FreeTaxUSA is one of the fastest-growing tax planning services in the space. Founded in 2001, millions of returns have been filed with the service. The service is dedicated to creating a budget-friendly service without sacrificing quality.
It’s constantly updating its software to keep up with changing tax codes. After each software upgrade, it’s tested and approved by the IRS and each state. This ensures that you get the best service year after year, making it a reliable and efficient company. With free federal and low-cost state returns, taxpayers save millions of dollars a year.
FreeTaxUSA’s Filing Options
FreeTaxUSA offers four online filing options: Basic, Advanced, Premium and Self-Employed. Each option has free federal filing, but state returns cost extra. So while it’s not completely free, it’s still one of the most affordable services on the market. Regardless of whether your taxes are simple or advanced, the price remains the same. This gives FreeTaxUSA a leg up over other services that require an upgrade in order to access certain tax forms or deductions.
Each option comes with numerous features and guarantees. They each have PDF import for you to easily upload last year’s return, regardless of where you filed. FreeTaxUSA also offers a 100% accuracy guarantee, and the service checks for errors as you file. FreeTaxUSA also looks at over 300 credits and deductions to help you get the biggest tax refund possible.
There’s also step-by-step guidance as you file. The FreeTaxUSA software asks simple questions that guide you through each step of filing, so you’re not completely lost. But if you have any questions, it offers unlimited phone and account messaging customer support. It guarantees that all questions will be answered quickly. With free federal filing and other features, FreeTaxUSA’s prices make for a great value.
The Basic Edition offers you a majority of FreeTaxUSA’s features you’ll need for filing. Federal filing is free, while state returns cost $14.99 per state. So while this option is not completely free, it’s still less expensive than most other tax software.
FreeTaxUSA Basic supports all major tax forms. This means that on top of Form 1040, you can report investment income, rental property income and homeownership information. You can file with the Basic Edition if you’re self-employed and you can also use it with all filing statuses.
There are only a few forms that are not supported with this option. For example, you cannot file with this option if you have foreign employment income, prior year minimum tax credit and nonresident alien returns. But for the most part, FreeTaxUSA takes most tax situations into account.
There are also some useful features to help you throughout the filing process. For starters, your tax return is automatically backed up. That means you won’t have to start all over again if there’s a technical problem. If you’re a returning user of FreeTaxUSA, you can automatically transfer last year’s information. FreeTaxUSA also allows you to report charitable donations. If you’re ever stuck, there’s free email support available.
The Advanced Edition also comes with free federal filing, as well as $14.99 per state, giving it the same pricing structure as the Basic tier. This would be the tier for you if you have tax filing concerns related to home ownership, credit, deductions the earned income credit and more.
For those with investment income of some type, the Premium Edition is likely what you'll need. For instance, it has features available for those with assets earned from investing, owning a rental of some sort and selling a home. It also comes with all of the features above. State returns are also $14.99 per state.
For those who work for themselves, this is the area you'll need to use with FreeTaxUSA, with federal filing being free and state returns being $14.99. This includes those with income from freelancing, small business ownership and/or contracting.
The Deluxe add-on through FreeTaxUSA comes with additional support. There’s priority support so you get a faster response from FreeTaxUSA when you need help. There’s also a live chat feature that connects you directly with a tax specialist. Should you need to amend your return at some point, the Deluxe add-on offers unlimited amended returns. For all of this, it costs you an extra $7.99.
There are some other costs associated with FreeTaxUSA depending on what extra features you need. Here's a breakdown of them:
- Filing for an extension: Free
- Unlimited amended returns: $15.98
- Mailed printed return: $7.97
- Professionally bound tax return: $15.99
- Import prior year federal taxes: $0
- Import prior year state taxes: $17.99
Return & Payment Options
You can pay for FreeTaxUSA using a credit card or debit card. Depending on your provider, you may be charged convenience fees. You can also choose to deduct the filing service cost directly from your refund, but you will need to pay a fee of $24.99.
The fastest way to receive your refund is through direct deposit into a bank account. You will usually receive your tax refund in less than 21 days when you e-file and choose direct deposit. You can also get your refund as a check. This may take up to six weeks.
Tax Extension Filing
Even after the tax deadline passes, FreeTaxUSA still allows you to file your taxes at the same price - free federal filing and $14.99 per state. But they do urge you to file as soon as possible to avoid penalties from the IRS.
Free Tax Calculator
FreeTaxUSA can also be used as an income tax calculator to estimate your taxes, calculate your refund and find tax credits and deductions. You do this by going through the process as if you’re filing your taxes regularly. You set up an account and enter tax information to the best of your knowledge.
By the end, you’ll have an estimation of your income, tax liability, refund, credits and deductions. All this information is given to you before you file the return, so you won’t have to actually submit it. When it’s time to actually file, you can update the existing information into the accurate numbers and then file it.
|Basic Edition||Federal: $0, State: $14.99||Comes with major tax form compatibility, automatic return backup, auto-transfer of last year’s information|
|Advanced Edition||Federal: $0, State: $14.99||Good for homeowners, those with plenty of credits/deductions and anyone who uses the earned income credit|
|Premium Edition||Federal: $0, State: $14.99||Designed for anyone with investment or rental income, or who sold a home|
|Self-Employed Edition||Federal: $0, State: $14.99||Prime for those who are self-employed, small business owners and contractors|
|Deluxe Add-On||Fee: $6.99||Offers additional tax specialist support and free amended returns|
FreeTaxUSA offers four filing options, and they’re enough to cover most elements of tax filing, without breaking the bank. Federal filing is always free, Though state filing isn’t free, it’s still affordable when compared to other services.
Who FreeTaxUSA Is For
With its low prices, FreeTaxUSA is a good option for everyone. Whether you’re self-employed, married or in the military, FreeTaxUSA offers all the major forms you may need. Other services usually offer more forms as plans get more expensive, so if you have complicated finances, you’re forced to upgrade. But FreeTaxUSA covers all major forms with its Basic Edition.
However, if you’re a first-time filer, you may need more guidance and expert support. FreeTaxUSA is affordable but doesn’t offer much educational information to help you understand the filing process. This may make FreeTaxUSA a better fit for confident filers who have a strong grasp of the filing process. Without all the extra features of some other filing services, you can just get straight to filing and get the job done quickly
What’s the Catch?
The biggest catch of FreeTaxUSA is its lack of features. This may cause some trouble for first-time filers and people who just don’t feel confident filing on their own. Other services offer more guidance, tax tools and tips. There is step-by-step guidance with FreeTaxUSA, where the program asks you questions as you work through your tax forms, but there’s no comprehensive explanation beyond that question. This could leave you to do some research on your own if you have questions or issues.
The interface is also very simple and straightforward. This can also be a good or bad thing depending on your tax experience. It’s a bit plain, but its no-nonsense look gets straight to the point with filing. If you’re unsure about the process, this may be a drawback.
How FreeTaxUSA Stacks Up
|Tax Service||Plans Offered||Costs (Federal)||Costs (State)|
|FreeTaxUSA||Basic, Advanced, Premium, Self-Employed||$0 at all tiers||$14.99 at all tiers|
|TaxAct||Free, Deluxe, Premier, Self Employed||Free: $0, Deluxe: $46.95, Premier: $69.95, Self Employed: $94.95||Free: $39.95 Deluxe: $54.95 Premier: $54.95 Self Employed: $54.95|
|TaxSlayer||Simply Free, Classic, Premium, Self-Employed||Simply Free: $0, Classic: $29.95, Premium: $49.95, Self-Employed: $59.95||Simply Free: $0 for first, $39.95 for additional, Classic: $39.95, Premium: $39.95, Self-Employed: $39.95|
FreeTaxUSA is known for its tough-to-beat low prices. While other services may offer slightly higher prices, they usually also come with extra features that can come in handy for users.
TaxAct is also known for its affordability. And though TaxAct’s premium versions are slightly more expensive, its Free option is truly free, with no fee for state filing. With that being said, TaxAct doesn’t give you access to all major forms at every payment level, like FreeTaxUSA does. So unless you have a basic tax return (single or married with no dependents and few other deductions) you will need to upgrade to a paid option.
TaxAct and FreeTaxUSA are similar in the sense that they both have no-nonsense interfaces. They both keep the process simple and thus work well for people who already have an idea how to file their taxes. TaxAct is also similar in that it doesn’t have a ton of additional educational content and tools, but it certainly has more than FreeTaxUSA. The tools are also quicker and easier to use. They don’t require you to go through the whole filing process. There are also calculators, such as a loan calculator and free financial reports to help you handle your finances. TaxAct offers more extensive audit protection and tailors some of its filing options to specific filers. For example, the Self-Employed option features guidance especially for self-employed filers.
TaxSlayer is another affordable option. Its Free option also includes a free federal return and one free state return. However, just like TaxAct, TaxSlayer only allows you to do the simplest of returns with the free option. You will need to upgrade if you have more complicated finances, but the first paid option from TaxSlayer (which costs $17 for a federal return and $29 for a state return) gives you access to all of the common tax forms. That means you can use it even if you have complex finances.
You also get more features with TaxSlayer than with FreeTaxUSA. There is some assistance with audits and if you upgrade to certain plans, you get priority support and access to a tax professional. So even through there aren’t extensive educational guides with TaxSlayer, there are more customer support options than FreeTaxUSA. This means that first-time filers can have a bit more help if needed.
Bottom Line: Should You Use FreeTaxUSA?
Out of all the other tax planning services, FreeTaxUSA offers some of the lowest prices in the market. Its service isn’t bad either – you get access to all major forms with its least expensive option, something that other filing services don’t offer. You also get fast customer service, a 100% accuracy guarantee and a dedication to help you get the maximum refund possible.
The downside to the service is that it’s not the best fit for first-time filers or people who have little experience with tax filing and need some guidance. It does have customer support and a help center, but there’s not much detailed explanation about taxes. So if you’re a confident filer who doesn’t mind doing a little research on your own, FreeTaxUSA’s limited features make it a straightforward (and affordable) choice this tax season.
Tips for Getting Through Tax Season
- Finding a financial advisor who can help with your taxes doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When you finish filing a federal return, there’s a good chance you will need to file a state return. Each state handles income taxes a bit differently but they usually make it easy to stay up to date on the status of your state return.
- Do you find that you rely on the money from your tax refund to make ends meet? Look at the tax withholding information on your W-4. By claiming more or fewer allowances, you can change how much your employer removes (withholds) from your paycheck. Less withholding (more allowances) could mean bigger paychecks and thus more money in your bank account throughout the year.