What is the Best Tax Software for Free?
Taxes, taxes, taxes. Taxes are painful enough, filing them should not be. Nor should they cost an arm and a leg to file! So… what is the best tax software for free?
Great question!
Let’s first define: What are taxes?
Taxes are required payments individuals and business provide to the government. Said taxes are used to fund shared public services (roads, schools, police department, and other government services).
Why do we care about the software for taxes?
Filing and paying accurate taxes and on time are required for individuals and businesses. Figuring the amount in which to pay to the government is where the complexities lie. Not everyone is familiar with the tax laws, systems, or general practices, which is why people will either elect to hire tax preparer professionals or defer to tax softwares that offer guidance.
Hiring tax professionals is often quite costly, and only truly beneficial to those with complicated financial situations. Therefore, looking into software for taxes is often a popular choice for those who have less complex financial situations.
This post is about the best tax software for free.
Now that we’ve gotten those out of the way, let’s dive into the 5 best tax software for free!
1. Turbo Tax
Turbo Tax has several inclusive options, many of which are paid (Live Assisted, Deluxe, Premier, Self-Employed, Full Service, and more). You can often find these packages at a discount, depending where you’re purchasing. For example, Costco runs discounts for all of the Turbo Tax packages Costco sells.
For those interested in the free edition, TurboTax is a popular choice, especially if you have a simple tax return. While filing for federal taxes is almost always free, you do have to pay to file for the state, depending on which state you’re filing for.
The fees are as follows:
Software | Federal | State |
TurboTax (Free Edition) | Free for simple returns only | $0-59 per State |
TurboTax | $59-119 | $0-59 per State |
TurboTax’s definition of simple returns include: filing using only form 1040, no additional complexities. Want to find out what situations it covers? Check out the list below:
- W-2 income
- Limited interest and dividend income reported on a 1099-INT or 1099-DIV
- Note: If you have any capital gains from investments, this is no longer classified as a simple return.
- IRS standard deduction only (no itemized deductions)
- Earned Income Tax Credit
- Child Tax Credits
- Student Loan Interest Deduction
2. H&R Block
Similar to Turbo Tax, H&R Block also offers several options, in which many are paid (Deluxe, Premium, Self-Employed). However, if you have a simple return, H&R Block could be another good option.
For those interested in the free edition, H&R Block is a popular choice, especially if you have a simple tax return. Filing for federal taxes is free for simple returns, you do have to pay to file for the state, depending on which state you’re filing for.
The fees are as follows:
Software | Federal | State |
H&R Block (Free Edition) | Free for simple returns only | $0-49 per State |
H&R Block | $55-110 | $0-49 per State |
In general, H&R Block has a very user-friendly interface, allowing you to either manually enter or import information.
3. FreeTaxUSA
Out of all the softwares presented in this list, FreeTaxUSA is the most inclusively affordable option (second to the IRS Free E-file, but limited people are eligible for that). FreeTaxUSA is the only software that provides free filing for federal taxes without any limitations (i.e. simple returns only). While you can’t get away with free filing for the state, the cost to file state taxes are significantly lower than the other software options: $15 vs $34 (lowest in this list).
The fees are as follows:
Software | Federal | State |
FreeTax USA | Free | $14.99 |
Granted, the user interface is not quite as nice as TurboTax or H&R Block; however, it gets the job done. It offers some guidance, though not as much as the other, higher priced softwares.
An additional feature that’s pretty awesome is that based on your responses, it has a projected refund/taxes owed at the top right corner of the screen, showing you what choices impact the amount you’ll either owe or be refunded.
4. TaxAct
Similar to Turbo Tax and H&R Block, TaxAct also offers several options (Deluxe, Premier, Self-Employed, Xpert Assist, and more), in which many are paid. However, if you have a simple return, TaxAct could be another good option.
For those interested in the free edition, TaxAct is a popular choice, especially if you have a simple tax return. Filing for federal taxes is free for simple returns, you do have to pay to file for the state, depending on which state you’re filing for.
The fees are as follows:
Software | Federal | State |
TaxAct (Free Edition) | Free for simple returns only | $33.95-44.95 |
TaxAct | $24.95-64.95 | $33.95-44.95 |
One of TaxAct’s strongest pros is that it offers tax help support, regardless of which tier you’re using. With other softwares, this type of support is a paid feature. So if you have any questions, you’ll be able to reach out and actually ask someone. Additionally, TaxAct offers the option to review your return prior to filing. This is to ensure that your return is accurate. Again, this is a great feature that many may opt to choose TaxAct.
5. IRS Free File
If filing for 2022 taxes, the IRS Free File offers a Guided Tax Preparation. This is a great option for those who qualify. To qualify, your AGI (adjusted gross income) must be $73,000 or less.
Items included in this Guided Tax Preparation:
- Free federal return
- Answer simple questions
- Guided preparation does all the math
- (Some) state tax preparation and filing are free
The fees are as follows:
Software | Federal | State |
IRS Free File | Free for those who qualify | Some state tax preparation and filing are free |
Again, if you qualify for this, the IRS Free File is a good option.
To reiterate, the 5 best tax software for free are:
- Turbo Tax
- H&R Block
- FreeTaxUSA
- TaxAct
- IRS Free File
Comment below if you want a more comprehensive review of each of the paid softwares!
There you have it! The 5 best tax software for free. Interested in learning more about where to put your tax refund? Check this post out for sinking funds examples!
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