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.  The recommended programs covered far more situations than those listed at IRS Free File.  All are feature limited versions of commercial programs so expect to be nagged. 

State income tax returns may or may not be free depending on several factors such as your state, income, etc.  In that situation check the IRS Free File for possible alternatives. Also a taxpayer may be able to complete their state return for free using the information from the federal return.  Finally 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 listed services 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 I included the links provided by commenters 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.     

 
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

TaxHawk and FreeTaxUSA® IRS Free File Edition

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

Is a web service or web application
2015
Feature limited freeware

TaxHawk and FreeTaxUSA are identical except for the name and styling differences. 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.

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.

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.

TaxHawk owns both sites.

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 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 but clicking the "?" does provide a link to the IRS Sales Tax Deduction Calculator.

TaxACT Free Edition

4
 
Runs as a stand-alone program on a user's computer
2015
26.3 MB
32 bit but 64 bit compatible
Feature limited freeware
There is no portable version of this product available.

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.

College Student Financial aid worksheet.


Small business, capital gains, rents, or farm income not included in free version.

No provision to apply portion of refund against next years taxes.

State returns are not free.

Windows

TaxACT Free Edition Online

4
 
Is a web service or web application
2015
Feature limited freeware

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.

College Student Financial aid worksheet.


Small business, capital gains, rents, or farm income not included in free version.

No provision to apply portion of refund against next years taxes.

State returns are not free.

 
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.

 
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Comments

The above generalizations about state tax returns not being free are incorrect.

It can depend on what state or states you are filing in, your Adjusted Gross Income from your federal filing, your age, if you qualify for the federal Earned Income Credit, and more.

I'm a Michigan resident and with my status I can file a free state return with TurboTax, TaxAct, Jackson Hewitt, and a number of other IRS approved on line tax preparation web sites.

If you want to file a state return for free, check the IRS Free File info and look at the various options. Keep in mind that in some cases the IRS info may not be fully accurate and you may need to go to the individual free tax providers web page to see what they offer for your specific situation. It took me less than 15 minutes to find a half dozen options that worked for me.

Thank you for discovering this. I'll modify my comments accordingly.

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