Unless you’re running your own business or involved in complex investments, you likely don’t need to pay a CPA just to file your taxes. All you need is the right software, and you can do it yourself in under an hour.
I’ve mainly used TaxSlayer in the past. I’ve also tried TurboTax, H&R Block, and TaxAct, but was never quite impressed and found them overly expensive.
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Two years ago, I decided to try filing my taxes using the lesser-known FreeTaxUSA, and I found the experience so pleasant that I’m actually excited to do taxes now. In this article, I’ll show you exactly why I now prefer filing my taxes with FreeTaxUSA.
Pricing Comparison for Tax Software
While most tax programs offer free versions for basic 1040EZ filing, they’re only available to those who 1) aren’t high-income earners, 2) aren’t freelancers or contractors, 3) aren’t homeowners or property owners, 4) have no taxable investments, and 5) don’t want to import tax data from year to year.
FreeTaxUSA is free for ALL of those scenarios, period. Check out how it stacks up against the big names in tax software for 2018:
FreeTaxUSA
- Everyone: $0 Federal + $12.95 per State
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TurboTax
- Deluxe: $39.99 Federal + $39.99 per State
- Premier: $59.99 Federal + $39.99 per State
- Self-Employed: $89.99 Federal + $39.99 per State
H&R Block
- Deluxe: $29.99 Federal + $36.99 per State
- Premium: $49.99 Federal + $36.99 per State
- Self-Employed: $79.99 Federal + $36.99 per State
- Tax Pro Review: $119.99 Federal + $36.99 per State
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TaxAct
- Basic+: $9.95 Federal + $19.95 per State
- Deluxe+: $29.95 Federal + $39.95 per State
- Premier+: $34.95 Federal + $39.95 per State
- Self-Employed+: $49.95 Federal + $39.95 per State
TaxSlayer
- Classic: $17 Federal + $29 per State
- Premium: $37 Federal + $29 per State
- Self-Employed: $47 Federal + $29 per State
- Ultimate: $57 Federal + $29 per State
FreeTaxUSA is the only major online tax filing software that lets you file all federal tax forms for free. Homeowners, investors, freelancers, contractors, high-income earners—doesn’t matter who you are, federal filing is completely free.
Cheaper isn’t always better, of course, and the most important things about tax filing software are that it’s accurate and easy-to-use.
So how does FreeTaxUSA fare in usability? Let me show you a behind-the-curtains peek at how I actually filed my 2017 taxes with it, and you can decide for yourself.
Filing Taxes With FreeTaxUSA
Like most online tax filing solutions, FreeTaxUSA offers you two options:
- A step-by-step guided walkthrough that asks you one question at a time so you aren’t overwhelmed by too many details.
- A freeform experience that allows you to jump to any point in the tax filing process and fill it out in whatever order you want.
I don’t consider myself a tax newbie, but I still like to use the step-by-step guided walkthrough every year just to be sure I don’t miss anything important.
The filing process is divided into four sections:
- Personal Information
- Income
- Deductions and Credits
- Miscellaneous
At any point, you can use the top navigation bar to jump around:
You can also bookmark pages for later, which is useful when you’re waiting on a form to be mailed before filling out a certain section. Topic List is a good way to see if you’ve missed anything important, and History shows what you filled out and when.
Here’s what you can expect in each section.
Section 1: Personal Information
FreeTaxUSA starts off with basic taxpayer information, filing status, dependents, and qualifying children. This is all pretty straightforward, but if you’re ever confused about anything, you can just click on the helpful question links to get clear answers.
Section 2: Income
The Income section of FreeTaxUSA starts with an overview of all possible forms of income you can report, but lets you decide which ones to fill out so you don’t waste time clicking “This doesn’t apply to me” for a million pages:
The comparison of current year to previous year isn’t just useful for seeing whether you earned more or less, but as an anchor for each kind of income. Knowing I earned $30,000 in W-2 income last year makes it easy to see that I entered something incorrectly if my current year W-2 income is too far off.
Here’s what the walkthrough looks like for W-2 income:
Here’s what the walkthrough looks like for freelance income:
At the end of each income type, you can preview the actual form that the IRS will receive. In the case of freelance income, you can look at the Schedule C preview and catch anything that might be wrong (I haven’t seen any errors thus far).
Section 3: Deductions and Credits
While FreeTaxUSA handles every kind of deduction you’d possibly need, it starts off with the two most important kinds: retirement contributions and standard/itemized deductions.
On top of this, it’s just as easy to input whatever other deductions you qualify for, including things like health savings account contributions, college tuition payments, and student loan interest deductions.
If you owe a penalty for the Affordable Care Act, that’s also easy to handle:
And don’t forget about tax credits! You’ll want to go through each tax credit page to see if you’re eligible. There’s no way for FreeTaxUSA to know whether you’re eligible or not just from the other information you entered while filing:
Section 4: Miscellaneous
You probably don’t need the Miscellaneous section, but I do.
This is where I input the estimated tax payments I made throughout the year (very important for self-employment income) and any underpayment penalties I may have brought on (none this year, thankfully). That’s about it, though.
Why I Prefer FreeTaxUSA: It’s Easy and Truly Free!
The first year I used it, I was done in around 50 minutes. This year, with free importing of the previous year’s information, I finished in just over 10 minutes. Of course, I had all of my relevant forms and documents in front of me, so that helped.
Normally such time savings would cost a hefty premium, but FreeTaxUSA is truly free to file federal returns, even if you have self-employment income, investments, or property taxes, all of which would require paid versions of other tax software.
I filed my federal and state returns using FreeTaxUSA last year, and here’s proof that I didn’t pay a single cent over $12.95:
What would you do with an extra $50+ in your pocket? File with FreeTaxUSA this year and treat yourself to something nice with the savings!
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Explore more about: Financial Technology, Personal Finance, Tax Software.
Ohio lets you submit your state tax for free through their website. Not sure about the other states, though.
have you done any research on how secure is your personal information with these other folks? Security always gets overlooked, just curious.
I have already done my farming taxes with taxact but I am giving it a spin. first off it really restricts you to walk a line one topic at a time, no skipping ahead. next, the first time thru pdf import doesn't catch all the data, and it doesn't offer to pull in my w2 automatically like taxact does. I'll keep an open mind for next year as the single use programs tend to be very expensive if you need some of the less frequent forms.
'While most tax programs offer free versions for basic 1040EZ filing, they’re only available to those who aren’t high-income earners, aren’t freelancers or contractors, aren’t homeowners or property owners, have no taxable investments, and don’t want to import tax data from year to year.'
For years I have been a home owner, a rental property owner, had two kids in college, had interest and dividend income, had capital gains and losses from securities and I imported data from previous years. I used the TaxAct free downloadable version, not the online e-file version. After the Q&A TaxAct would print out all the schedules and forms necessary for paper filing.2nd Story Software company did not make it easy to download the free TaxAct. The option was buried deep in the TaxAct site.
I have not used TaxAct in a couple of years because I went 100% Linux and TaxAct does not offer a Linux version. I don't see the point of purchasing Windows just so I can do my taxes. With the ability to download all the IRS forms and publications, I can do the taxes manually.
The Download Now link directs you to the product page, where you can purchase and download the software.
If you own your home or have some investments, H&R Block's Deluxe online filing service delivers the convenience of eFiling with expert guidance, and for a surprisingly affordable (and recently discounted) price. The Deluxe option has everything offered in the Free and Basic options plus help with your home mortgage, investments, dividends, and charitable deductions. You can also file your state taxes for an additional fee. You don't have to file (or pay) until you're satisfied and H&R Block guarantees its arithmetic, too. The Deluxe tool lets you import previous filing data from TurboTax, TaxACT, and other services.
If you've ever shopped for a cell phone online, H&R Block's Web site will have a familiar look and feel. You have four choices: Free, Basic, Deluxe, and Premium. We clicked the Deluxe tool and proceeded to the log-on page to access the secure site. You can try the services for free without creating an account, but you can't store returns online or access support until you have an account. The step-by-step tax prep process includes plenty of options for seeking answers to questions -- most of which have already been asked. Limits on session times prompted timeout warnings, but that's for your safety.
When eFiling began, you could only file the easiest tax returns with the help of expensive software. Today you can account for interest income, mortgage deductions, and other critical tax breaks with H&R Block's Deluxe tax service.