Can you really file your taxes for free? It’s possible to file any federal tax return for free. Learn how with our FreeTaxUSA Review.
Note that you will need to pay to file your state tax return. The good news is that FreeTaxUSA charges a state filing fee that’s half the cost of most competitors.
If you’re like me, you’re probably curious as to why FreeTaxUSA is a fraction of the cost of you usually pay to file your taxes online.
After all, all tax prep software is going to calculate the same results.
This review will help you decide if FreeTaxUSA is the best way to file your taxes this year.
All federal tax returns cost $0, and state tax returns cost $14.99 with FreeTaxUSA. This option is one of your most affordable if you’re comfortable preparing your own taxes. However, there isn’t an option for one-on-one tax advice.
Ease of use
- Free Fed tax returns
- Easy to use
- No personal tax advice
- Customer service
In This Article
- What is FreeTaxUSA?
- Receiving Your Tax Refund
- Customer Support
- Is FreeTaxUSA Easy to Use?
- Does TaxFreeUSA Have a Mobile App?
- Is FreeTaxUSA Safe?
- Is FreeTaxUSA Legit?
- Who Should Use FreeTaxUSA?
- Positives and Negatives
What is FreeTaxUSA?
FreeTaxUSA has been offering online tax filing since 2001. In fact, FreeTaxUSA is one of the first IRS Free File Alliance members.
Since launching, FreeTaxUSA states it’s filed over 43 million federal tax returns.
Back when relatively few people had home internet access, it was more difficult to file your taxes for free. But today online tax filing is both secure and accurate.
Before FreeTaxUSA begins preparing returns for the current tax year, its software undergoes rigorous testing to look for flaws.
The competition performs the same screening process.
From the start, FreeTaxUSA’s mission was budget-friendly pricing with no hidden fees.
FreeTaxUSA is 100% free for all federal tax returns. However, you must pay up to $12.95 for each state return.
Advanced support features like priority customer support and audit assistance come in the “Deluxe Edition” that costs $6.99.
While FreeTaxUSA isn’t as well-known as its pricier competitors with huge advertising budgets, you can get similar results at a sharply lower cost.
FreeTaxUSA can even be free for these advanced tax situations:
- Earning self-employment income
- Selling stock investments in a taxable account
- Earning rental property income
- Filing an itemized return
It’s also possible to file business taxes that report on a Schedule K-1.
Non-Supported Tax Items
Certain complex tax situations are not compatible with FreeTaxUSA.
Some non-qualifying tax situations include:
- Foreign employment income (Form 2555)
- Customers living outside the United States when they file their return
- Archer Medical Savings Account MSAs (Form 8853)
- Donations of tangible items exceeding $5,000
- TaxFreeUSA supports publicly-traded security donations above $5,000
As mentioned earlier there are two different editions of FreeTaxUSA — Free and Deluxe.
All filers pay the same fee amount no matter how complex their federal tax return is.
You will need to decide if you want to stick with the free version or upgrade to the Deluxe edition. The Deluxe plan has a one-time $6.99 fee.
Paying with your tax refund balance costs an additional $19.99. So it’s best to pay your fees with a credit card or debit card upfront.
FreeTaxUSA charges the same price for all tax returns:
- Federal: $0
- State: $12.95 per state
Note: Filing your state return late may result in higher fees for some services.
If your state has no state income tax, you can very likely pay $0 to file your taxes. Assuming you have a simple tax return, other software like TurboTax waive the state filing fee.
FreeTaxUSA is one of the most affordable options in these situations:
- If you can itemize
- You sold investments
- If you earned self-employment or freelance income
- You own a rental property
For example, a self-employed person can pay as much as $130 to file their federal and state return using TurboTax. Or they can pay $12.95 with FreeTaxUSA.
Advanced Tax Deductions and Credits
The free version offers advanced tax deductions and credits that other software may require you to upgrade to claim.
Two examples include home mortgage interest and health savings account deductions.
Free Import of Last Year’s Return
You can import last year’s return for free from TurboTax, H&R Block and TaxAct. All other tax documents will need to be manually entered.
The lack of auto-import tools is a nuisance, but it’s a tradeoff for cheap tax software.
Downsides to the free plan include a lack of live technical support and IRS audit assistance. You will need to upgrade to the deluxe to access these amenities.
Neither the free nor deluxe plan offers one-on-one tax guidance. FreeTaxUSA does provide answers to common tax questions that are accessible online 24/7.
As mentioned earlier, for $6.99 you can upgrade to the FreeTaxUSA Deluxe Edition.
Premium benefits include:
- Priority support with live chat
- Unlimited tax return amendments (i.e., Form 1040-X)
- IRS audit assistance
Let’s take an in-depth look at these three perks and decide if it’s worth the $6.99 upgrade.
Live Chat Support
Free members can only send an email or an online message if they have trouble preparing their return.
You may need to wait several hours–or even the next day–to finish your return.
Premium members get live chat technical support Monday through Saturday, 8 am to 12 am Eastern Standard Time.
You can resolve any technical errors in real-time to complete your return in one session.
Once again, live chat is only for technical support and not tax advice.
Unlimited Tax Amendments
If you forget to report a tax form or mistype a number, you will need to file an amended tax return with accurate results.
On the federal level, this is Form 1040-X. All legit tax software lets you file amended returns for an additional fee.
FreeTaxUSA charges $12.95 for unlimited returns if you file under the free edition. With the Deluxe version you don’t pay for amended returns.
Most people may never file an amended return in their life. But perhaps you might need to.
For example, maybe you didn’t know your college side hustle is taxable income.
Or maybe you forgot about some side hustle work you did early in the year.
If your tax return is subject to an IRS audit, FreeTaxUSA provides complimentary assistance.
However, this doesn’t mean in-person representation with the IRS agent.
Instead, FreeTaxUSA will guide you through the audit prep process. You will have the necessary information to answer the auditor’s questions.
These benefits do not appear to extend to a state tax return audit.
As you complete your return, FreeTaxUSA’s software looks for audit red flags. For example, maybe you forgot to include all the boxes from a form 1099.
Or you accidentally claim an irrelevant tax deduction.
Fixing these errors won’t prevent a tax audit. But the verification is part of TaxFreeUSA’s 100% accuracy guarantee.
It’s free to file a federal tax extension with FreeTaxUSA. You have an additional six months to file your federal return.
This feature is handy if you don’t have all of your necessary tax documents yet.
If you owe the IRS money this year, those taxes are still due on the federal tax deadline. It’s April 15, 2021, for your 2020 tax year return.
After the federal tax deadline passes, any unpaid balance is subject to interest and penalties.
Prior Year Tax Returns
If you haven’t filed the tax return for a previous year (and need to), TaxFreeUSA can be your cheapest option. Your federal return costs $0, and each state return costs $12.95.
As of February 2021, you can file prior year returns for tax years 2013 through 2019. You’re responsible for unpaid taxes at the federal and state level.
The IRS only issued tax refunds within three years of the original tax deadline. This three-year limit also applies to amended returns using tax form 1040-X.
For the 2021 tax filing season, you can receive a prior-year refund for your 2018, 2019, or 2020 returns.
Printed Tax Returns
All users receive a printable PDF copy of your federal and state tax returns. FreeTaxUSA can mail you a printed copy in these instances:
- Mailed printed return: $6.99
- Professionally bound tax return: $12.99
This optional fee is one of the few you might pay with FreeTaxUSA. Note that these fee amounts may change over time.
Receiving Your Tax Refund
If you get a tax refund this year, congrats. FreeTaxUSA lets you receive your refund via direct deposit into a checking account or savings account.
Most federal refunds process within 21 days of the IRS accepting your e-file return.
You can also request the IRS to mail a check. However, it can take up to one month to receive your refund.
Either option is free when you pay your FreeTaxUSA fees upfront with a credit or debit card.
Otherwise, you will pay an extra $19.99 if you have FreeTaxUSA withhold your tax prep fees from your refund.
One downside of using cheap tax software is the lack of in-depth customer service.
To be more specific, TaxFreeUSA doesn’t offer one-on-one tax advice from an Enrolled Agent (EA) or a Certified Public Accountant (CPA).
This expert access can cost an extra $80 with other online tax software. The few platforms offering personal tax advice have different prices and service levels.
You most likely won’t need personal advice if you have a simple return, such as W-2 earning and bank account interest only.
Most seasoned tax filers familiar with the tax code can probably file without hands-on help.
Paying for a second opinion might be worth it if you have a complicated return. For instance, you have a multi-state return or are self-employed.
Online Questions and Answers
To be fair, FreeTaxUSA has a rather in-depth digital tax topic library. You can enter questions and topics into a search box and see relevant articles.
Even advanced topics like the “safe harbor rule” have a general overview.
If you need help, you will likely find the information you need on the IRS website or other online outlets. You will need to decide if the lack of in-depth support is worth saving money.
Email and Online Support
Free edition members have unlimited email and online technical support. The only “catch” is that free filers don’t get real-time assistance.
Response times can depend on the current number of support tickets. You might receive a response in minutes, or it could be the next day.
It’s best to see if the online FAQs can answer your tech support questions first.
Live Chat Support
FreeTaxUSA responds to deluxe edition customer support tickets first. You also get live chat support, which can be easier and quicker than sending multiple emails.
Live chat support is available during tax filing season from 8 am until 12 am Eastern time, Monday through Saturday.
Is FreeTaxUSA Easy to Use?
Yes, FreeTaxUSA is easy to use for most people. Is it easier to use than TurboTax, which is the “gold standard of tax prep software?”
Not exactly, because TurboTax supports auto-import for most common tax forms.
For example, TurboTax can import tax forms directly from your bank and investment accounts. Auto-import can save you time and prevent reporting errors.
These auto-import tools are a relatively new feature for high-end tax software.
While you need to input each block of your various tax forms manually, it can only take a few more minutes to complete your return.
Also, FreeTaxUSA may ask a few more unnecessary questions than more expensive products. For example, FreeTaxUSA will ask if you have common and uncommon tax forms.
During the interview process, FreeTaxUSA sees if you qualify for over 350 deductions and credits. These are the same item sets that other tax software analyzes.
With the competition, you’re more likely to get the same results.
You can also see an overview of the possible forms, deductions and tax situations on a home screen. If you haven’t visited a section yet, it will say so.
Does TaxFreeUSA Have a Mobile App?
FreeTaxUSA currently doesn’t offer a mobile app, yet its website is mobile-friendly. A mobile app is a nice touch in today’s world.
Since FreeTaxUSA doesn’t support W-2 snapshot uploads, it may only be an inconvenience if you want live chat support.
You can make the mobile website work if you have a simple return or file with the free plan. But honestly, no complex return is fun to prepare with only with a mobile app.
Overall, FreeTaxUSA may not be your best option if you plan on filing your taxes with a smartphone.
Is FreeTaxUSA Safe?
FreeTaxUSA follows the standard security practices as other online tax prep software.
All data is encrypted, and FreeTaxUSA owns its computer servers. These two features don’t make FreeTaxUSA hack-proof, but it’s a healthy start.
Each time you log into your account, you must enter a time-based password. This one-time password arrives as an email, text message or phone call.
More banks, investing apps and websites are using this security tool to prevent account breaches.
Taking it a step further, you get email alerts for these account changes:
- Security questions
- Phone number
- Bank account for direct deposit
These alerts are similar to what a credit monitoring service provides for your credit report.
Is FreeTaxUSA Legit?
Yes, FreeTaxUSA is a legit way to file your taxes online. The 43 million+ completed tax returns are visible proof.
Also, FreeTaxUSA’s parent company, TaxHawk, has had Better Business Bureau accreditation since 2005.
The following FreeTaxUSA guarantees add an extra layer of trust.
Maximum Refund Guarantee
FreeTaxUSA will refund your original tax prep fee if another software gives you a larger refund or smaller tax liability.
If you file an amended return, you get a coupon from FreeTaxUSA.
100% Accuracy Guarantee
Perhaps the most valuable guarantee is the 100% calculation accuracy guarantee.
If the IRS or your state tax agency finds an error, FreeTaxUSA reimburses the penalties and interest.
Each year, FreeTaxUSA tests lots of different tax situations to look for calculation errors. This beta testing reduces the likelihood you will get an error.
Still, this guarantee doesn’t cover user-input errors like spelling mishaps or data entry mistakes.
You have 45 days to notify FreeTaxUSA to claim reimbursement for applicable fees and penalties.
Always Free Federal Tax Return
No matter how complex your tax return, nobody pays a prep fee for a federal tax return.
Other “free” tax software starts all filers at the basic tier that costs $0 for the federal and state return.
As your tax situation gets more involved, you will need to upgrade to continue preparing your return.
All FreeTaxUSA users will pay to file a state tax return. However, this fee can still be half the cost of most FreeTaxUSA alternatives.
Who Should Use FreeTaxUSA?
FreeTaxUSA is a good option if you fall into one of these categories:
- Earn a small income and can’t afford large purchases
- Like saving money
- Are comfortable filing your own taxes
- Don’t need one-on-one tax advice
- Desire to use one of the oldest online tax software programs
You will want to avoid FreeTaxUSA if you’re uncomfortable preparing your own tax return. If you have a basic tax return, other programs let you file one free state tax return too.
Finally, the self-employed or those with the most complex tax situations may appreciate using a CPA.
A tax professional can help you find niche-specific tax deductions and credits other than the 350+ most common items.
Plus, a CPA can help you navigate tax forms that are hard-to-understand.
Positives and Negatives
Here are some of the pros and cons to consider:
- All federal tax returns cost $0
- Competitive state tax return pricing
- Can handle most personal income tax returns
- Filing online tax returns since 2001
- No one-on-one tax advice
- Basic federal returns must still pay to file a state return
- Extra $19.99 fee if you pay filing fees from your tax refund
FreeTaxUSA is a reputable online tax software with some of the lowest filing fees. It’s worth trying FreeTaxUSA if you want to get the same results as the most expensive programs.