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 (you may have seen the countless news articles on this recently).
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!
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 2020 - 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.
Right with H&R Block is Credit Karma Tax. Credit Karma Tax has some limitations (which is why we put is second), but it will work great for the vast majority of tax filers. Check out Credit Karma Tax 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!
Note: The tax prep offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all tax prep companies or all tax prep offers available in the marketplace, although we are always striving to keep our content updated.
List Of Free Tax Software Companies
Free for simple returns. Read our H&R Block Review.
Free for simple returns. Read our TurboTax Review.
Free for W2 and no dependents. Read our TaxAct Review.
Credit Karma Tax
100% Free. 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 $19.95 e-File fee. Read the 1040Now review.
Free simple tax returns. Check out the 1040.com review.
Free Federal and State for EITC filers. Read our review.
File Your Taxes
Free Federal for certain income levels.
State is additional. Read our eSmart Tax Review.
Online Taxes (OLT)
State is 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 simple tax returns. Read our Tax Slayer Review.
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 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 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 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 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?
Note: FreeTaxUSA typically raises their state tax return price closer to the tax deadline.
Check out our FreeTaxUSA review here.
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 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 has made their prices very transparent this year, and we appreciate that. They offer a limited free file option for both Federal and state. Might be a good choice for some, but not for everybody.
Check out our ezTaxReturn review here.
We honestly couldn't figure out what you were going to pay on this site this year. They claim they are free for certain income levels, but the pricing for this isn't easily found and/or advertised.
We mark this site as confusing...
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 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 Simply Free return will allow you to file a simple tax return for Free.
For the 2019 - 2020 tax season, TaxSlayer continues on that truly free pricing. You can read our full TaxSlayer Review here.
FreeTax.com was removed from the above list this year because they are no longer active. They re-direct to Liberty Tax.
Frequently Asked Questions
Is there such a thing as free tax software?
Yes, there are lots of free options to file your taxes. The IRS has the Free File Alliance, and most tax software offers a free level.
Are there any restrictions?
Yes, all free software (including the IRS Free File Alliance) has restrictions - including income, forms required, state return options, and more.
Are Federal and State tax returns free?
Most of the free file options only offer Federal tax returns for free. However, a few options offer both Federal and state tax returns for free.
Which tax software is free?
Credit Karma Tax and H&R Block Free are the most robust free file options. Beyond that, TurboTax, TaxSlayer, Tax Act, FreeTaxUSA, and more all offer free file.
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.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.