Best Free Income Tax Filing Software and Service

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Introduction

I tested several scenarios including the more common filing status, exemptions, income, adjustments, credits, other taxes, payments, etc.  All are feature limited versions of commercial programs so expect to be nagged. 

State income tax returns are not free unless otherwise mentioned in the product comments.  However several states have websites where the taxpayer might be able to use the information from the federal return to complete their state return.  Also see the IRS VITA and TCE link immediately below.

The IRS Free File site also lists many options for filing Federal Income tax returns.   Beware, some of the programs listed there don't nag and therefore don't necessarily warn that the taxpayer no longer qualifies for a free return.

I don't have experience with tax preparation for other countries but encourage you to share your suggestions so I can include the links in the Related Products Section.


If you feel overwhelmed please contact the IRS VITA and TCE which provide free federal and state tax return preparation by volunteers.  The volunteers can prepare many returns but some situations are out of scope for them, e.g. seperate returns in a community property state or Schedule C with inventory.     

 
Discussion

TaxACT offers two versions. TaxACT Free Edition is the only free tax preparation program for download. TaxACT Free Edition Online is the online version of the same program.  Both versions are virtually identical except that the download version is limited to only one return and the online version lacked the form view section at the bottom of each page.

TaxACT is the easiest of the rated programs to navigate.  Also every form calculation tested was directly supported.

I found the step-by-step interview process to be straightforward. I liked the help screen display on the right.  I could easily add a mini-schedule to any numeric field which would be very helpful in recording the details of an entry for later recall. 

I could easily choose between step-by-step guidance and quick entry.  The quick entry popped up a form similar to the actual IRS form.  This would be very helpful for anyone who wants to save time and is already familiar with the specific section.

I could bookmark sections I wanted to revisit.  Navigating back and forth is easily accomplished by either selecting jump to topic; selecting the tab, sub-tab, and review for the appropriate section; or by directly selecting the forms in the forms view. 

The form view section at the bottom of each page of the download version was very helpful.  I could make entries directly in the form.  However this would not bypass any of the step-by-step interview like the quick entry selection would.

State returns are not free.

 TaxHawk and  FreeTaxUSA are identical except for the name and styling differences.  Indeed an account in one carries over to the other.  Uses a mixture of interview and form entry process.  I liked the ability to bookmark sections. 

Filers should be happy with either of these if they don't have any of the situations mentioned in the cons or aren't bothered by the calculations required for theses situations.

Navigating was accomplished by tabs at the top but was limited to entire sections of the return, e.g. the entire Itemized Deductions Schedule A section.  No form navigation provided.

If you have a 1099R with taxable unknown and employee contributions then you must calculate the simplified method yourself.  They do refer user to appropriate IRS publication.

Doesn't calculate estimated state sales tax for Schedule A but does ask questions to determine if some was taxable and does provide a pdf worksheet to calculate the taxable part.  Doesn't calculate estimated state sales tax for Schedule A but does refer user to IRS calculator.  Does not calculate medical mileage amount but does indicate how to calculate this yourself. 

State returns are free if adjusted gross income is less than $20,000.

 
Related Products and Links
USA:
Canada:
California State Taxes:
Colorado State Taxes:
Connecticut State Taxes:
Delaware State Taxes:
New York State Taxes:
Malaysia:
Singapore:
India
 
Quick Selection Guide

TaxACT Free Edition

5
 
Gizmo's Freeware award as the best product in its class!

Runs as a stand-alone program on a user's computer
Downloaded program. Fast and easy to use. Can add mini-schedules to most fields. College Student Financial aid worksheet. Can file most Federal forms and schedules.
No provision to apply portion of refund against next years taxes. Limited to one return. State returns are not free.
2014
21.1 MB
32 bit but 64 bit compatible
Feature limited freeware
There is no portable version of this product available.
Nearly identical to on-line TAXACT version. Included a form view at bottom of every page which on-line version lacked.

TaxACT Free Edition Online

5
 
Gizmo's Freeware award as the best product in its class!

Is a web service or web application
Fast and easy to use. Can add mini-schedules to most fields. College Student Financial aid worksheet. Can file most Federal forms and schedules.
No provision to apply portion of refund against next years taxes. State returns are not free.
2014
Feature limited freeware
Nearly identical to downloaded TAXACT version. On-line version lacks form view at bottom of every page.

TaxHawk

5
 
Is a web service or web application
Bookmark feature. Mixture of interview and form input. Many of the screens mimic the forms. The program is noticeably quicker than others, e.g. less of a delay between completing one screen before the next appears.
Doesn't calculate simplified method for employee pension contributions (does refer user to appropriate IRS publication). Doesn't calculate medical mileage amount (did provide instructions to calculate these). Doesn't calculate whether state tax refund is completely taxable (does ask questions to determine if some was taxable and does provide a pdf worksheet to calculate the taxable part). Doesn't calculate estimated state sales tax for Schedule A (does refer user to IRS calculator).
2014
Feature limited freeware
Identical to FreeTaxUSA.

FreeTaxUSA® IRS Free File Edition

5
 
Is a web service or web application
Bookmark feature. Mixture of interview and form input. Many of the screens mimic the forms. The program is noticeably quicker than others, e.g. less of a delay between completing one screen before the next appears.
Doesn't calculate simplified method for employee pension contributions (does refer user to appropriate IRS publication). Doesn't calculate medical mileage amount (did provide instructions to calculate these). Doesn't calculate whether state tax refund is completely taxable (does ask questions to determine if some was taxable and does provide a pdf worksheet to calculate the taxable part). Doesn't calculate estimated state sales tax for Schedule A (does refer user to IRS calculator).
2014
Feature limited freeware
Identical to TaxHawk which owns both sites

IRS Free File Fillable Forms

1
 
Is a web service or web application
If you normally file your own taxes on paper but want to efile then this program is worth a try. Totally free, i.e. no limitations on use. No nags.
Online versions of paper forms designed for people comfortable preparing and calculating their own tax returns. No interview process. No help screens (links are provided to download the appropriate IRS Instruction PDF). Many calculations must be done manually and the taxpayer must remember to click on "Do the Math" for those which the program will calculate. Federal only, no state returns.
2014
Unrestricted freeware
No state returns. This application is included only because it is truly freeware. However, this program is not for folks even slightly intimidated by manually calculating their taxes.
 
Editor

This category is maintained by volunteer editor okrick. Registered members can contact the editor with any comments or suggestions they might have by clicking here.

 
Tags

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Comments

State returns with TaxHawk are NOT free, regardless of income.

Reviewed their web site. Corrected my comments. Have no idea where I got this from--probably wording changed since I first looked. Thanks for pointing this out. Rick

TaxAct is not really free. By this I mean that it even states before you get started that you can only get the max refund by using the paid Deluxe version.

Also, its import of a previous year's tax PDF file does not work.

"TaxACT Free Edition and Deluxe include a maximum refund pledge for accepted Federal IRS E-file returns" per https://www.taxact.com/taxes-online/. I doubt that the IRS would sanction a tax preparer which offers variable tax calculations (i.e. refunds) depending on the fee paid. I suspect doing so violates Federal law. If it works a pdf import saves no more than 15 minutes of entries. I wouldn't have commented but I had the delusion that the folks at TaxAct might read my comments and do something about it:) I'll remove the comments. Rick

If you need to file a state tax e.g., New York, TaxAct's "free" suddenly jumps to $18 because you need the "Ultimate" bundle, fees, addons, yadda yadda.

I did comment that state returns were not free. These programs are feature limited versions of commercial products and one of the features they charge for is state returns. This also the reason they all nag. The sole exception is the IRS site which lacks state returns. A couple of the other programs do have free state returns if certain criteria are met. An alternative if the state has a free filing website would be file the free federal return then use the federal numbers to complete the state return. This would work best if the state return is somewhat based on the Federal such as California which takes the Federal and adds or subtracts the exceptions. The state site should be able to handle most issues where the state and Federal returns differ. For more complex situations I recommend an appointment with the Vita or AARP volunteer tax preparation services mentioned in the article. Rick