What is FreeTaxUSA?
FreeTaxUSA 2020 is an IRS-approved e-file provider that has filed over 43 million tax returns with the IRS. As a top-rated tax software, they claim they can help you get the maximum tax refund you may be entitled to in the fastest way possible. It’s a great option for gig economy workers, homeowners, if you own a business, or if you’re an independent contractor/have 1099 income. FreeTaxUSA offers federal tax returns, E-file services, customer support, tax extension assistance, and printable tax return options. If you do upgrade to their deluxe edition or file state returns (which incur a fee), you can pay with a credit card or have the fee deducted from your refund for an additional $20 service charge from FreeTaxUSA.
In terms of the software, you can expect the same features as other e-filing tax services, such as simple document upload, deduction and credit maximization, health care taxation calculations, and self-employment, business, and investment income reporting. The difference with other services is FreeTaxUSA offers all of these included in their Free Edition. If you have more complex tax return needs, they also offer an upgraded Deluxe service that gives you help in the case of an audit, allows you to amend returns, and offers priority support. And while their federal tax filing service is free, there is a cost to use them for state taxes and certain add-ons.
This particular tax software is ideal for those who want value, yet still need options beyond the 1040EZ/1040A return. Their most significant perk is undoubtedly the opportunity to file any return, no matter the complexity, for a low price. For example, you can file a premium federal tax return completely for free. You can use FreeTaxUSA’s software to file forms 1040 (main return form), 1040SR (for seniors) and 1040X (amendments).
FreeTaxUSA also allows you to prepare prior year returns (2012-2018) at no cost. While you can’t electronically submit returns for these years, it makes it easy to get them prepared quickly. You can also easily import your tax returns from other software platforms if you used other competitor services in past tax returns.
- Free Edition: Federal $0 / State $14.00
- Deluxe Edition: Federal $6.99 / State $14.00
Ease of Registration
It’s easy to get started. Simply sign up for an account with your basic information and try FreeTaxUSA for free. FreeTaxUSA is also user-friendly. Throughout the entire application, FreeTaxUSA will use the data you give them to fill out any supporting forms your tax situation requires. At the end of the process, they’ll check your return for mistakes and provide you with a total refund amount for your federal and state taxes.
FreeTaxUSA gets consistently good reviews from users and has many benefits over other online tax services. The main advantage is how inclusive the free version of this service is for consumers. Among the many things covered for free:
- Over 350 Credits/Deductions: Includes itemized deductions and hundreds more
- Prior Year Info Import: Import your prior year tax information
- Tax Return Backup: Print your finished tax returns now or later
- Home Ownership: Write off mortgage interest and property taxes
- Charitable Donations: Get credit for your donations
- Filing History: Compare this year’s numbers with last year
- Small Business Income: File taxes with self-employed, 1099, or contractor income
- Investment Income: Report income from stocks, bonds, and dividends
- Rental Income: Claim your expenses and rental income
- HSA Contributions: Get a deduction for your Health Savings Account
- Student Loan Interest: Write off the interest you pay on student loans
- Joint filings/dependents: FreeTaxUSA provides comprehensive support for these
Another benefit is that you can bookmark pages of your tax return so you can take as much time as you need to complete your return. You can pick up where you left off and view which sections you’ve completed, see the times you’ve logged in and time stamps for when you visited all the pages in your tax return.
FreeTaxUSA offers lots of support during your tax return process. It provides an education section with answers to numerous tax situations. Their “Help Topics” section in the sidebar corresponds to the topic of the page you’re on, saving time and increasing accuracy for your support needs.
FreeTaxUSA Deluxe Edition
For $6.99, you can sign up for the deluxe edition, a great package for those who want a little extra peace of mind, are concerned about making errors on their returns, or have lots of questions. The Deluxe Edition provides:
- Audit assist: Will help you understand why you’re being audited and how to correspond with the IRS. However, they won’t represent you if you have a meeting with an IRS agent, nor will they correspond directly with the IRS on your behalf.
- Priority support: As a Deluxe user, you get access to live chat support in minutes. Note that chat representative can only help with completing returns and cannot give professional tax advice
- Unlimited amendments: “Amendments” refers to revisions you make to your tax return after you submit a return with an error. Amendments are relatively rare.
There are several paid add-ons FreeTaxUSA provides that may help you fine-tune your tax filing strategy:
- Printed tax returns: $6.99 for loose-leaf, $12.99 for bound copy
- Pay fees with your refund money: $19.99
- Current and past state returns: $12.95 or $14.99, respectively
If your tax refund is bigger than what you get through FreeTaxUSA, the company will refund you any fees you paid to file and let you amend your return for free. You don’t get this perk, though, if the refund is smaller because of your mistakes.
This guarantee covers any calculation mistakes the software makes resulting in penalties or interest you pay the IRS. The guarantee doesn’t cover any interest or penalties you pay as a result of you entering incorrect information into the software. If you believe the software made a mistake, you need to send a letter to FreeTaxUSA within 45 days of the penalty or interest charge.
Limitations of FreeTaxUSA
While FreeTaxUSA is a great service, there are a few limitations. For one, you can’t file with FreeTaxUSA if you’re living outside of the United States or working for your company abroad. There are a few forms that you can’t file with FreeTaxUSA:
- Form 2555: Foreign employment income
- 1040NR: Nonresident alien returns
- Form 6198: At-risk limitations
- Form 8853: Archer MSA
FreeTaxUSA 2020 also receives rave reviews for the software’s ease of use when compared to other online tax preparation services. There were some complaints about slow refund processing time, issues with state tax returns, and high traffic on tax day causing some crash issues so be sure to file early and consider using the Deluxe Edition for your state returns if you want expedited customer support. Overall, FreeTaxUSA is a streamlined and affordable way to file your federal taxes for free (or state taxes for a nominal fee) no matter their complexity and with no hidden charges. Or upgrade to their Deluxe Edition for only $6.99.