When tax time rolls around, many people opt to take advantage of online tax preparation software, and there’s no shortage of choices. But when it comes to comparing tax software, which one is the better deal?
To begin with, FreeTaxUSA security measures are top priority, and its straightforward pricing structure is a refreshing change. Keep reading to learn more about what FreeTaxUSA has to offer and whether it offers free state tax filing options.
FreeTaxUSA Review: Is FreeTaxUSA Really Free?
With all of the other online tax software out there, you might be wondering how FreeTaxUSA can offer this free tax filing service. According to the company, it makes its money by charging for its Deluxe tax-filing option and state returns, as well as other optional services. To help you decide if this service is right for you, take a look at how FreeTaxUSA compares with other providers.
Comparison of Tax Products
State Return Cost
Free and Deluxe
Deluxe version $6.99
Free, Deluxe, Premier, Self-Employed
$0 to $90
$0 with the Free edition; $40 for all other filing options
Simply Free, Classic, Premium, Self-Employed
$0 to $47
Simply Free includes state returns; $32 per state for all other options
Free, Deluxe, Premier, Self-Employed
$0 to $64.95
$19.95 for Free version; $44.95 for Deluxe, Premier and Self-Employed versions
Basic, Deluxe + State, Premium, Premium & Business
$19.95 to $79.95
Basic and Deluxe versions require a $39.95 state program, plus a $19.95 state filing fee. All other versions come with a free state program but require a $19.95 state filing fee.
Pricing accurate as of Feb. 25, 2021
FreeTaxUSA Products and Services
FreeTaxUSA offers users two options for filing online: Free and Deluxe. Although filing your federal tax return is free with either product, you’ll have to pay extra to file a state return. Here’s what you need to know about both filing options.
Features In Common and Features Lacking
Although the Deluxe version offers more than the Free version of FreeTaxUSA, both programs have features in common. Here’s a look at what you can expect from FreeTaxUSA no matter which version you choose:
More than 350 deductions and credits
Previous-year tax information import
Automatic tax return backup
Filing history comparison
Free customer email support
Free prior-year tax information import
FreeTaxUSA supports major tax forms and even some of the lesser-used ones, but there are some tax situations that it doesn’t support. Unsupported situations include:
Customers or preparers living outside the U.S. at time of tax filing
Casualty or theft gain or loss for business and income-producing property
High-value property donations over $5,000, such as collectibles, equipment, or real estate
Free Tax-Filing Option
With the free option from FreeTaxUSA, filing your federal tax return online won’t cost you anything. State returns are $12.95.
With the free option, you can file individually or jointly. The software supports the following tax forms, as well as many more:
You can also use this option to report any home, rental, investment or charitable donation data. And if you happen to be self-employed, the free version can work for you as well.
Discover: Self-Employment Tax Deductions
Deluxe Tax-Filing Option
Although not free, the total cost for the Deluxe option is a good value at $6.99. State filing fees remain the same as with the free version at $12.95.
With the Deluxe option, you’ll get everything the free option offers, plus some added convenience features like free priority support with live chat. With this option, you’ll essentially be moved to the front of the line to help you get issues resolved more quickly. Live chat is available 8 a.m. to 12 a.m. EST, Monday through Friday — which will allow you to talk with a tax specialist.
Another feature included with the Deluxe option is unlimited amended returns. And, in the unfortunate event that the IRS chooses to audit you, you’ll be able to access resources with FreeTaxUSA’s complimentary audit support.
Pros and Cons of Using FreeTaxUSA
As with any tax preparation production, FreeTaxUSA has pros and cons. Here’s what you need to know:
Advantages to using FreeTaxUSA include:
Its free version of tax filing offers much more than many of its competitors. Items like tax return backup, filing history and small business income are included.
It only costs $12.95 to file a state tax return. Competitors charge as much as $44.95.
Here are some drawback to using FreeTaxUSA:
You can’t jump ahead to other sections. You can only check your progress or look at sections you’ve completed.
Audit assistance is only available for filers using the Deluxe edition. This feature doesn’t cover state returns, and you won’t have direct representation to interface with the IRS like other tax software companies provide.
Is FreeTaxUSA the Right Choice for Me?
Tax filers who usually opt for the basic or free versions of other tax software providers likely wonder which free online tax service is best. When comparing, it’s clear that FreeTaxUSA’s free version offers many more features than its competitors.
The only difference between the Free and Deluxe versions of the software is the level of support. And for only $6.99, you can upgrade. In addition, if you are required to file a state return, you’ll only pay $12.95 to do so.
Overall, FreeTaxUSA offers a great product value and the included features will likely be sufficient for the majority of tax filers.
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Cynthia Measom contributed to the reporting for this article.
This content is not provided by the companies mentioned. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved, or otherwise endorsed by FreeTaxUSA.
Last updated: Feb. 25, 2021