Credit Karma Tax Review

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For those who are looking for an easy way to file a state and federal tax return, Credit Karma Tax may offer a solution for you.

Credit Karma Tax offers the ability to file state and federal tax returns entirely online at no cost.

It is a free alternative to the more robust versions of TurboTax, H&R Block online and similar programs.

Overall Rating


Credit Karma Tax offers a free way to file federal and state tax returns online. The service can handle most common tax returns and even some forms that competitors charge a premium for.

  • Ease of use


  • Cost


  • Complicated returns



  • Easy to apply
  • Free to use
  • Encrypted data


  • Limited for complicated returns
  • Must file state and federal 
  • No live support

What is Credit Karma Tax?

Kredit Karma Tax

While there are many choices in tax preparation software, Credit Karma Tax may be worth examining. They recently updated their name to Cash App Taxes.

This is especially true for those cost-conscious people with simple tax situations who want to file and receive their tax refund fast.

Read on to learn more and determine if Credit Karma Tax is right for you. 

Credit Karma Tax is a free product from Credit Karma, the personal finance company that offers access to free credit reports. With Credit Karma Tax, you can go through the process of filling out your tax return and filing it for free. 

Credit Karma Tax allows you to create a login and password, enter some basic information, then walk you through a series of questions about your income and possible tax deductions

When you finish, you can e-file both your federal and state taxes at no charge. Unlike its competitors, there is no premium or paid versions of Credit Karma Tax. 

Who is Credit Karma for?

Credit Karma Tax could be a good solution for people with simple tax situations who don’t want to pay for services such as TurboTax.

It may be an option for young people who may not have complicated tax returns. 

Those with income from a job, as well as earnings from stocks, dividends, rental properties and self-employment can use Credit Karma Tax.

But know that some competing products may be more appropriate for complicated tax returns. 

Those who use Credit Karma Tax should be comfortable filing using an online platform, and with sacrificing some level of privacy in exchange for getting the product for free. 

Background on Credit Karma Tax

Credit Karma Tax is operated by Credit Karma, a personal finance website offering access to free credit reports from Equifax and Transunion, as well as credit scores. 

Credit Karma was founded in 2007 and unrolled its tax service in 2016. It reportedly processed millions of tax returns since inception.

Credit Karma has more than 100 million members, and its value has been pegged as high as $4 billion. 

How is Credit Karma Tax Free to Use?

Credit Karma

You may wonder how Credit Karma Tax can get away without charging customers for its service.

The answer is that, as a customer, you are paying indirectly—with your privacy. 

This is not to say that the company is trying to be sneaky. But it’s important to understand that Credit Karma Tax analyzes data from your tax information to send you targeted product recommendations.

Under this revenue model, if you purchase a product or service from one of the recommended companies, that company pays Credit Karma. 

The Credit Karma Tax service operates similarly to the main Credit Karma service, which analyzes information from your credit reports to send recommendations on loans and other products.  

As The Washington Post noted, “It’s a bold grab for personal data.”

Credit Karma Tax Process

Credit Karma Tax W2

Filing your taxes online isn’t as easy as buying a new set of headphones, but Credit Karma Tax tries to make it simple.

Rather than fill out a bunch of forms, Credit Karma does that behind the scenes based on your answers to a series of questions. 

To get started with Credit Karma Tax, all you need to do is click on the “File Your Taxes Now” link.

If you already have a Credit Karma account, you can get started right away. Otherwise, you’ll need to create a username and password. 

To create Credit Karma account, you’ll need to provide your name, address and the last four digits of your social security number.

Then you are asked a series of questions about items on your credit report to verify your identity. 

Once you are verified, you can begin preparing your taxes by asking a variety of questions about your income, investments, mortgages, charitable donations and anything that may help you receive a tax deduction. 

(Note: when I hopped onto the site, it did not actually allow me to enter any information because it was not tax filing season.)

Once you have completed your return, you can e-file for free through Credit Karma, or print out the tax forms and mail them. 

Credit Karma Tax guarantees that its calculations are correct.

If you are penalized by the IRS or your state tax authority due to a calculation error by the company, Credit Karma Tax will reimburse you for up to $1,000 in the form of a gift card. 

Reviews of Credit Karma Tax

Since Credit Karma Tax is a relatively new product, reviews from customers are somewhat limited.

However, users have had the chance to use the service for the last three tax reporting periods. 

Credit Karma Tax claims that its survey of users netted more than 764,000 reviews, with a cumulative rating for 4.5 stars out of 5.

Kiplinger magazine named Credit Karma the “best online tax prep” service in its 2017 “Best List.”

However, the New York Times’ Wirecutter website, which reviewed all major tax preparation programs, did not list it among its recommended products. 

On a lengthy Reddit thread, reviews were generally positive, but some users still found themselves going back to using competitors. 

“Overall, the process was straightforward and very easy, but it was not calculating a credit correctly for my situation so I went back to using HR Block online which is also completely free for my situation,” wrote one user identifying themselves as mb3581.

“I’ve already filed with [H&R Block] this year, but I may give Credit Karma Tax another shot next year.”

A Reddit user named Dr. Stan CPA, who identified himself as a CPA with a Ph.D., said he input two returns and found “major errors,” specifically with the way Credit Karma Tax calculated deductions for dependents.  

Positives and Negatives

Every tool has pros and cons. Here are some to consider.


Here are some of the pros.

It’s Free 

You obviously can’t beat the price.

If you truly do not want to pay a dime to file your taxes, it’s the cheapest option out there, aside from doing it the old fashioned way with paper and pen (and even then you’d have to pay postage).

It’s Simple

Credit Karma Tax allows you to file your taxes online without the need to print or fill out any tax forms.

If you have a simple tax return, you can probably file in an hour or so, and even complicated tax returns should take no more than a few hours, at most. 

Integration With Credit Karma

Like tens of millions of people, you may already have a Credit Karma account and receive credit reports and scores.

This means that there is no need to create a new login and password; your Credit Karma information works for Credit Karma Tax, also. 


Here are some of the cons to consider.


Giving up privacy is arguably the biggest drawback to using Credit Karma Tax.

The service uses the information you provide on your tax forms to target you with solicitations for other products.

For example, it may use your household income figure to target you with a personal loan offer. 

While Credit Karma does not necessarily hide this fact, it is not particularly upfront about it, either.

In its privacy policy, the company says, “The information we collect helps us tailor our content and improve our recommendations.

We’re constantly working on ways to better identify and present the information that’s most relevant to you.” 

This is a nice way of saying the company will send you offers and advertisements for things like loans and credit cards. 

No Live Support

Users of Credit Karma Tax may find customer support lacking.

While other tax preparation software, including TurboTax, offer access to live accountants to answer questions, there’s no such option for Credit Karma Tax users. 

Not Great for Complicated Returns

Those will simple taxes may find Credit Karma Tax to be more than adequate.

But if you are self-employed, work as a contractor, run a small business, or have complicated investment portfolios, you may find competitors to be more equipped to handle your taxes. 

Alternatives to Credit Karma Tax

There are many services offering tax preparation online. Most charge a fee, but many have a free federal option for those with the simplest tax returns.

If you want to test Credit Karma Tax, you can always try the completely free versions of the platforms below and compare results. 

Let’s examine some of the most popular competitors. 


TurboTax is the leader among tax preparation software. Owned by Intuit, it integrates well with other financial software, including Quickbooks and Mint.

It’s possible to file a basic federal return for free with TurboTax.

However, anything but the simplest returns will cost you at least $40 and as much as $90 for those who are self-employed. And filing state returns comes with additional cost. 

H&R Block 

The reputable tax preparer, H&R Block, has an online service that allows for a free federal return if you have a simple tax situation.

Otherwise, expect to pay between $29.99 and $84.99, plus an additional $36.99 to file a state return. 

Tax Act 

Tax Act offers a free federal return if you have simple taxes and services that range from $0 to $64.95, depending on your needs. Additional costs for state returns could add anywhere from $4.95 to $44.95.  


TaxSlayer is a Georgia-based company offering an online tax preparation solution similar to TurboTax and H&R Block.

It is considered a more budget-friendly version, with paid options that range from $17 to $47.

There is also a free version that includes a state return, marketed to people with very simple returns and college students. 

IRS Free File

The Internal Revenue Service allows you to e-file your taxes for free if you meet specific income requirements.

The IRS says this could apply to as much as 70% of the population. But doing this usually involves partnering with one of the tax solutions above. 

Moreover, state returns would be additional and must be filed with your state. Alternatively, it’s possible to fill out your tax forms using the IRS’ fillable online forms, then mailing them in. 

Hire an Accountant

If you are not comfortable filing taxes online, or if you have what you believe to be a complicated return, it may be worth hiring a professional to do your taxes for you. 

An accountant won’t come free, but you’ll get a professional set of eyes working on filing your taxes correctly and on time, and get you the maximum refund. 

To read more about these options and others, read our article, “The Best Ways to File Your Taxes Online.”


Credit Karma Tax also know as Cash App Taxes is a free way to file federal and state tax returns online.

The service can handle most common tax returns and even some forms that competitors charge a premium for. 

Most people should have no problem filing taxes this way. What ever your tax situation is, sites like Credit Karma Tax can save you money.

It’s also important to remember that nothing is truly free, as Credit Karma Tax collects users’ data and generates revenue through targeted marketing and offers to users.

Not all customers will be comfortable giving up this level of privacy. 

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