Free Tax Filing Software Options: IRS, TurboTax, TaxCut, TaxACT

Due to a combination of owning a corporation, moving mid-year, and all the residency and payroll rules attached to assigning incomes between states, we are hiring a CPA this year. This MSN Money article says that 62% of Americans pay a professional to do their taxes. I’m actually surprised by this number, as I think most people can get by just fine by using current tax software. I’ve certainly been happy to do so for the last decade.

Below are several free ways to get your taxes done, besides of course using old pen n’ paper. As you’ll see, for just about everyone there is at least one option for completely free Federal filing with E-file. And even if you add in State, it shouldn’t cost more than $14 with E-file.

IRS Free File – Income Restricted
If your 2008 adjusted gross income of $56,000 or less, there are a variety of options from 20 different software companies available from the Free File Alliance at IRS.gov.

Free File Fillable Tax Forms [IRS]
If you already know which tax forms you need to fill out, the IRS now lets you fill them out electronically and file them electronically for free. This is not the same as the income-restricted “Free File” above. Via Consumerist.

TurboTax
You can use the TurboTax Federal Free Edition if you have a simple tax return, for example one that only requires the 1040EZ return with no itemized deductions. State is $25.95.

TurboTax Business
If you have a corporation, partnership, or multi-member LLC and think you can handle it yourself, you can get TurboTax Business for Federal filing free with Federal E-file included.

H&R Block TaxCut
The free version of TaxCut is also restricted to those with simple returns.

Not quite free, but you can also get TaxCut standard for Federal for $1 with free Federal E-file at Dollar Tree stores. It has no income restrictions and handles itemized deductions. State return is the upsell, at $29.99 extra (see below for more options).

TaxACT
Competing well with the big boys is TaxACT, which offers a free federal return for everyone with no restrictions, with free Federal E-file included. State return is $13.95 with E-file included.

The TaxACT “Ultimate” Bundle is $16.95, includes data importing, and the state return. However, there is a returning customer’s offer that gives you 30% off, bringing the total cost to $11.90. The link does not appear to actually discriminate between new and returning customers.

State Income Taxes
Many states also offer their own online income tax filing programs. I don’t have time to compile all the links this year, but use this old list as a starting point, or just Google your own state’s tax website. In many cases, filing a state return manually is not very difficult.

Comments

  1. I love TurboTax. They find all kinds of little extra deductions. Of course, I don’t use the free version, but this past year I got married, bought a house and then had a child (married at beginning, child near the end), and we had a whole slew of charitable donations.

    Besides, now TurboTax has an online record of the entire process in case I get audited. I don’t have to worry too much about mistakes, I know they got filed correctly, I know I filled out the correct forms (even though I didn’t actually fill out any). I also got an explanation of all the crazy tax terms right from the program, or in the little linked in forum.

    And doing all my taxes took about an hour, and it was fun! It’s more like filling out a survey.

    Sorry to sound like an ad, but it was a lot of fun to do my taxes this year.

  2. I normally buy and install TurboTax, but this year I’m using their on-line version. It’s free to enter in all of the information, and you only pay when you actually file. I did have a problem importing my stock sales, so I had to manually enter those. Apparently the installed version is better than the on-line one in this regard.

  3. DataIsGold says:

    I’ve used TurboTax in the previous two years. Earlier in 2008 I saw many reviews at Amazon where TurboTax was going to start charging $10 per printing after the first printing. Many reviewers said they’d switch to TaxCut and so did I. If you look at the reviews now, TurboTax has reversed that policy so it’s basically the same as in other years.
    So far so good, though the interview process sometimes lacks a lot of detail.

  4. I suggest you make a note to say if the option is online or software you install to your own computer. One involves giving your data to a 3rd party. The other does not.

  5. With all of the ads telling people they can “get their refund now” through these horrible refund anticipation loans, it shouldn’t surprise you that 62% of tax filers use “professionals” to do their taxes. I’ve even heard ads from car dealers in the past telling people to bring their last pay stub to have their tax refund estimated, and for that to be used as a down payment on a new vehicle…it’s crazy. It’s amazing how many people view a refund as “free money” instead of what it is….an interest-free loan you gave to the government over the last year…although in some cases it is free money with some of the horrible “refundable tax credits” that can be had for some people that don’t even pay taxes….

    That being said, for it’s up in the air as to which vendor I’ll be using. I was leaning towards Tax Act. The less I pay to file an accurate return the better.

  6. If you have an insurance with StateFarm, you can register at StateFarm’s website, and can use Turbotax online for free.

    Or go to this website to get 15% discount on turbotax online
    taxpartner.adp.com

  7. I’ve used TurboTax through Pentagon Federal Credit Union in the past, and plan to file again through them.

  8. Bernie Bildman says:

    I’ve used the Free version of eSmarttax::

    http://www.esmarttax.com/

    for 2 years now, it saves previous years submitted forms for you. It cost me nothing, the electronic filing happens within the site from your tax forms pages.

  9. Jeff, agree with you! Its always really easy to do your taxes on TurboTax and you don’t miss any deductions :)

  10. I’ve used taxact the past two years and have been very happy. It seemed more thorough to me than turbo tax, including easier to understand forms for business purposes. I also entered all data into both sites and Tax act gave me a better refund… i dunno

    heads up on the tax act discount. It expires at some point, I think in March. I know I missed it last year, but was still the cheapest option.

  11. I gotta throw a plug in for the free forms option available at the irs.gov

    https://www.freefilefillableforms.com/FFA/Gateway.htm

    It’s just the basic tax forms, and it doesn’t do an interview and help you find deductions, etc… but if you kinda know what you are doing already, it’s really convenient. Plus it’s totally free… including efile

  12. State Farm only offers free TurboTax to customers with at least one banking product from them this year.

    http://www.statefarm.com/landing/tax.asp

  13. dood:

    I gotta point out that “FreeFillableForms” rather sucks.

    I’m one of those folks that file taxes manually — I usually type everything into the PDFs, print them out and mail. I’m not a luddite — I just prefer DIY. So this year I went through the process of diligently entering everything into this new site, including extra forms. The site, having “checked” everything, proceeded to efile the 1040 with only half of the completed forms attached. So I had to wait a day for it to get rejected by the IRS, and then go back and print and file as I would have in the first place.

    Of course, your mileage may vary.

  14. I’m happy with turbo tax……..BUT…….

    What happened to the price of this stuff???

    I think the lowest price right now is $50 from Costco!! WTF?

    I think I used to pay $30 or so. I realize state is the pinch, but dayum……you’d think that more competition and the basic fact that the stuff doesn’t really change would drive the price DOWN more year after year, not UP!!!

  15. Torn. I’ve used turbo tax and an accountant through the years. Last year was an accountant. She did a fine job but with my homes, marriage, various dividends, the accountant cost us $200.

    Turbotax on the other hand incorrectly estimates me depreciation schedule for my rentals (structure value /27.5). How can they screw up that little math? Seriously, they’re off by 1k on each place!

  16. I’ve used TaxAct for the last several years and it is free not to mention you can get your taxes done in fifteen minutes if you have all your paperwork.. I can’t believe some people still go to HR block, seems like a rip off to me but they make it seem so difficult when its really not that hard at all..

    -locke

  17. Neural forex says:

    As far as I understood there are two versions of TurboTax – on-line and installed one. Is installed version free as on-line?

  18. ProfessorB says:

    I’ve used Tax Act for my 2006 through 2008 taxes and have been pleased with the site. Tax Act tries to upsell while you click through the questionnaire but I haven’t ever bought into it. I’ve always paid $0 for federal tax filing and my state’s tax web site has free filing as well.

  19. Jonathan,
    I thought I will let you know that Dollar Savings reduced their Savings rate to 3.2%. I was not sure how to contact you other than this way.

  20. I’ve used Turbotax for many years and love it. During the year, I’ll run maybe a half dozen estimates of the current year taxes using last years Turbo Tax. It won’t be perfect (due to changes in exemptions, tax laws, etc), but I normally have a very good idea of where I stand at any given time during the year. If you do these estimates a couple of times during the year, there really shouldn’t be any “surprises” when you do your taxes next year.

    I was bummed when I heard TurboTax was going to charge $9.95 to file more than one return, but I noticed when I did my dads return yesterday that they didn’t try to charge me anything. I guess they must have rethought that stupid idea. I’m sure TurboTax doesn’t like the idea of “professional” tax preparers buying one Turbo Tax disc and doing many returns with it.

  21. TaxSlayer. File both state and federal online with the premium version for 14.95, no hidden fees. Premium version has all of your deduction finders that TurboTax does. Classic version is 10 bucks.

    TurboTax is way way overpriced. By the time you file state and federal, you’re looking at 60 bucks.

  22. I’ve been a paper and pencil person forever. I understand my taxes very well, and I know each year what I want to tune for the next. And lots of the software stuff doesn’t play nice with Linux, and free software is my thing.

  23. I’ve been using TaxCut from H&R Block for years. It’s simple to use. My information is stored, so I don’t have to reenter it. They keep track of any carryovers, such as stock losses. We had several deductions and credits, but the software made it very easy. I’m already done and received our refund within 5 days with direct deposit. It’s so nice not to have to worry about it anymore.

  24. I refuse to pay anyone to get back money that belongs me. It just feels like extortion.

    I used the TurboTax online version last year and this year. But beware of the bugs in the system this year. This year if you try to prepare a state return and not e-file with them, they will try to charge you $30 just for the preparation. They also give you the option of filling out forms to make an amended return for previous years, but if you do that it will give you an error message that you can’t e-file this years federal return (amended returns have to be mailed and TT mistakenly lumps everything together). They also had a bug were the error check was stuck in a continuous loop if you had more than one employee expenses form. So basically, after taking out all the time to fill out all these forms I had to delete my 2007 amended return for Federal and state, delete my state return, and delete all the forms I couldn’t use anyway (not enough medical or employment expenses to qualify) before I could finally e-file my federal return for free.

    And then I still had to call up the IRS and wait 15 minutes to find out my PIN number that I used to e-file last year.

  25. Also, if you are a California resident, there is no hurry to file your state return since they won’t give you back your refund anyway. The state controller announced that any state returns filed on February 1st or later will not get a refund until CA’s budget situation is better. News reports estimate that will take years.

    Any state returns filed before Feb. 1st will receive their refunds. I planned on filing on January 30th and completed most of my return then but waited before filing to have time to error check it. Now I won’t get my state refund that I need to pay my ridiculous property tax bill.

  26. Kevin,

    That’s crazy! This has to be some kind of illegal. The money doesn’t belong to the state it belongs to you.

    Oh this is funny. This is from an article:

    “The state also will make good on debt payments — a top priority, since defaulting on bonds would preclude the state from borrowing money in the future.”

    If a tax refund is really just an overpayment of taxes that the government owes back to you…doesn’t that make it a “debt payment” on their end? This is why I put high numbers on my W-4 and state form (G-4 for me). Never let anyone borrow any money that you think you may need some time soon.

  27. H&R Block’s free file was totally free for me, and I was able to do itemized deductions. I make less than $50k and have no state return.

    I just bought my first house this year so needed to included all the property tax, mortgage interest and PMI premiums. I also had capital gains, interest, HSA distributions – a more complicated situation than ever before. Despite that, I decided I’d try to do my own taxes :)

    I found their site (which I’ve used for several years) works well and has always given me accurate results. At the end, the printed form was the full 1040.

    http://www.hrblock.com/taxes/p.....oductId=31 (top left product)

  28. This is very helpful!! …And I thought 29.99 was a steal….Ha!
    I will try Tax Act next year. Thanks

  29. I second the taxslayer.com review above. Turbotax has a 30k AGI limit to get it free, and taxslayer.com is 56k AGI for free state AND federal returns. I exceeded TurboTax this year but fell under taxslayers requirements. I put all my info into both turbotax and taxslayer as I was a bit unsure about taxslayer.com at first. Both came up with the same exact dollar amount for my returns and I e-filed with taxslayer for free. Its not as seamless as turbotax but it does the trick!

  30. Dollar Tree is not selling this or any other software.

  31. Thanks alot for the info.
    TurboTax Business download is free. Why not using it for the personal filling as well? just a thought.

  32. @lulu: Yes TT Business is free () but it can’t be used for personal/individual taxes and can’t be used for certain types of businesses either, like sole proprietorships.

  33. I tried to e-file this year using the Free File Fillable Forms. I was unable to resolve an error code 0189 which basically said that my income adjustments (lines 23 through 35, form 1040) did not agree with the total adjustments (line 36). They did agree, however, especially since line 36 is calculated by the software! I tried six times and received six identical rejections. I finally printed out the forms, signed the return, and submitted it by regular mail. I was unable to get anyone at IRS to discuss the problem as the software was not theirs. I found the website for Free File Alliance but, of course, there was no support service or complaint reporting capability there either. My belief is that the IRS should develop and support the software themselves and let the commercial folks cater only to the taxpayers who don’t have the level of intelligence required to self-file.

  34. anonymous says:

    I was able to file Turbotax deluxe version for free which covers my home ownership, children and some investments needs. It was pretty thorough. You can research for several discounts link or codes that will give you 25% off or in my case free, saving me about over $75 for fed and state filing includes e-file.

  35. I couldn’t even create an account on freefillableforms, due to a bug that puts an immovable popup up but cuts off the bottom portion. No help available from the private company that created this clunker. The IRS suggested hitting F11, but that didn’t help either. I agree with the poster who suggested that the IRS develop and support the software themselves (should be pretty basic). Whatever they paid this private company, it was a waste of taxpayer dollars.

  36. your information about TaxAct is incorrect – it does NOT import transactions from youe broker, unless you are using gainskeeper account. Also it ( software ) is very very very limited on what it can import. So far TT has the best functionality .

  37. Any tried the new Free version of turbotaz 2009 , just being mailed now -12-14-09 , worth installing ? will it print w-2′s also?

  38. STAY AWAY FROM FREEFILEFILLABLEFORMS.COM !!!

    I had my return rejected 3 times because they insist on including middle inital and suffix of all qualifying children on Schedule EIC. They do not include columns for these, and make you enter the data as part of the first name and last name fields. After trying every possilbe scenario and combination, including not entering the middle and suffix, I finally gave up. I’d rather not waste any more time on a poorly designed, poorly executed program. Whoever designed the software was too lazy to add to extra columns and map out the fields.

    And get this, the software also defaults a choice on the EIC that pegs your children as permanently disabled, which will also trigger an automatic rejection. Way to go guys! If I could find a place to complain, (which you cant because they hid it, another sign of horrible sw and backing company), I would have told them exactly what I thought. As you can tell, it would be less than flattering.

    Back to TurboTax yet again. It’s cheaper than going to a professional, and AT LEAST IT WORKS!!!

    Screw FREEFILEFILLABLEFORMS.COM !!!!!!

  39. Jonathan says:

    Turbo Tax is a terrible program. I am a tax preparer, still needing to finish the corporate portion of the exam to get my EA certification. I have used Turbo Tax and trust me, you can miss tons of deductions. The wording is not clear and the help menus are abysmal. As a tax preparer my summers are spent fixing Turbo Tax returns, I do not recommend that product to ANYBODY.

  40. JUST SAY NO TO FREEFILLABLEFORMS! I came to this website via a link on the IRS website, thus thinking it a trusted and working website. I filled out all the forms and schedules was happy with the result, efiled. Got a rejection back saying that my child’s ss# and LAST NAME did not match what the IRS had in thier files. I double checked the SS#s with my return from last year and I believe I am pretty certain of my child’s last name! Soooo, I go to log in, see what the problem is and hopefully re-efile, only to find out that my account at FreeFillableForms has been wiped out. It does not recognize my un and pw. So I re-register, with the same un, password, etc. and it sets up a new account for me with that same info. I did not, as I would have hoped, receive a message that the un/pw was already in use.

    I am very concerned about where the info with our SS#s is….does anybody know anything about this?????

  41. TaxAct is apparently not free!!!! After all the work of filing they are trying to charge me $9.95 for a FREE federal return. Don’t make the same mistake I made and be tricked into wasting time with them!

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  1. [...] less than 56,000 that you have verity of options available for FREE filing. In fact, according to Jonathan @mymoneyblog, there are 20 different software companies available from the Free File Alliance at IRS.gov. If you [...]

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    [...] Free Tax Filing Options: IRS, TurboTax, TaxCut, TaxAct … [...]

  4. [...] as the income-restricted “Free File” above. Via Consumerist. Part of this Blog was inspired by MyMoneyBlog Possibly related posts: (automatically generated)Free TurbotaxFree Federal and State Tax [...]

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