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FreeTaxUSA Review

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by Emily Zhu Updated
FreeTaxUSA
Our Rating: 4.4/5
How we calculated this rating

 

FreeTaxUSA is one of the fastest-growing tax planning services out there. Founded in 2001, over 18 million returns have been filed with the service. And with a team of over 150 employees, it’s dedicated to creating a budget-friendly service without sacrificing quality.

It’s constantly updating its software to fit with new 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 two online filing options: Free and Deluxe. Both options have free federal filing, but state returns come at an extra cost. So while it’s not completely free, it’s still one of the most affordable services in 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 you to upgrade if your finances are complicated.

Both options come with numerous features and guarantees. They both have PDF import, so you’re able to easily upload last year’s return, regardless of where you filed. FreeTaxUSA also offers a 100% accuracy guarantee, so the service checks for errors as you file. FreeTaxUSA also looks at over 350 credits and deductions to help you get the biggest refund possible.

There’s also step-by-step guidance as you file. The 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 great service.

Free Edition

The Free option offers you a majority of the features you’ll need for filing. Federal filing is free, while state returns cost $12.95 per state. While it’s not completely fee, it’s not as expensive as some other services. Plus, you’re able to e-file, which saves time and money.

FreeTaxUSA Free supports all major tax forms. This means that on top of Forms 1040A, 1040EZ and 1040, you’re also able to report investment, rental property and homeownership information. You can also use this option if you’re filing jointly or are self-employed, with the necessary forms included as well.

There are only a few forms that are not supported with this option. This includes 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 features to help you throughout the process as well. Your tax return is automatically backed up, so you won’t have to start all over again if there’s a techical problem. If you’re a returning user of FreeTaxUSA, you also get auto-transfer of last year’s information. FreeTaxUSA also allows you to report charitable donations. If you’re ever stuck, there’s free email support available. 

Deluxe Edition

The Deluxe option comes with all the features of the Free option, plus more. But it’s at a slightly higher price. Federal and state filing fees remain the same – free for federal forms, $12.95 for state. On top of those filing fees, FreeTaxUSA also includes an extra fee of $6.99 for the Deluxe option. 

You still get access to all the major forms, plus the auto-transfer of previous year’s information. But this option also gets you extra support. There’s priority support so you can get a faster response when asking for help. There’s also a live chat feature that connects you directly with a tax specialist. And if you’re being audited, audit support is included automatically. The Deluxe option also offers unlimited amended returns as well, so you’re able to fix mistakes without an extra fee.

Additional Features

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.

The fastest way to receive your refund is through direct deposit into a bank account. Most taxpayers receive their refund in less than 21 days this way if they e-filed. You can also get the refund through 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 a low price. It’s at the same price as it would usually be – free federal filing and $12.95 per state. But they do urge you to file as soon as possible to avoid penalties directly from the IRS.

Free Tax Calculator

FreeTaxUSA can also be used as a 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 and 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.

Audit Assist

FreeTaxUSA offers audit support, but only with the Deluxe option. Audit Assist connects you to audit specialists to help you prepare for the audit. They’ll help answer your specific questions and concerns. You also get access to the audit center, which shares information on how to navigate through the process. But there are some limits to Audit Assist. It only covers federal returns, not state, and FreeTaxUSA doesn’t handle IRS correspondence or represent you at the audit.

Pricing 

Filing Options Costs Features
Free Federal: $0 State: $12.95 Management Fee: $0 Comes with major tax form compatibility, automatic return backup, auto-transfer of last year’s information
Deluxe Federal: $0 State: $12.95 Management Fee: $6.99 Comes with all Free option features, plus audit assistance, priority support, amended returns, live chat

Management Fee: $6.99 Comes with all Free option features, plus audit assistance, priority support, amended returns, live chat

Though FreeTaxUSA only offers two options, they’re enough to cover most elements of tax filing, while still at a low price. You’re able to file Forms 1040, 1040A and 1040EZ at no cost. Though state filing isn’t free, it’s still more affordable when compared to other services. 

The Free and Deluxe options also aren’t that different from each other. The Deluxe option gets you more features, but at an extra management fee of $6.99. When it comes to filing itself, both options cover major tax forms. This makes either option a great, affordable choice for filing, since many other services only offer the bare minimum forms with their least expensive option.

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 Free option, while still dedicating itself to getting you the maximum refund possible. 

However, if you’re a first-time filer, things may be more confusing when using FreeTaxUSA.  It doesn’t have many educational guides to help you understand the filing process, which may be a drawback. This may make FreeTaxUSA a better fit for confident filers who have a strong grasp of the filing process. Without all the extra features, you can just get straight to filing and get the job done quickly. This saves you time and money - but only if you know what you’re doing.

What’s the Catch?

The biggest catch of FreeTaxUSA is its lack of features. Though some may view this as a benefit since it keeps things straightforward, this may cause some trouble for first-time filers. FreeTaxUSA doesn’t offer as much guidance as other services, with no extensive tax tools or tips. There is step-by-step guidance when filing where the program asks you questions about the information for that section. But there’s no comprehensive explanation beyond that question. And though it offers customer support and a knowledge base, you may not get the specific help you need if you’re confused.

Plus, its interface is 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 point with filing. If you’re unsure about the process, this may be a drawback. There’s little hand holding, so though prices are low, it may not be as accessible for people at all different levels of tax expertise.

How FreeTaxUSA Stacks Up

Tax Planner Plans Offered Costs (Federal) Costs (State)
FreeTaxUSA Free, Deluxe $0 Free: $12.95 Deluxe: $12.95
TaxAct Free, Plus, Freelancer, Premium Free: $0 Plus: $25 Freelancer: $39 Premium: $51 Free: $0 Plus: $37 Freelancer: $37 Premium: $37
TaxSlayer Free, Classic, Premium, Self-Employed Free: $0 Classic: $24 Premium: $44 Self-Employed: $47  Free: $0 for first, $29 for additional Classic: $29 Premium: $29 Self-Employed: $29

FreeTaxUSA is known for its tough-to-beat low prices. While other services may offer slightly higher prices, they usually also comes with extra features that can come in handy for users.

TaxAct is known for being affordable. It’s similar to FreeTaxUSA with its no-nonsense interface. And though TaxAct is slightly more expensive, its Free option is truly free, with no fee for state filing. While FreeTaxUSA has free federal filing, you still need to pay for state filing. But TaxAct doesn’t give you access to all major forms like FreeTaxUSA does. So if you’re a homeowner, you’ll have to upgrade from the Free option to the Plus option to access all the forms you need. But TaxAct offers both free email and phone support, while FreeTaxUSA only offers free email support.

And though both services lack in extensive educational guides, TaxAct offers more tools and calculators. FreeTaxUSA allows you to estimate your taxes, but that requires basically going through the entire filing process (just without actually filing at the end). TaxAct’s tools are quick and easy-to-use. It offers calculators, like a tax calculator and loan calculator, which allow you to quickly calculate these numbers without having to go through the entire process.

TaxSlayer is another affordable option. Its Free option is also truly free, though it only includes one state return. But the drawback is that you can only file a 1040EZ with that option. Though FreeTaxUSA requires that you pay for state filing, you’re able to access to all major forms. Only TaxSlayer Classic and above gives you access to all major forms, so you’ll need to upgrade from the Free option.

Though TaxSlayer is more expensive, it does have more features. If you’re a Premium user, you get priority support and access to a tax professional - an option that no FreeTaxUSA option offers. TaxSlayer also offers unlimited email and phone support for all plans. So though both services don’t offer extensive tax educational guides, TaxSlayer offers more customer support options than FreeTaxUSA. This means that first-time filers have more help options if needed.

For the 2017 tax season, TaxSlayer is offering 20% off federal returns. No coupon code is necessary.

Bottom Line: Should You Use FreeTaxUSA?

Out of all the other tax planning services, FreeTaxUSA offers some of the lowest prices in the market. And its service isn’t bad either – you get access to all major forms with its least expensive option, something that other planners 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. If you have no experience with tax filing and may need some guidance, FreeTaxUSA doesn’t offer much help in that department. It does have customer support and a help center, but there’s not much detailed explanation throughout the filing process. But if you’re a confident, experienced filer, its limited features makes it quick and straightforward. And overall, FreeTaxUSA offers a solid service at a low price.