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 two years.
So should you use Credit Karma Tax for filing your 2019 tax return? In a lot of cases, the answer is YES! Here’s what you need to know about the service.
- Free Online Tax Filing
- Improved customer service and usability
- Doesn't support multiple states, don't recommend for investors or real estate owners
History of Credit Karma Tax
Three years ago, Credit Karma introduced Federal and State tax filing software. Unfortunately, the free software came with glitches and issues with customer service which were only revealed after Credit Karma completed it’s rollout. In 2018, some of the glitches were fixed, but others popped up which led to a poor recommendation last year.
However, in 2019, Credit Karma has beefed up its customer service, added usability to it’s platform, increased its help features, and is still completely free.
With these additions in place, we’re again recommending Credit Karma Tax software. However, we're paying attention to user feedback closely to see how the improvements pan out over tax season.
Credit Karma Tax Navigation
Credit Karma Tax uses a self-guided navigation which means that users have to read through different sections to find the relevant areas to enter. However, once a user selects “Start” from the menu, Credit Karma judiciously uses questions to help users accurately enter their information.
As far as self-guided navigation goes, Credit Karma Tax offers an excellent experience. In particular, the search function at the bottom of the Federal filing page made it easy to find topics (such as estimated taxes) that I didn’t find right off the bat.
If you’ve got a particularly difficult tax filing situation, you may need to opt for a robust Q&A navigation software (such as H&R Block or TurboTax), but for most others (including many new filers), Credit Karma’s self guided navigation will work fine.
Credit Karma Tax Ease Of Use
Overall, Credit Karma Tax proved to be easy to use for the scenarios it supports. You can easily import a W-2 form, and it’s uncluttered user interface makes it easy to find what you need.
The one group that may not like Credit Karma’s interface are active traders who may need to enter dozens or hundreds of short term trades by hand. Likewise, real estate investors with more than a few properties may want to opt for TurboTax or another software that allows users to import information from an accounting service.
Aside from those groups, most users should find Credit Karma Tax is easy to use. It has plenty of built-in information bubbles that guide users to enter the information in the appropriate screen. Credit Karma has also done a great job of “demystifying” some of the tax jargon, especially the jargon that surrounds self-employment. This is a huge win for people who earn just a few hundred dollars each year from self-employed side hustles.
If you struggle with the software service, Credit Karma has dedicated support staff to answer your questions. As always, it may be worthwhile to file earlier in the season since the days approaching mid-April tend to be very busy.
Credit Karma Tax Knowledge Articles
In addition to the information bubbles (which include “mini” knowledge articles), Credit Karma has a dedicated Tax support center. Most of the articles in this area explain the Credit Karma software product, but they also include articles that explain important topics like the information you need to file your Schedule C.
In terms of free tax software, you’re unlikely to find better information than that offered by Credit Karma.
Credit Karma Tax Pricing 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.
Who Should Use Credit Karma Tax In 2019?
Credit Karma Tax is free, and the software is reasonably easy to use.
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 2018). But other than the unsupported filers, active traders, and perhaps real estate investors, Credit Karma is a great option in 2019.
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
We look at Credit Karma Tax Software, which promises free tax filing. It has built out a ton of improvements this past year.