For years, we’ve been waiting for this! Credit Karma Tax is offering a bug-free, high-quality and completely free tax filing software.
Credit Karma is one of the the few tax filing software services that truly delivers free tax filing for Federal and State taxes.
The tax filing service isn’t just a bare bones filing option. Filers get a free audit defense guarantee which is a huge value add.
But it's a relative newcomer in the online tax filing space, and it had some learning curves in the first three years.
So should you use Credit Karma Tax for filing your 2019-2020 tax return? In a lot of cases, the answer is YES! Here’s what you need to know about the service and how it compares on our list of the best tax software.
- Free Online Tax Filing
- Improved customer service and usability
- Doesn't support multiple states, don't recommend for investors or real estate owners
Credit Karma Tax Details
Credit Karma Tax
Credit Karma Tax Review Video
Credit Karma Tax - Is It Really Free?
Credit Karma Tax is completely free for all filers. The free software includes both State and Federal taxes.
However, Credit Karma doesn’t support every single filing situation. For example, if you need to file two state returns (partial year returns), Credit Karma does not support that situation.
It also doesn’t support K-1 forms, Schedule J forms, Foreign Earned income, Earned Income Tax Credit (for people with non-dependents), and a few other scenarios. Most standard situations (including self-employment income) are covered.
Credit Karma Tax Price And Plans
Credit Karma Tax is completely free for state and Federal filing.
They also have a guarantee this year on their product. If you receive a larger federal tax refund amount or owe less in federal taxes using the same tax return information when filing an amended return through another online tax preparation service, then you may be eligible to receive the difference in the refund or tax amount owed up to $100 (minimum $25) in the form of a gift card from Credit Karma Tax.
It's not a lot, but should add some peace of mind to some filers.
Credit Karma Tax Navigation
Credit Karma Tax starts with a quick survey of your potential income, deductions and credits. It uses this information to serve up a customized “menu” of information you need to fill in.
As a user, you’re responsible for entering your information in each section. Once you’ve completed each section, Credit Karma guides users through a review of information, so you can correct mistakes or enter information that you may have missed.
Credit Karma Tax Ease Of Use
I was impressed with Credit Karma Tax’s ease of use.
It allows you to import W-2 forms, and the built-in calculators are easy to understand. For some of the more complicated schedules (such as Schedule E for rental income or Schedule C for self-employment income), Credit Karma breaks up the information into easy to understand chunks.
That makes it easier to enter the right information the first time.
Credit Karma Tax Knowledge Articles
Throughout the software, Credit Karma has “mini knowledge articles” in information bubbles. You can read the short articles by hovering over the little i icon. For more robust articles, users can enter their inquiry in the search bar. The search is smart enough to bring up links to where you can enter certain information as well as articles related to the search.
Credit Karma Tax Extras
Users who file through Credit Karma Tax get free audit support from Credit Karma Tax. This means that users will get free help from a tax preparation professional who is called a case resolution specialist. Where applicable, the specialist will draft letters to help you communicate with the IRS in the event of an audit.
Does Credit Karma Tax Support Crypto Investments?
Credit Karma Tax supports cryptocurrency investments, but you’ll have to figure out the USD price associated with any trades or mining activity.
Customer Service Experience
Historically, Credit Karma’s downfall has been it’s customer experience and/or various support for specific forms. It only offers technical support, but the software seems to be in good shape this year.
If you’re interested in giving Credit Karma Tax a shot this year, be sure to get into the software at least a few days in advance of the filing deadline. If something goes wrong, you may need to bail at the last minute and use another service.
Is Credit Karma Tax Secure?
Credit Karma is a site that’s committed to online security. All users must set up multi-factor authentication, and Credit Karma does not sell your information.
However, your information will be used to help refine Credit Karma’s “matching algorithms” that are used to match consumers (that’s you) to credit card and other lenders who want you to apply to their cards. This is not a direct sale of your information, but it is a way in which your information may be used to help Credit Karma make money.
Who Should Use Credit Karma Tax In 2019-2020?
Credit Karma Tax is free, and the software is reasonably easy to use.
In 2020, we’re giving Credit Karma Tax a conditional stamp of approval. Assuming that the bug-free testing during the “pre-tax” season flows through to filing season, this is hands down the best free filing software on the market. It’s an incredible value, especially if you have Schedule E or Schedule C income. As long as Credit Karma’s servers can handle the volume of traffic, we expect this to be an excellent service for filing taxes in 2020.
Looking for more than a “conditional” stamp of approval? TurboTax, H&R Block, and TaxSlayer consistently deliver the best possible filing experiences, but are more expensive. FreeTaxUSA offers a similar experience to Credit Karma’s experience, but it costs just a little bit more.
There are a few scenarios that Credit Karma doesn’t support (notably, it does not support you if you lived in more than one state in 2019). But other than the unsupported filers, active traders, and perhaps real estate investors, Credit Karma is a great option in 2019-2020.
It’s certainly the best completely free option, and it rivals some of the top software.
** Editors Note: due to the high volume of comments and concerns about this software, we left last year's comments available for readers to see. Please check the dates on comments before making any assumptions.
Credit Karma Tax
- Pricing - 100
- Ease Of Use - 90
- Customer Service - 60
- Filing Options - 80
Credit Karma Tax Software offers truly free online filing, and has dramatically improved over past years!
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 here and here.
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.