxes, free means free. And it’s not just the simplest returns either. Any tax return that can be prepared on Cash App Taxes can be done free of charge. You will be required to sign up for the free credit monitoring service before taking advantage of Cash App Taxes, and the company acknowledges that it can accommodate most but not all tax returns.

Cash App Taxes offers their Audit Defense also free of charge including audit representation. They also provide reimbursement up to $1,000 if either the IRS or a state tax authority penalizes you due to a calculation error by Cash App Taxes.

One disadvantage with Cash App Taxes is that it isn’t available for free filing in all states. Excluded from the list are Alaska, Florida, Montana, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, most of those states don’t have an income tax.

  • Fee to file federal return: $0
  • Fee to file state return: $0
  • Tax forms supported with free version: Form 1040, Schedule A (itemized deductions), Schedule C (small business), child tax credit (Form 8812), and the earned income credit (Schedule EIC)
  • Tax profile for free version: Wage earners, small business owners, those who itemize their deductions, and anyone needing to claim common tax credits
  • Fee range for other returns: $0
  • Option to switch to live preparer: N/A

Visit Cash App Taxes or Read our Cash App Taxes Review

TaxAct

TaxAct’s free filing program has no fee for filing your federal return, but does charge a small fee for your state return. The free version accommodates only the simplest returns. Like most free plans on this list, you won’t be able to use the free version if you itemize deductions or are self-employed.

The free version provides step-by-step guidance in preparing your return, a complete tax glossary, and the ability to import prior-year returns from both TurboTax and H&R Block. The software can provide alerts of any items on your return that might trigger an audit. You also have access to your returns for the previous six years.

Unlike free-only tax software, TaxAct does provide premium plans for more complicated tax situations. And for the first time, they’re also offering a live preparation option provided by a CPA. Naturally, you’ll pay extra for a live preparer.

  • Fee to file federal return: $0
  • Fee to file state return: $4.95
  • Tax forms supported with free version: Form 1040, child tax credit (Form 8812), and the earned income credit (Schedule EIC)
  • Tax profile for free version: W2, retirement and unemployment income; filers with dependents, current students, and those claiming common tax credits
  • Fee range for other returns: $22.46 to $58.46 for federal returns, plus $44.95 per state return
  • Option to switch to live preparer: Yes

Visit TaxAct or Read our TaxAct Review

H&R Block

H&R Block is well known as the largest tax-preparation service in the country. They have more than 60,000 trained tax preparers, working out of about 12,000 offices around the country. This is a major advantage since you can convert your online tax-preparation to a live, local preparer at any time in the process.

H&R Block’s free version only accommodates the simplest tax returns. Unfortunately, they don’t offer live support for this plan. But the software has enough online resources to accommodate simple returns.

One benefit of H&R Blocks free plan is that you can take advantage of their Online Assist option. For $39.99 for both the federal and state returns, a live preparer will be available to help you complete your return online.

  • Fee to file federal return: $0
  • Fee to file state return: $0
  • Tax forms supported with free version: Form 1040, child tax credit (Form 8812), and the earned income credit (Schedule EIC)
  • Tax profile for free version: W2, retirement and unemployment income; filers with dependents, current students, and those claiming common tax credits
  • Fee range for other returns: $29.99 to $67.99, plus $36.99 for each state return
  • Option to switch to live preparer: Yes, even on the free version

Visit H&R Block or Read our H&R Block Review

TurboTax

TurboTax is the most popular tax-preparation software, and for good reason. Not only can they accommodate virtually any tax situation, but they handle even the most complicated. That includes business tax returns, if necessary. The software is highly intuitive and incredibly easy to use, even if you’ve never prepared a tax return in the past.

The free version is available for simple returns however, you won’t be able to take advantage of it if you receive retirement income. But it can be used if you have dependents and will even enable you to take advantage of any tax credits related to your children.

Like H&R Block, TurboTax also offers the ability to convert your return to live preparation through TurboTax Live. The fee starts at $79 for preparation of the federal return (Basic Live plan), and $49 for each state tax return.

  • Fee to file federal return: $0
  • Fee to file state return: Included with Basic Live Plan, or an additional $49 for other Live plan
  • Tax forms supported with free version: Form 1040, child tax credit (Form 8812), and the earned income credit (Schedule EIC)
  • Tax profile for free version: W2 and unemployment income; filers with dependents, and those claiming common tax credits
  • Fee range for other returns: $119 to $199, plus $49 for each state return
  • Option to switch to live preparer: Yes, even on the free version

Visit TurboTax or Read our TurboTax Review

TaxSlayer

TaxSlayer offers their Simply Free version, with no fee for the federal and state returns, as well as no filing fees. Like most other free versions on this list, it can accommodate only the most basic tax situations.

One advantage of TaxSlayer’s free version is that it provides free phone and email support. Even if you don’t need that support, having it available is a confidence builder. Still, another is that if you need to upgrade to a premium version, TaxSlayer has the lowest-cost range of the plans on this list.

  • Fee to file federal return: $0
  • Fee to file state return: $0
  • Tax forms supported with free version: Form 1040, child tax credit (Form 8812), and the earned income credit (Schedule EIC)
  • Tax profile for free version: W2, retirement and unemployment income; filers with dependents, current students, and those claiming common tax credits
  • Fee range for other returns: $17 to $47, plus $32 for each state tax return
  • Option to switch to live preparer: N/A

Visit TaxSlayer or Read our TaxSlayer Review

FreeTaxUSA

FreeTaxUSA does enable you to file your federal tax return for free, but they do charge a modest fee for filing your state return. But the big advantage is that returns at all levels can be filed free of charge on your federal tax return.

That means you can file free even if you’re self-employed, have investment income, or itemize tax deductions.

You can import prior-year tax returns from TurboTax, H&R Block, or TaxAct. Meanwhile, FreeTaxUSA guarantees your returns will be 100% accurate since they perform three individual accuracy checks before you file.

They do have one premium version, which is their Deluxe plan. But the fee for that plan is just $6.99. The basic advantages of the Deluxe plan are that they put you at the front of the line if you have questions, offer unlimited amended returns, or need audit assistance.

  • Fee to file federal return: $0
  • Fee to file state return: $12.95
  • Tax forms supported with free version: Form 1040, Schedule A (itemized deductions), Schedule B (interest and dividend income), Schedule C (small business), schedule D (capital gains income), Schedule E (rental property income), child tax credit (Form 8812), and the earned income credit (Schedule EIC)
  • Tax profile for free version: Wage earners, small business owners, investment income, those who itemize their deductions, and anyone needing to claim common tax credits
  • Fee range for other returns: $0 to $6.99, plus $12.95 for each state tax return prepared
  • Option to switch to live preparer: N/A

Visit FreeTaxUSA or Read our FreeTaxUSA Review

What Are Tax Software Programs?

Tax software programs are simply an online way to prepare your income tax returns. Most are available for purchase through retailers, like Walmart, Target, and Best Buy. But you can also purchase them directly through the providers, sometimes at a slight discount from the retail price. Since we have affiliate relationships with the providers on this list, you may pay even less.

Tax software programs have actually been around for decades. They’ve been widely used by CPA firms and tax preparers, in proprietary professional versions. But more recently, they’ve become available for direct preparation by individuals.

Given the complication involved in tax-preparation, having good tax preparation software is virtually a necessity.

For example, a single number may appear in multiple lines of your tax return. If you try to do that manually, you might miss an entry and you’ll be far more likely to make a math error.

Software removes those potential errors, by automating the process. Sorting numbers, after all, is what computer software does best. The result will be a mistake-free return.

But tax software does something else that’s become critically important, even when it comes to simple tax returns. The tax code is being modified each year. And every few years, it undergoes major changes. Those changes are added into the software as they’re issued by the IRS.

Those updates mean you don’t need to stay on top of income tax developments. The software does it for you and makes preparation as easy as possible.

There’s one more advantage, and that’s that tax software does the collating and copying for you. You can simply press a button and print your returns. They’ll be arranged in sequential order, complete with instructions.

Tax-preparation doesn’t get any easier than that.

Read More: Must-Have Small Business Tax Deductions

Is There Such a Thing as Free Tax Software?

As you can see from our list absolutely! All six of the tax software plans we’ve reviewed provide free filing of your federal income tax return, and all but two offer free preparation of your state tax return as well.

Free tax software has become even more common since the Tax Cuts and Jobs Act of 2017. The Act eliminated personal exemptions and doubled the standard deduction. The end result is that far fewer people are now able to itemize their deductions than in previous years.

That also means more people have simpler tax situations. And that creates the incentive for tax software providers to offer cheap tax software and even free tax preparation.

Though it may seem like a money-losing situation for the tax software providers, it’s actually something of a loss-leader. By offering free tax preparation for the simplest returns, they’ll also get the benefit of anyone who needs to trade-up to a premium version.

And while you may start with a free version this year, you may need a premium version in the future. If you’ve been preparing your return with the free version of the premium provider, it can be easier for you to just trade up, rather than switch to another provider later.

That’s what the tax preparation software providers are banking on.

Do I Qualify for Free Filing through the IRS?

You can file your federal income tax free through the IRS. However, there are some important limitations:

First, the IRS offers two free filing options. The first is the IRS Free File Program, which is the traditional free online tax preparation and filing option on IRS partner sites. However, this option is available only if you have an adjusted gross income of $72,000 or less.

If your income is higher, you can use the Free Fillable Forms program, which you can fill out online also free. You can even use this plan for more complicated returns, such as those involving itemized deductions, investment income, and self-employment income. However, with this option, you’ll need a basic idea of how to prepare your own tax return.

But an important limitation with the IRS plans is that they don’t extend to the preparation and filing of your state income tax return. If you rely on the IRS plans, you may need to pay for tax software for your state return. And tax software providers typically don’t offer preparation of a state tax return without also completing the federal.

How Should I Choose a Tax Software?

Though were emphasizing free tax software in this guide, price shouldn’t be the sole factor determining your choice. Naturally, you’re going to consider price, but that should never be the only factor.

Others you need to evaluate include:

The service level provided by the software. A free version is fine if your situation is simple. But if there’s any possibility it could go in a different direction, there should be options to make a switch without needing to move to a different software entirely. The software should be fully able to handle your tax filing requirements.

The availability of live preparation. Once again, if your return truly is simple, this may not be necessary. But if you run into a situation you’re not sure about, or an unexpected complication, having a live preparation option will eliminate the need to run off to the nearest tax preparer’s office.

Software support options. This can be in the form of live support, whether by phone or live chat, but it may also involve the resources available on the program site. Software like TurboTax has comprehensive online resources. 90% of your questions will be answered just by looking it up in the software.

Guarantees. Because tax returns involve so many situations and numbers, the potential for errors is real. It’s important that a given provider offers accuracy guarantees against mistakes made by the software.

Audit support. This may not be much of an issue with simple returns, but if you have a more complicated return it can be important. If there are any factors that might trigger an IRS audit like self-employment income, or high levels of personal deductions audit support may be a necessary service.

FAQs

Wouldn’t software offering free preparation across-the-board - like Cash App Taxes or FreeTaxUSA - be the best choice?

Not necessarily. Though the free across-the-board programs do accommodate more tax situations, they can’t handle the most complicated ones. If you suspect for any reason you may need to go to a more advanced preparation plan, you may need to consider one of the other plans – just in case.

Also remember that while your tax situation may be simple now, it may not be next year or the year after. Particularly if you’re young, you may want to choose tax software that can accommodate the increasing complexity of your tax situation. Comfort level with any tax software is a major factor. It may be more difficult to switch when your situation requires it.

How much of an advantage is a live preparation option when you have a simple tax return?

In most cases, it won’t be that important. If your situation is simple, preparation will be just a matter of filling in a few boxes or downloading W-2s.

But it’s not always possible to know exactly what service level you’re going to need. A typical free tax software program really will be limited to the simplest situations. If you run into a complication, like an unexpected source of income or tax credit, you may want to hand your return off to a live preparer. Like premium versions, a live preparation option is good to have – even if you don’t think you’ll need it.

Cash App Taxes requires you to sign up for their credit monitoring program - is there a fee involved?

Nope. Not only is Cash App Taxes free to prepare your tax returns, but they also offer free credit monitoring.

They’re unique among tax software providers in that they earn their revenue if you sign up for a loan or credit card offered on the site. Those are available with a credit monitoring service, which is why they want you to sign up for that as a pre-condition.

What are the qualifications of live tax preparers offered by tax software programs?

In most cases, they’re either certified public accountants (CPAs) or enrolled agents (EAs). EAs are required to take courses in tax-preparation, then pass an IRS test covering both individual and business tax returns. Some, however, are former IRS agents.

Whether the live preparer is a CPA or an EA, they are fully qualified to prepare your tax returns, and can even represent you in an IRS audit. That makes them the equivalent of going to your friendly neighborhood CPA or tax preparer’s office.

Why Trust Our Recommendations?

We closely track tax-preparation software providers. Not only do we analyze and review their plans, but we update them each tax season.

That gives us a good perspective on the capabilities of each provider. After all, the only way to know if one tax-preparation software is better than another is by comparing each against the competition.

Related: Best Tax Software for Investors

How We Came Up with the List

There are now dozens of tax-preparation software providers on the market. Many are provided as a secondary service by companies primarily offering other products or services.

We’ve narrowed the list to six of the most popular tax preparation software providers. They’re the most popular precisely because they provide the best service levels.

Naturally, the field of free tax software providers is more limited because not all providers offer a free version. And while most that do provide roughly the same service levels, it really comes down to analyzing the details of what each has.

As you can see from our analysis, one of the factors we used to determine the best free tax software are the additional service levels offered. We feel it’s important even with free tax software for taxpayers to have the option to either move up to a premium version or even choose to engage a live preparer.

Final Thoughts

If you’re preparing your own tax returns this year and your tax situation is simple, you should definitely start out using free tax software. With most plans, you’ll be able to switch to a premium version if it turns out your return is more complicated than you originally expected. And if you choose the right software, it will be able to handle your returns if your tax situation becomes more complicated.

Kevin Mercadante

Kevin Mercadante

Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed slash worker accountant/blogger/freelance blog writer on OutofYourRut.com.


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