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!
Here's our list of the top free tax software so you can file your tax return for free!
If you want the short answer, check out H&R Block Free Online Tax Filing and Credit Karma Tax this year.
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 2019 - we recommend H&R Block Free Online Tax Filing 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!
List Of Free Tax Software Companies
Company | Free Federal? | Free State? | Notes | Try It |
|---|---|---|---|---|
H&R Block | Free for simple returns. Read our H&R Block Review. | |||
TurboTax | Free for simple returns. Read our TurboTax Review. | |||
TaxAct | Free for W2 and no dependents. Read our TaxAct Review. | |||
Credit Karma Tax | 100% Free. Read our Credit Karma Tax Review here. | |||
FreeTaxUSA | State is $12.95 additional. Read our FreeTaxUSA Review. | |||
1040Now.net | "Free to Start", not to file. They charge a $19.95 e-File fee. Read the 1040Now review. | |||
1040.com | Free simple tax returns. Check out the 1040.com review. | |||
ezTaxReturn.com | Free for EITC filers. Read our review. | |||
File Your Taxes | Free Federal for certain income levels. | |||
eSmart Tax | State is additional. Read our eSmart Tax Review. | |||
Online Taxes (OLT) | State is additional. Read our OLT Review here. | |||
Tax Hawk | State is $12.95 additional. This is the same company as FreeTaxUSA. Read the TaxHawk Review here. | |||
Tax Slayer | Free for simple tax returns. Read our Tax Slayer Review. | |||
FreeTax.com | Actually free. For everything. Read our DIY FreeTax.com review. |
All of the other companies on the list might advertise free, but it's limited. Here's what each company really offers.
TaxAct
TaxAct does offer free tax filing for simple tax returns. Must be W2 and have no dependents.
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
TurboTax offers a truly free tax filing option this year for individuals filing a simple tax return. They have the best user interface and are one of the easiest to use. However, their free version is more limited than other companies.
This includes both Federal and State returns.
You can read more about what TurboTax offers in our TurboTax review.
H&R Block
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 of Credit Karma Tax this year. They have significantly improved their product from last year, and they are still offering a 100% free solution!
We'll update more as soon as they open it up. Learn more about Credit Karma Tax here.
FreeTaxUSA
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?
Check out our FreeTaxUSA review here.
1040Now.net
Beyond 1040now.net having the second ugliest website of all tax preparation companies, their pricing is exceptionally confusing. Their site says Free online tax preparation. But none of their filing options are free.
They clearly charge $19.95 - there's no free! So why do they start by saying free online tax preparation?
1040.com
1040.com has a free filing option this year which is great to see. You have to scroll down a bit on their homepage, but they have it. It is limited, similar to TaxAct, where you're not allowed to have dependents.
Check out our 1040.com review here.
ezTaxReturn.com
ezTaxReturn has made their prices very transparent this year, and we appreciate that. They offer a limited free file option, and they also only offer limited states. Might be a good choice for some, but not for everybody.
Check out our ezTaxReturn review here.
FileYourTaxes
People earning an AGI under $66,000 can get free Federal filing and will pay $36.50 per state. All other filers will pay $44.75 for Federal basic filing. If you need forms beyond W2 and interest, you’ll pay $4.00 per form, and $1.00 for every W-2 form past your first two forms. The total cost for my filing would have been $65.75 plus $36.50.
We mark this site as confusing...
eSmart Tax
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 their free is also pretty limited.
We're also disappointed by that incredibly high price point for state tax returns.
Check out our full eSmartTax review here.
OnLine Taxes (OLT)
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
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.
Tax Slayer
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 Simplye Free return will allow you to file a simple tax return for Free.
For the 2018 - 2019 tax season, TaxSlayer continues on that truly free pricing. You can read our full TaxSlayer Review here.
FreeTax.com
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.
Preston @TheDrunkMillionaire says
Great post Robert! It’s nice to have a side-by-side comparison of the various tax software options. I may rethink my usual H&R block choice..
Ed says
The information posted is not 100% accurate. ezTaxReturn offers free filing through the IRS site and through the Free File Alliance site.
Robert Farrington says
We put it as a No because it’s misleading. You can free file with ezTaxReturn in select cases (under $62k in gross income and live in one of 15 states) AND you go through the IRS free file link. IF you go directly to their website, they don’t offer that for filers. And they still always charge for state.
Mike says
You have to give FreeTax.com your cell phone number. Why is that? This seems too intrusive.
Robert Farrington says
Don’t know but would be curious as well – likely marketing.
Craig says
Just want to let you know that OnLine Taxes does offer free state returns if you click on their link from the state tax return website, at least for Virginia. Otherwise they charge. They were also very good at responding when I inquired about why I was being charged (I clicked on their link from the IRS website), and they took the charge off.
I’m curious though. How do the free ones earn money for providing this service? Does the IRS pay them something?
Robert Farrington says
The program, called Free File, was set up three years ago in a deal the IRS struck with companies that make tax preparation software. In return for not competing with them by developing its own tax preparation package, the IRS required tax software makers to provide a free version of their services to 70% of all taxpayers. That 70% cutoff is what changes every year for the 1040EZ and similar returns.
Louise Ornelas says
Quick question? Do the tax software companies sell the software to big companies like H&R Block/Turbo Tax? Or are the companies you are referring to actually H&R Block/Turbo Tax?
Robert Farrington says
What do you mean? H&R Block and TurboTax are a few of the dozens of companies that develop filing software
Jim Stone says
Free always scares me. I am 70 and have always have filed my own taxes. Fill in the blanks not too difficult. It would be nice if the IRS would let us E-file without the flim flam or going through a company that has a motive that certainly isn’t pure. In the meantime I will mail mine in. I files 27 March and refund was mailed the 21st of April. It took about an hour and a half of my time.
Robert Farrington says
Remember, the reason that IRS and these companies offer free filing is because the IRS made an agreement not to develop their own software in exchange for these companies providing it for free for certain filers.
Carl says
Robert, do any of these free tax services include filing schedules for employee healthcare and HSA contributions and distributions?
Robert Farrington says
I believe H&R Block More Zero supports HSA contributions (not sure about distributions). Here’s the list of forms that are supported with free: https://www.hrblock.com/taxes/doing_my_taxes/products/popup/diy_6.html
I would contact customer service at any company you prefer to double-check.
M Wu says
I tried using H&R Block’s free file but they said I’d have to pay to file a 1099-MISC and Schedule C. This directly contradicts what’s listed here as supported under free: https://www.hrblock.com/taxes/doing_my_taxes/products/popup/diy_6.html
Has anyone checked if the other websites handle 1099-MISC and Schedule C for free? TaxSlayer does not.
Thanks
Robert Farrington says
There is no limitations on the forms you can file with the Free version. It must be an option you selected. Anything else on your return that stands out?
On our list of the Best Tax Software in 2018, there are other options (including a free option).
Julie says
Thanks for the article. I am low-income and used H&R Block for free federal and pay for CA for 2014 and 2015. In 2016 I did my state taxes for free. But NOW, for 2017, they are charging $29.99 to use my prior year data to populate my forms – Pretty sure this was free before. What gives?
Robert Farrington says
All the free versions we’ve seen don’t allow import of prior year. You can enter it manually, but if you want to have them do it, you’re going to have to pay.
Dolores says
Just uses TaxAct and really it is not totaly free …clicked on import last years info but they don’t tell you there is a $15.00 charge for this and then it didn’t do it anyway but still charged me also they charge a bank transfer fee for direct deposit!
Robert Farrington says
Every free software charges as an “upsell” the ability to import your prior year info.
johnbleroy says
Tax Act is not offering free filing of the 1040A this year. Their advertising is full of FREE federal, FREE state, etc., but when you go through the process and you end up on a 1040A form, there is no way to complete filing without having to pay $14.95.
sam says
fantastic to-the-point article and very useful
My question is
i dont like putting my tax info online
so i prefer downloading tax software(like HRBlock or Turbo), do taxes and then eFiling
each state eFiling costing me $20
Pls recommend tax software as part of purchase price includes/allows
-Fed filing + 2 state filing (or something close)
-Free eFile for Fed efiling and 2 state efiling
Thanks
Sam
Robert Farrington says
We actually don’t even recommend you do that anymore. It’s actually safer and more secure for your data to use an online service. As such, we don’t review desktop software anymore.
Orlando Benitez says
I have a one employee sub chapter s corp, are there any free or lo cost on line company that would help with a corporation tax filing?
Robert Farrington says
TaxAct is the lowest I’ve seen but I haven’t researched filing corporate taxes.