FreeTaxUSA is a free-to-use, ad free tax filing solution and will the best tax software option for many people out there. FreeTaxUSA was founded in 2001 by a joint CPA and software engineers team (the parent company is actually called TaxHawk). The company quickly expanded and became an authorized e-filing provider to the IRS. The company reports that it has securely filed millions of tax returns since its inception. While FreeTaxUSA isn’t quite as big as, say, TurboTax or TaxSlayer, it competes solidly in the marketplace and stands up well against its budget peers such as Credit Karma Tax.
Given its budget status, the software’s interface and features are somewhat stripped down but this shouldn’t present too many challenges for the experienced tax return user. It also forgoes the in-program advertising that is part of other ‘free’ tax return software solutions such as Credit Karma.
This makes FreeTaxUSA an especially good value choice, though first time tax return users may want to consider brands with more online or in-program help. It’s worth noting that although marketed as a ‘free’ software solution, this is only applicable to Federal income tax returns - all of the versions sold by FreeTaxUSA charge a fee for State tax returns, though compared to other products on the market the prices for this are still extremely competitive.
FreeTaxUSA review: Cost
Handles all state and federal tax returns
Unlimited amended returns
Over 350 credits and deductions
- Simple, basic and advanced are all free for Federal returns
- Flat fee of $12.95 for State tax returns
- Deluxe version with extra support options is $6.99
FreeTaxUSA’s products range is nominally free, even for their ‘Advanced’ version. However, this is only for people filing Federal returns. State tax returns incur a charge, though this still represents impressive value. The paid-for Deluxe version comes with extra support services.
FreeTaxUSA markets itself as a budget or value service, more in competition with companies such as CreditKarma than bigger players such as TurboTax or H&R Block. All three versions of TaxFreeUSA’s software (labeled Simple, Basic, Advanced and Deluxe) are free for Federal tax returns. State tax returns incur a fee of $12.95, and this is a flat fee across all three versions - one that still represents very good value compared to the company’s peers. Credit Karma subsidize their free services by exposing users to advertising for financial services from third parties, something which TaxFreeUSA do not do.
The software comes with basic in-program support, but users who feel they need extra help can upgrade to various support options, for instance a Priority Support option that costs $5.99, or users can simply take the extra support options offered by the Deluxe version at $6.99.
FreeTaxUSA review: Products
- Simple: First time users
- Basic: Homeowners
- Advanced: Those with investment properties and investments
- Deluxe: Users who need the extra support options
The four products offered by TaxFreeUSA (which all offer various add-on support modules) are relatively stripped-down in terms of functionality, which make them perfectly good value for users that are perhaps more confident about their tax returns.
The Simple, Basic and Advanced versions are all free of charge for users filing Federal tax returns without any support service subscriptions. If users are also using one of these products to file State tax returns, there is a flat fee of $12.95. These prices offer exceptional value compared to most of the bigger players in the tax return preparation software market. The only real competitor in the free software arena is CreditKarma, and users of their products are subject to third party advertising within the program. Unlike most of their peers, TaxFreeUSA’s versions don’t vary, and all allow the uploading of W-2 paperwork and rolling over tax data from previous years for no extra charge.
Although all major tax situations and paperwork are covered, in general first time users should start with the Simple version, homeowners with the Basic edition and people with rental properties and investments the Advanced version. The only exception to these is the Deluxe version, which comes with extra support, audit assistance, and live chat.
All of the editions of TaxAct’s software are fully equipped to prepare and submit tax returns in all fifty states as well as all Federal tax returns (State tax capabilities incur an extra fee for all versions). All versions also let users amend and resubmit income tax returns even after a version has been submitted to the IRS, and allow for credits and deductions beyond the standard ones. This includes the ability to itemize both credits and deductions as the software recognizes over 350 relevant line items.
FreeTaxUSA: Usability / User reviews
- Visible refund tracker
- Ability to upload previous returns in PDF
- A+ rating from the Better Business Bureau
The interface for all of the versions of FreeTaxUSA’s software is notably less fussy or graphics-forward than that of many of its more expensive competitors. However, it does present the same basic features that any user might want out of an intuitive tax preparation program. This includes such things as a visible tracker for the user’s estimated refund as the return is prepared and easily-navigable tabs for the various portions of the return. However, the software will not let users skip portions and bounce ahead of any of the steps involved in the process, which shouldn’t present too many challenges as long as users prepare to file their return with all the required information when they sit down to do it.
One good feature is that the programs allow users to upload PDFs of their last tax return from TurboTax, H&R Block or TaxAct. There are various pop-ups along the way to help with the more complex sections of the process and a top-screen banner keeps a log of how far along with the process the user is. There are some notable limitations with the software that it pays to be aware of when considering which product to use. TaxFreeUSA’s bundles do not support such things as foreign income, household employment taxes (Schedule H) or nonresident alien returns. There are also, as stated, limited customer service options unless users choose to pay the extra with the free versions or buy the Deluxe version out of the gate.
FreeTaxUSA offers only online software, which means that returns are stored in the cloud - they do not offer a desktop version. TaxHawk, the parent company, have been accredited to the Better Business Bureau since 2005, and the organization currently awards them a top, A+ rating.
FreeTaxUSA: Verdict
FreeTaxUSA are one of the best value products in the tax preparation software market. Their free versions all have the same features, and though they are light on very advanced features and exclude some (relatively uncommon) tax situations, most tax filers should find their products suitable. This is particularly true for experienced users who are confident about the tax return preparation process. For customers who would like additional support, the option to upgrade only incurs a nominal further charge, and the Deluxe edition, which comes with built in support, is also extremely competitively priced. It’s a no-frills, great-value product.
