Cheapest Tax Software for 2022

Filing your taxes each year is never a fun task. To make things a little easier, a number of online tax preparation services have popped up on the market in recent years. Many of these providers charge fees for their services, but others allow you to file your taxes for free.

Since nobody is thrilled at the idea of spending money to pay their taxes, you are probably wondering which one of these services offers the cheapest tax software.

The first thing to remember is that the amount you pay (or don’t pay) depends on your tax situation and the type of service you’re comfortable using.

In many cases, if you have a simple tax situation, it’s possible to file your federal and state returns for free. At the same time, many services only offer free federal tax filing and charge you to file state taxes.

Make sure you take a close look for any hidden or unexpected fees, as some tax filing software will market their product as free, but then once you’re already filling out your taxes, they will add on fees for extra features and filing options. TurboTax actually got sued by the FTC for deceptive marketing practices in 2022, but we’ve still included them in our list because they do offer a cheap filing option.

Cheapest Tax Software for 2022

  1. TaxSlayer
  2. TurboTax
  3. FreeTaxUSA
  4. TaxAct
  5. H&R Block
  6. eSmart
  7. Liberty Tax

Free Federal and State Tax Filing

This batch of tax preparation services includes a few companies that offer free federal and state returns for simple tax situations. They also offer more complex plans for those that need them, which you’ll have to pay for:

1. TaxSlayer

TaxSlayer is one of only three tax preparation services I have found that offers free federal and state returns. That said, if you have a simple tax situation, you probably want to check out TaxSlayer’s Simply Free plan, which costs nothing for federal and state taxes. Yipee!

TaxSlayer also covers more complex tax situations and usually at lower prices than the competition. If you want to take advantage of deductions or have dependents, you will probably want to upgrade to TaxSlayer’s Classic plan. This option costs $17 for federal returns and $29 for state returns.

TaxSlayer’s Premium Plan costs $37 for federal returns and $29 for state returns. This plan includes the benefit of one-on-one customer support over the phone, live chat, or through email.

TaxSlayers Self-Employment plan offers the most competitive price that I’ve seen for self-employed individuals. This plan costs $47 for federal returns and $29 for state returns. It’s not uncommon to see comparable services cost upwards of $100 or even more.

Learn More: Read our full TaxSlayer Review.

2. TurboTax

TurboTax is next in line when it comes to free federal and state filing. It’s worth noting that their services can get expensive for more complex tax situations. But as the saying goes, you get what you pay for, and TurboTax is a brand name that has very solid technology and offerings.

The TurboTax Free Edition allows you to file your federal and state taxes for free. The catch? Only very simple tax situations are covered. For example, if you own a home, have kids, or have investments, you probably won’t qualify for TurboTax free program.

If you want to itemize deductions or if you’re a homeowner, you may want to upgrade to the TurboTax Deluxe Online Edition. This plan costs $40 for federal taxes and $40 for state taxes.

For more complex tax situations, such as those that include investment income, rental properties, and cryptocurrency transactions, you’ll need to upgrade to TurboTax’s Premier Online Edition. This plan costs $70 for federal taxes and $40 for state taxes.

Learn More: Read our full TurboTax Review.

note: the prices above reflect discounts applied when you signup through millennialmoney.com ($20 off federal, $5 off state)

Free Federal Tax Filing and Additional Charges for State Taxes

Next, let’s take a look at several providers that offer free federal tax filing plans but charge for filing state taxes.

These providers also offer more expensive plans than might be necessary depending on your tax situation.

3. FreeTaxUSA

FreeTaxUSA offers 100% free federal taxes and charges just $12.95 for state taxes. As you will see, $12.95 is significantly lower than what most other competitors are charging for state returns. So, while you may have to reach into your wallet a bit, the hit isn’t as bad as it might be elsewhere.

What’s more,  customers can upgrade to FreeTaxUSA’s Deluxe Plan for a mere $6.99, which is also much lower than comparable plans from competitors.

While FreeTaxUSA isn’t 100% free (despite what their company is called!), they do offer very competitive pricing and account for more complex tax situations compared to the free offering served up by TurboTax.

Learn More: Read our full FreeTaxUSA Review.

4. TaxAct

TaxAct’s Online Free Edition is free for federal taxes but costs $19.95 for state taxes. Under this low-cost plan, only simple tax situations are covered.

If you want to deduct childcare expenses or mortgage interest, for example, you’ll have to upgrade to a more expensive plan such as their Online Deluxe+ Edition, which costs $23.96 for federal taxes and $31.96 for state taxes.

Finally, if you need to file paperwork related to stock investments or rental properties, you’ll need to upgrade to the Tax Act Online Premier+ Edition. This plan costs $31.96 for federal taxes and $31.96 for state taxes.

Learn More: Read our full TaxAct Review.

note: the prices above reflect discounts applied when you signup through millennialmoney.com (nearly 55% off in some cases)

5. H&R Block

H&R Block’s cheapest tax service is the Free Online Tax Filing plan. It’s free for both federal and state taxes. Similar to other providers, H&R Block’s lowest-cost plan only accounts for the most simple tax situations.

If you want to account for charitable contributions and have better customer support, you’ll have to jump up to the Deluxe Online Filing Plan: $37.49 for federal taxes and $36.99 for state taxes.

If you have to declare investment or rental property income, you may want to select H&R Block’s Premium Online Tax Filing plan, which costs $37.49 for federal taxes and $36.99 for state taxes.

Learn More: Read our full H&R Block Review.

note: the prices above reflect discounts applied when you signup through millennialmoney.com

6. eSmart Tax

eSmart Tax is a newer online tax service backed by Liberty Tax. Their cheapest option is the Free Edition, which is designed for simple tax situations. It’s free for federal taxes but costs $29.95 for state taxes.

If you have a family and want to itemize deductions, you’ll have to upgrade to eSmartTax’s Basic Edition, which costs $44.95 for federal returns and $39.95 for state returns.

If you’re an investor or would like to get one-on-one advice from an advisor, you’ll want to opt for the Deluxe Edition. This plan costs $44.95 for federal returns and $39.95 for state returns.

Last but not least, if you’ve sold a property, own a small business, or own a rental property, you’ll have to opt for eSmartTax’s Premium Edition. This plan costs $44.95 for federal returns and $36.95 for state returns.

Learn More: Read our full eSmart Tax Review.

note: the prices above reflect discounts applied when you signup through millennialmoney.com (a savings of 50% on its highest packages)

Paid Plans for More Complex Tax Situations

The only company in this post today that doesn’t offer free federal tax filing is Liberty Tax. That’s not to say that their services should be overlooked.

Again, it really depends on your tax situation and how much customer support you think you might need.

7. Liberty Tax

Liberty Tax does not offer a free edition. Bummer! Overall, it seems that their plans are more expensive but are also geared toward more complex tax situations.

The cheapest plan that Liberty Tax offers is the Online Simple Edition, which costs $27.96 for federal returns and $29.95 for state returns. If you have a simple tax situation and are looking for a free plan with some of the same features that Liberty Tax offers, take a look at their subsidiary eSmartTax (mentioned above).

If you want to itemize deductions with Liberty Tax or if you want to file a Schedule C form, you’ll have to upgrade to their Online Deluxe Edition. This plan costs $51.96 for federal returns and $39.95 for state returns.

Next, if you’re a small business owner or need to declare rental property income, you may want to sign up for the Liberty Tax Premium Online Edition, $71.96.

Learn More: Read our full Liberty Tax Review.

note: the prices above reflect 20% off discounts applied when you signup through millennialmoney.com

Which Is The Cheapest Tax Software?

If you’re looking for a free federal and state return option but also want the ability to upgrade your account or speak with an advisor (if the situation calls for it), you might want to look into services like TaxSlayer and TurboTax.

The tax preparation companies that don’t charge for federal taxes but charge money for state taxes are FreeTaxUSA, TaxAct, H&R Block, and eSmartTax.

Last but not least, Liberty Tax does not offer a free federal filing plan but they do accommodate more complex tax situations. They also have brick-and-mortar locations (as does H&R Block), if you’d like to meet with a real live person.

At the end of the day, the best tax software service for you is the one that meets your needs and that you are comfortable working with. I’d never recommended cutting corners when it comes to filing your taxes. But it’s never a bad thing to save money.

I hope this post has helped clarify the growing market of online tax software providers. Do your due diligence and research your options, and you shouldn’t have a hard time picking the service that works best for you.

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  • Comment Author image blank
    Renee
    I have always filed with TaxAct, because that is what my parents used, and the site I learned how to do my taxes online through (when I stopped filing paper returns.) I figured, I was used to it, it made sense, and, as tax laws changed, they were great about breaking it all down and making it legible. However, the additions of a 401(k) and negligible stock grants through my employer have made it stupid expensive. I had to "upgrade" last year (and probably the year before, but didn't notice because it probably wasn't as expensive) because of that one addition to my preparation. I didn't sell any stocks. I didn't take any money out of my retirement plan. That one, little additional form shot my free federal and $20 state filing total up to $182 and some change when all was said and done. As a single person who really looks forward to that extra bump of cash early in the year, that is a lot of money. I'm going to try TaxSlayer this year, and I have a feeling I won't miss TaxAct in the least. (Btw, TaxAct also relentlessly tries to push their unnecessary products on you as you're checking out. Buyer beware.)