FreeTaxUSA offers online tax preparation and free federal tax filing. To date, the company has processed over 43 million tax returns.
As the name suggests, federal e-filing is 100% free—just like many other online tax preparation services. FreeTaxUSA also offers additional services that can be purchased.
Are you considering using FreeTaxUSA for next year’s tax return? This post is going to give you a full rundown of everything that FreeTaxUSA has to offer so you can decide if it’s right for you.
What is FreeTaxUSA?
First, let’s cover the basics. FreeTaxUSA is a rapidly growing online tax filing service that provides online tax preparation support. It won’t cost you a penny to file your federal taxes electronically with the service, but you will have to pay $14.99 to file state returns.
FreeTaxUSA was founded in 2001 and is owned and operated by TaxHawk, Inc. The company is 100% American-based and employs over 150 people.
What’s more, FreeTaxUSA is an original member of the IRS Free File Alliance. This means that they were one of the first companies to partner with the IRS to provide free federal return filing directly to consumers.
Next, let’s review the various services that FreeTaxUSA provides.
Free Federal Tax Filing
FreeTaxUSA’s most popular offering is free federal e-filing directly with the IRS. Simply click the Start Free Return button to begin the process.
FreeTaxUSA boasts that they offer simple, basic, and advanced methods of tax preparation. The company says that some of its competitors charge upwards of $100 for comparable services.
With that said, FreeTaxUSA’s free federal preparation service accommodates a wide variety of special circumstances, including homeownership, HSA contributions, earned income credit, investments, small business income, and K-1 income. Unless your taxes are incredibly complicated, you should be able to find what you need with FreeTaxUSA.
Deluxe Tax Return
Customers who are looking for added peace of mind might opt for FreeTaxUSA’s Deluxe Filing Service, which costs $6.99.
Under this plan, you’ll get the added benefits of priority customer support, the ability to amend your returns, and audit support. If your taxes are complicated, it might be worth ponying up some pocket change to take advantage of the extra support.
FreeTaxUSA offers a free tax extension service in the event that you won’t be able to file your taxes by the April 15 deadline. With this service, you can quickly and easily file an extension—giving you until Oct. 15 to complete your return.
Small business owners will undoubtedly appreciate FreeTaxUSA’s self-employed tax filing option, which is also free for federal returns.
This service offers special deductions that apply to many small businesses and self-employed entrepreneurs, including deductions for health insurance costs, vehicle expenses, home office expenses, business equipment costs, travel expenses, asset depreciation, and more.
There are also special sections to declare income from rental properties and self-employment.
Military Tax Preparation
FreeTaxUSA offers Military Tax Preparation that is designed exclusively for service members.
This plan conveniently offers many of the specific forms and deductions that only apply to members of the military and veterans, including combat pay deductions, uniform deductions, moving expense deductions, reservists’ travel deductions, deductions for job search expenses, and earned income tax credits (EITC) for non-combat pay.
FreeTaxUSA’s State Tax Return feature offers a convenient way for you to file your state taxes.
Their website boasts that they offer the lowest price on the market for state preparation and filing, which is $14.99. There’s one downside here worth pointing out.
Currently, FreeTaxUSA only offers state tax support in 42 states. To find out whether you’re eligible, check out the list of the state tax forms that FreeTaxUSA supports.
- District of Columbia
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
1099 Tax Filing
FreeTaxUSA’s 1099 Tax Filing service provides free federal tax filing for a wide variety of 1099 forms. Here’s the list of the most commonly used 1099 forms.
(Note: I have also included the official IRS links for each form in case you would like to learn more about them.)
Pros of FreeTaxUSA
No Hidden Fees
Unlike most of its competitors, FreeTaxUSA has very straightforward pricing. Their fees are as follows:
- Standard Federal E-File (good for most situations) = FREE
- Deluxe Filing Service = $6.99 one-time fee
- State Filing Service = $14.99 one-time fee
That’s it! It’s that simple.
Most federal returns can be filed for free. If you want to file your state taxes via the platform, you’ll have to shell out $14.99. Even if you opt for FreeTaxUSA’s Deluxe package and state filing service, the most you’ll pay is $21.98.
When you compare that figure against traditional tax preparation costs which often hover in the hundreds of dollars range, it looks like a great deal.
Further, FreeTaxUSA allows you to file many forms—such as self-employment tax-related forms and investment-income-related forms, for example—that services like TurboTax charge a premium for.
Easy to Use
FreeTaxUSA’s online tax platform is straightforward and easy to figure out. And I’ll mention again that I really like their pricing transparency.
The last thing you want to do is spend hours starting your return thinking it’ll be free to file at the end but then find out that you need to pay for an expensive upcharge to complete the process (which happens often with TurboTax).
Wide Range of Tax Situations Covered
FreeTaxUSA covers most tax situations. Whether you’re self-employed, have retirement or investment income, or if you’re in the military, you’ll most likely find everything you need on FreeTaxUSA’s platform.
Cons of FreeTaxUSA
No Phone Support
If you’re the type of person who prefers speaking to a live person to troubleshoot issues, FreeTaxUSA is not for you.
The company doesn’t have any call center to speak of. That said, there is a live chat support option for deluxe customers.
No Mobile Apps
FreeTaxUSA does not offer a mobile app for uploading your tax documents. So if you want to file your taxes on the go, you might run into some issues.
Limited Importing Capability
FreeTaxUSA has limited file and document importing capabilities. Sure, you’ll be able to import your prior year’s tax return (if the file is in PDF format, that is).
But if you would like to import files from Quickbooks or your financial statements, for example, you’re out of luck.
FreeTaxUSA doesn’t support the following forms:
- Form 2555: for foreign employment income
- Form 1040NR: non-resident alien return
- Form 6198: for at-risk limitations
- Form 6252: for installment sales
- Form 8615: tax for children with more than $2,100 in investment income
- Form 8801: prior year minimum tax credit
- Form 8853: for Archer MSAs
FreeTaxUSA is also not able to help if you:
- Reside outside of the U.S. when filing your return
- Have experienced a casualty or theft gain or loss
- Have to pay additional tax on excess contributions to IRAs
- Have donated over $5,000 worth of collectibles, equipment, or real estate to charity
However, for most run-of-the-mill taxpayers, FreeTaxUSA offers everything needed to pay both state and federal taxes promptly, easily, and affordably.
Is FreeTaxUSA legitimate?
Yes. FreeTaxUSA is a legitimate online tax preparation service. As I mentioned above, the company has been around since 2001 and employs over 150 people. A track record of nearly 20 years is nothing to scoff at.
Who owns FreeTaxUSA?
FreeTaxUSA is owned and operated by TaxHawk, Inc, which is a professional tax services company based in the United States.
Which is better FreeTaxUSA vs TurboTax?
This is not an easy question to answer. It really depends on your tax situation.
In most situations, FreeTaxUSA is going to be cheaper than TurboTax because there are fewer upsells and hidden fees. So, if your tax situation is relatively straightforward, FreeTaxUSA is generally a better option because you’ll save money.
On the other hand, FreeTaxUSA charges $14.99 for state returns, while TurboTax claims to offer simple state returns for free.
If you’re looking for more advanced features from your online tax software, such as Quickbooks integration or a mobile app you can use to complete your return on-the-go, TurboTax is likely your better option.
It’s also worth noting that TurboTax is owned by Intuit—which employs over 9,000 people worldwide—so it’s not surprising that the product ships with more advanced features and delivers stronger user experiences thanks to the robust underlying technology.
How much does it cost to file with FreeTaxUSA?
Federal e-filing is 100% free. At the time of this writing, state returns cost $14.99. If you’d like to opt for additional services such as better customer support and audit support, their deluxe service costs only $6.99. Compared to the prices professional tax preparers charge, that’s a steal.
Is FreeTaxUSA easy to use?
Yes. FreeTaxUSA is easy to use. If you ever have any issues, free account holders can contact customer support through email and using web support form. Deluxe account holders have access to live chat support in addition to email and web support.
If you’re the kind of person who prefers chatting with customer success agents when you’re struggling with something, it may be worth signing up for a premium account.
Is FreeTaxUSA Good Tax Software?
If you’re looking to file your own taxes and save as much money as possible when doing so, FreeTaxUSA is a great option to consider. You’ll find an easy-to-use online platform packed with features that accommodate most tax situations.
On the other hand, if you’d like to speak with someone on the phone or would like the widest array of online tax services on the market, FreeTaxUSA might not be the best choice.
As Benjamin Franklin famously said, the two things you can’t avoid in life are death and taxes. Thanks to FreeTaxUSA, at least you can avoid paying tax filing fees—most of the time.