You've seen the advertisements by now: "Start your return for free" or "file for free". But honestly, are these tax software and service companies really free?
Not to mention the fact that the IRS has the FreeFile alliance, which is a group of companies that have committed to offering free filing for eligible individuals.
We took a look at every major tax filing software and service, and broke down who is offering free filing and who isn't. Many of these companies offer free Federal returns for certain filers, but then charge for the State return. Or even worse, charge more for a State return than other versions of their software!
How These Companies "Get You"
After trying out almost every piece of tax software this tax year, we've learned something - while many companies advertise that they offer free filing for your tax return, many don't. Furthermore, even those that do try to up-sell you at every turn.
If you're able to truly file your taxes for free - you should! And you should use the best software to do it.
You shouldn't have to spend 30-45 minutes going through your tax return, only to discover that you don't qualify for free, and you've been upgraded to the "Deluxe" version - which happens ALL THE TIME!
You also shouldn't have to upgrade "to get a bigger tax refund". We saw that several times - simply because the free versions of many companies don't itemize - and that could save you more money.
Many of these companies also get you with charging for a state return. If you live in one of the states that don't require a tax return - lucky you. But for those of us that do, it's just another fee to potentially pay.
Here's how all the major companies compared.
Which Companies Offer Free Federal and State eFile Tax Returns?
If you want the short answer on our recommendation for 2017 - we recommend H&R Block Online 2017 for free file. They have the most "robust" free file that allows for not only Federal and state returns, but also for some itemized deductions. Check out H&R Block Online here.
Note For Last Minute Filers: almost all free file for state taxes goes away on April 1 for most companies on this list. Also, many of the prices and offers change the closer it gets to the tax deadline. File early next year to take advantage,
Free Federal Return?
Free State Return?
Free for 1040EZ/A, and some itemizers. Read our H&R Block Review.
Free for 1040EZ/A. Read our TurboTax Review.
Free for 1040EZ/A, some paid add-ons. Read our TaxAct Review.
100% Free, but having some problems. Read our Credit Karma Tax Review here.
State is $12.95 additional. Read our FreeTaxUSA Review.
"Free to Start", not to file. They charge a $14.95 or $19.95 e-File fee. Read the 1040Now review.
Free 1040EZ. Check out the 1040.com review.
Free 1040EZ. Read our review.
Free File with many, many stipulations.
State is $26.99 additional. Read our eSmart Tax Review.
State is $9.95 additional. Read our OLT Review here.
State is $12.95 additional. This is the same company as FreeTaxUSA. Read the TaxHawk Review here.
Free for 1040EZ only. Read our Tax Slayer Review.
Actually free. For everything. Read our DIY FreeTax.com review.
As you can see, only 9 companies actually offer truly free options for tax filers. Those companies are TaxAct, TurboTax, H&R Block, Credit Karma Tax, FileYourTaxes, FreeTax.com, 1040.com, EZTaxReturn.com, and TaxSlayer.
All of the other companies on the list might advertise free, but it's limited. Here's what each company really offers.
TaxAct does offer free tax filing for individuals filing a 1040EZ or 1040A.
This includes both Federal and State returns.
The free version does not include phone support, and doesn't allow you to import your prior year's information automatically. You can read more about what TaxAct offers in our TaxAct Review.
TurboTax offers a truly free tax filing option for the first time this year for individuals filing a 1040EZ or 1040A. They have the best user interface and we highly recommend their free version.
This includes both Federal and State returns.
You can read more about what TurboTax offers in our TurboTax review.
H&R Block offers a free Federal and State return this year. They also expanded what counts for free filing, making them our top choice for individuals that qualify for free file. W-2 wage earners (including homeowners, people claiming childcare expenses, student loan interest deduction or charitable deductions and recipients of the earned income tax credit) can all get free file this year.
You can read more about what H&R Block offers in our H&R Block Review.
Credit Karma Tax
We're really excited about the potential launch of Credit Karma tax this year. They are promising a 100% free tax filing experience. Based on their other product, we think this is going to be good.
We'll update more as soon as they open it up. Learn more about Credit Karma Tax here.
FreeTaxUSA advertised themselves as the best place to file your taxes for free. That's why I was surprised to see them charging $12.95 for State Returns, even under their "free" program.
But it's their advertising that is upsetting:
I counted, and they used the word "Free" 6 times, when in reality they charge $12.95 for the state return. I'm not quite sure how that is 100% free?
Beyond 1040now.net having the second worst site of all tax preparation companies, their pricing is exceptionally confusing. Their site says Tax Year 2017 - Free online tax preparation. But none of their filing options are free.
They clearly charge $14.95 or $19.95 - there's no free! So why do they start by saying free online tax preparation?
1040.com doesn't show their pricing anywhere on their homepage. However, they do offer free filing for 1040EZ filers. You have to sign up first and then you can know that they charge for their State filing.
I wish companies would make it transparent in their pricing.
ezTaxReturn is another company that has only a free filing option for 1040EZ, but it advertises on it's site "Free to Try". I find that to mean there will be no costs involved, but apparently I'm wrong in this.
If you want to try it for free and don't qualify for the 1040EZ, you'll end up paying $19.95 for their lowest priced option - which is clearly not free, but also higher than other companies like TaxAct.
FileYourTaxes.com is hands-down the hardest to use, most un-user-friendly site available to the tax filing consumer. But, strangely enough, they actually offer Free tax filing.
However, it's not without a LOT of stipulations. FileYourTaxes.com selected to offer services to those taxpayers, with an Adjusted Gross Income between $8,000 and $60,000, and who were between the ages of 15 and 65 at the end of the tax year, residing anywhere in the United States.
They also offer free State eFile for California consumers, if the individual is filing a 540-2EZ.
Confusing? Yes. Free? Yes.
eSmart Tax is another company that offers free Federal returns, but charges $29.95 for state returns. Make sure you read all the way through, because they sure don't make it stand out much:
And they still feel comfortable ending it with "Start For Free".
Jackson Hewitt is another major tax preparation company that is offering truly free tax filing this year. While most of their site is designed to get you into their branches, you can file online for free.
Jackson Hewitt offers free tax filing for 1040EZ forms. This includes both Free Federal and Free State returns.
OLT.com is another online tax software company that hypes up "Free Federal Return For Everyone" because they charge additional for the state return.
You're going to pay $9.95 more for a State Return with their free edition. Also, their tax software is the hardest to use of any we've reviewed. Check out our OLT.com review here.
Tax Hawk is the same company as FreeTaxUSA. It also advertises a free return, but charges for the state. For example, their current web header says "Free Tax Software...Federal & State Return Preparation". But, in reality, it's only free Federal.
If you sign up for their Free Federal Return, you'll pay $12.95 for the state return. Read our full TaxHawk review here.
I appreciate Tax Slayer as being the most honest company when it comes to what you're really getting for free. They clearly advertise that the Tax Slayer Free Basic Return will allow you to file a Form 1040EZ for Free.
For the 2017 - 2018 tax season, TaxSlayer ensured that their 1040EZ tier is truly free. You can read our full TaxSlayer Review here.
FreeTax.com is the most interesting tax preparation company online currently. They offer truly free tax filing - no strings attached. You can file any form, have any income level - it's all free.
Now, the site is a little hard to navigate, and honestly, I had to check the "free" aspect a bunch of times. But it's legit. It's a project by Liberty Tax and eSmart Tax to offer free filing solutions.
Final Reminder About Free Tax Filing
A last reminder about free tax filing. If you don't live in a state with income tax, you only have to file a Federal tax return - so you have a lot more free options! In that case, find a service you like that's easy to use and you can stick with it for years to come.
If you want to estimate your taxes without "Starting For Free", consider using a tax estimator - those are almost always free.