FreeTaxUSA review: A suitable $0 option for most filers, but state returns cost extra

  • With FreeTaxUSA, federal returns are free regardless of how advanced your needs, but one state return is $14.99.
  • Some competing tax software providers offer free federal and state returns for simple tax situations.
  • FreeTaxUSA is missing a few nice-to-have features, like the ability to talk with a tax professional or upload documents for quicker data entry.
  • See Personal Finance Insider’s picks for the best tax software »

Hiring a CPA to file your taxes can cost a pretty penny. So you’ll just file your own taxes online, right?

Well, depending on which tax preparation software you use, filing online can be more expensive than you might think.

For example, there can be a cost to filing online if you’re deducting the interest paid on student loans. Oh, you own a rental property? You’ll pay a little more. Are you a freelance worker? You’ll pay even more.

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So if you’re filing on a shoestring, which software should you use? One of the most budget-friendly options out there is FreeTaxUSA. You’ll be able to prep and file your federal return for free, and add on a state return for a low price. The platform is easy to use, though it is missing a few nice-to-have features, including the ability to talk with a tax professional and upload documents to save time on data entry. 

Here’s a look at how FreeTaxUSA works, how much it costs, and who it’s best for.

 
FreeTaxUSA
Editor’s rating   3.7 / 5
Review summary

FreeTaxUSA is free, unless you need to file a state return. The interface isn’t as advanced as higher-end competitors, but it is satisfactory for first-time and experienced filers alike.

Cost of DIY filing

$0 

+$14.99 per state ($12.95 until March 15)

Details
  • Clean and modern interface
  • Upgrade to priority customer support for $6.99
  • Easy prior-year return import, but no document upload

Free version covers

Most tax situations

Who should use FreeTaxUSA?

FreeTaxUSA provides quality software, especially considering the cost, though the user interface isn’t as advanced as TurboTax or H&R Block. 

You’ll be able to access the basics with FreeTaxUSA. If you value low prices over a super convenient experience and don’t need one-on-one help from a tax expert, then it’s a strong choice.

You might like filing with FreeTaxUSA if you:

  • Don’t qualify for free federal returns elsewhere
  • Value affordability over convenience
  • Don’t mind extended wait times for customer support

 

You might not like filing with FreeTaxUSA if you:

  • Qualify for free federal and state tax returns elsewhere
  • Appreciate time-saving features like document upload
  • Want personalized advice from an expert
  • Have foreign earned income, are a nonresident alien, or live outside the US

Is FreeTaxUSA really free?

Based on its name, you can probably deduce that one of FreeTaxUSA’s main selling points is that it’s free to e-file your taxes. Despite the company’s name, though, only federal tax returns are free. State tax returns cost an extra $14.99 (though a promotion running through March 15 discounts the cost to $12.95). 

You also have the option to pay $6.99 for the Deluxe edition. This upgrade will grant you access to priority live chat customer support, audit assistance, and unlimited amended returns. Deluxe may be worth it if you have a complicated tax situation or if this is your first time filing online.

If you’re expecting a tax refund, FreeTaxUSA will ask if you want to use part of it to pay for its tax prep services. It sounds more convenient than pulling out a debit or credit card on the spot, but beware: a $19.99 fee applies.

How does FreeTaxUSA work?

FreeTaxUSA was founded 20 years ago by a CPA and is a member of the IRS Free File Alliance.  

When you visit FreeTaxUSA’s homepage, one thing might confuse you. It looks like FreeTaxUSA offers three plans: simple, basic, and advanced. That isn’t the case.

The website is just showing that whether your tax situation is simple, basic, or advanced, you’ll still file your federal returns for free. It’s mirroring the offerings typically shared by other tax-prep sites.

Are you a homeowner? It’s free. Are you self-employed? It’s free. Do you have rental income? Well, you get the picture. There’s only one platform that meets the needs of almost every filer. There are only a few situations it doesn’t support, including foreign earned income, nonresident alien returns, and filers living outside the US.

The prep process looks just like that of other software: you answer a few questions and move through all the relevant tax forms where you can manually input your income and see if you qualify for certain deductions or credits. There are explainers of tax concepts along the way, and the software will perform the calculations. Eventually you’ll see your estimated tax refund or tax bill. 

What do you get with FreeTaxUSA?

  • An easy-to-understand interface. FreeTaxUSA has a clean, modern, and straightforward user interface that guides you through the tax-prep process.
  • No upsell. Because there’s only one plan, your tax-prep experience won’t be clouded by offers to upgrade to a more expensive product.
  • Multiple refund options. You can get your refund deposited into your bank account, sent as a check, or loaded onto a prepaid debit card. 
  • Tax return storage. FreeTaxUSA will store your finished tax returns in your account for up to seven years.
  • Accuracy guarantee. FreeTaxUSA will pay IRS penalties and fees related to calculation errors. If it’s determined that you entered information improperly, the guarantee does not apply.

Is FreeTaxUSA reliable and safe?

FreeTaxUSA keeps your information secure with data encryption. It also requires multi-factor authentication every time you log in to verify your identity.

When it comes to calculating your taxes owed or expected refund, FreeTaxUSA is reliable. 

Are there any downsides to using FreeTaxUSA?

While you can import prior-year returns to pull in some information automatically, one of the biggest downsides to FreeTaxUSA is the inability to upload tax forms like a W-2 or 1099 from your computer or a bank. If you have multiple streams of income or investment sales, automatic data entry can save considerable time.

You might come across online customer reviews in which users grumble about FreeTaxUSA not really being free since you have to pay for state returns. Here’s the thing, though: You’re still probably going to pay less with FreeTaxUSA than most big-name tax prep companies if you have to file multiple tax forms.

However, TurboTax, H&R Block, and TaxSlayer offer free plans with free federal and state returns in some cases. So if you qualify to file with their free plans, there’s no need to spend money with FreeTaxUSA. Plus, the bigger-name brands have more developed user interfaces, so you could end up paying less and having a more convenient experience — including document upload capabilities — if you qualify for free filing.

A newer software on the scene, Credit Karma Tax, also offers completely free filing for both federal and state returns for most tax situations; you just need a Credit Karma account to start. What it doesn’t cover, however, could be a deal breaker for some people, including disallowing returns for those who earned income in a state they don’t reside in and part-year state returns — situations that FreeTaxUSA does cover.

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