There are three main ways to maximize your tax return: You can file your taxes on your own to save on tax preparation fees, you can work with a financial advisor to develop a tax strategy for your financial goals, or can use online tax preparation software to save costs. While online filing is certainly more affordable than many in-person tax services, in many cases, you don’t even have to pay for the basic level. That means you have several excellent options for free online tax software.
SmartAsset looked at a number of online tax preparation tools. We analyzed features and filing options to rank the best free programs available. Read on as we break down the best options. The table below compares the best free online options for tax software in 2021:
|Best Free Online Tax Software – 2021|
|Federal $0 State $0||Federal $0 State $4.95||Federal $0 State $0||Federal $0 State $0|
|Supports basic 1040 returns, includes simple federal tax return and one state return, as well as student loan interest deduction and education credits.||Supports filers with dependents, college expenses and retirement income.||Supports filers with a simple tax return only. This includes W-2 and unemployment income, as well as Earned Income Tax Credit (EIC) and child tax credits.||Supports students, parents and W-2 employees, as well as the Earned Income Credit (EITC), student tuition, payments, and loan interest deductions, and retirement income.|
|For filers with other forms as well as additional credits and deductions, Classic starts at $17 for federal and $32 for state.||For homeowners and filers with deduction, credits and adjustments, Deluxe starts at $24.95 for federal and $44.95 for state.||For homeowners and filers with W-2 and (1099-NEC) income without expenses, charitable donations, student loan interest and education expenses, Health savings account (HSA) and retirement savings contributions, Deluxe starts at $40 for federal and $40 for state.||For filers with deductions and credits, as well as HSA contributions, Deluxe starts at $29.99 for federal and $36.99 for state.|
|For filers requiring access to a tax professional, Premium starts at $37 for federal and $32 for state.||For filers with investments, rental property and prioritized support, Premier starts at $34.95 for federal and $44.95 for state.||For those with rental income and investments, Premier starts at $70 for federal and $40 |
|For those with rental income and investments, Premium starts at $49.99 for federal and $36.99 for state.|
Best Overall Free Online Tax Software
You’ll find the best features and overall functionality with TaxSlayer. This is one of the only places where you’ll find free federal and free state filing. Generally, most companies offer free federal but will charge around $30 or more for a state return. TaxSlayer offers both for free. The site is easy to navigate and offers a deduction finder and PDF import.
There’s also free phone and online support for technical questions. This means if you’re having trouble with one of the inputs or can’t figure out how to link your account to direct deposit, you can call or email a representative. However, tax questions will cost you. The paid levels offer tax professional support and live chat, but the free version does not.
You can file Form 1040EZ for free with TaxSlayer. That tax form is for those without dependents, under age 65 and with taxable income of less than $100,000. The form is generally for those with simple tax situations (meaning you can’t itemize your deductions with the 1040EZ). For those above the income limits or who aren’t eligible for other reasons, you’ll want to consider other filing options, such as the paid version of TaxSlayer.
TaxAct is our runner-up for best overall free online tax software. While filers can file federal taxes for free, you will need to pay $4.95 for every state filed. This company offers an easy-to-use interface and many of the same features as TaxSlayer. Where it differs is what forms are supported. TaxAct has free filing for not only Form 1040EZ, but also Form 1040A. The latter form is two pages rather than one and supports additional tax credits. You still need an adjustable gross income of less than $100,000 and can’t take itemized deductions, but you do have more options with this form than the one-page 1040EZ.
Both TaxAct and TaxSlayer offer refunds via direct deposit to your bank account or slower methods such as by check or prepaid cards.
Easiest-to-Use Free Online Tax Software
TurboTax has one of the most intuitive interfaces available. The online-based program has a user experience that is simple and easy to navigate. The company has one of the biggest presences on the web, for good reason: it’s one of the most popular tax programs on the market.
TurboTax offers free filing for federal and state tax returns to filers with simple tax returns only. This means that W-2 income, limited interest and dividend income reported on a 1099-INT or 1099-DIV, claiming the standard deduction, Earned Income Tax Credit (EIC), child tax credits, unemployment income reported on a 1099-G are covered for free. But note that itemized deductions, business or 1099-NEC income, stock sales, rental property income, credits, deductions and income reported on schedules 1-3 like student loan interest deductions are not covered.
State returns for TurboTax are usually $40 extra. However, the company sometimes runs promotions and specials, where you can use TurboTax’s free option for both federal and state returns.
TurboTax offers maximum refund guarantees (as does TaxSlayer) and a mobile app for free users as well as premium.
If you need more forms than the two available or have a more complex filing situation, you’ll have to pay for TurboTax’s deluxe or premier version. These options will set you back around $80 (Deluxe: $40 federal/$40 state) to $110 (Premier: $70 federal/$40 state), which is on the high end of the scale.
H&R Block is a runner up for easiest to use free online software. The free edition supports students, parents and W-2 employees. You can claim your Earned Income Credit (EITC), deduct student tuition, payments, and loan interest; and report retirement income.
The free edition allows you to file Form 1040 in addition to other common tax forms. These include Form 1099 (B, DIV, INT and R), 1098 (E and T) and 1095 (A and B).
H&R Block allows you to import the previous year’s tax return even if filed with a different company. You can also import previous W-2, 1095, 1098 and 1099 forms. You can add the information on your latest W-2 by simply taking and uploading a picture of the form.
Best for Over-the-Phone Support
Some of us prefer speaking with a real live human when dealing with the complexities of tax paperwork. Luckily, there’s an option for that. TaxAct (also our runner-up for best overall) offers free phone and email support for its free and paid software levels. Unlike TaxSlayer, the support is for tax questions, not just tech support.
However, it’s not the easiest to find. You’ll find a database and email contact form readily available, but not a phone number. You have to dig to find it (in case you were wondering, it’s 319-373-3600). This is likely due to the high volume of calls the company receives, so be prepared to weed through FAQs before turning to the phone. It is rare to find phone support for a free program, however, so the trade-off is probably worth it.
Free software is great, but it’s generally only useful if you’re using Form 1040EZ or 1040A. Any other situation (such as those who are self-employed) will merit paid software or another tax service. No matter what method you choose – online paid or free software, in-person help, or filing yourself – the tax deadline’s the same (May 17th, 2021 this year). So choose the best option for you and get started on filing your return.
Tips for Filing Your Taxes
- Not quite sure you know enough about tax deductions? A financial advisor can help you optimize your tax strategy for your investments and retirement goals. SmartAsset’s free tool can match you with financial advisors in your area in just five minutes. Get started now.
- If you don’t know whether you’re better off with the standard deduction versus itemized, you might want to read up on it and do some math. You might find that you’d save a significant amount of money one way or another, so it’s best to educate yourself before the tax return deadline.
- You’re not limited to free tax software. If you need more options or have a complex filing situation, paid options may be a better bet. We reviewed the overall best tax software for 2021.
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