Free Tax Prep Software

Category: Finance

U. S. citizens are rapidly approaching their annual time to “render unto Caesar” – tax season. It’s too soon to panic, but not too early to think about tax preparation software. The good news is that most people can use free tax software that makes all that form filling easier. Here are some you can try…


Uncle Sam Wants You (to file your 1040)

Did you know there are free tax software packages in addition to the well-known brands that cost $20 for simple tax returns and up to $80 for business and investment tax preparation? Some of the freebies will handle only the simplest tax situations, but at least one will do everything you could want.

Liberty Tax Service’s starts you off with a free basic tax program and, if that proves insufficient for your situation, sells you more expensive modules as needed. Its online question-answer format is ideal for delivering just the capabilities you need and no more. You also have access to live chat with trained Liberty tax preparers starting with the $19.95 Deluxe package.

Intuit Corp., maker of genre-leading Turbo Tax, also offers a free basic online tax program. It’s for people who have just W-2 income, not business profits, interest earnings, capital gains, etc. Unlike Liberty, Intuit gives you live chat with experts in its free edition. I didn’t try it, but I wager those live “tax preparation advisors” are there to maximize Intuit’s revenue as much as they are out to save you money.
Free Tax Prep Software

Then there’s TaxACT Free, and HR Block TaxCut Free, and several other free tax software programs. What’s up with that? Well, the government has pushed software makers to provide free basic Federal tax software for years. Over a dozen tax software companies offer a free tax prep service, and each has its own eligibility criteria, based on your income, age, state residency, and other factors. Typically, these freebies will handle filers with incomes of up to $58,000, but they won't do anything more complicated than a basic 1040A form.

You can fill out a simple form at the IRS FreeFile website to learn about free tax software options for which you qualify. The form will ask only for your age, income, state of residence, whether you received military pay, and if you are eligible for the earned income tax credit. After submitting the form, you'll see links to several free tax filing options.

Free State Tax Returns and DIY Options

Some even offer free state tax returns, but others charge a fee (usually less than $20) for state returns. If you live in one of these states (Arizona, Arkansas, Delaware, District of Columbia, Georgia, Idaho, Indiana, Iowa, Kentucky, Michigan, Minnesota, Mississippi, Missouri, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Virgina, Vermont, or West Virginia) there's a good chance you can file a free state tax return. Residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not require state returns for W-2 wage earners. New Hampshire and Tennessee require a state return only for those who have interest and dividend income.

If your income exceeds $58,000 or you have more than just wage income, you can still get free tax software in the form of FreeFile Fillable Forms. These online versions of every IRS form won’t give you advice or hold your hand; you need to know what forms you need. On the other hand, if you know your tax situation well then you don’t need to waste time on all the hand-holding that novice-oriented tax programs provide.

These forms are “intelligent” in that they can perform basic math, e. g., totaling all of the lines of data you enter in a form, multiplying dependents by exemption amount, etc. But they don’t offer advice and explanations as the pricey programs do. This seems like a good option if your job and financial situation hasn't changed since last year. Just look at last year's tax return, see which forms you filed, and you should be good to go.

There are still many taxpayers who haul shoeboxes full of receipts to a tax preparer’s office, and there may be a handful who still struggle with paper and pencil five minutes before the April 15 tax return filing deadline. But the majority of Americans now do their own taxes using software, and for the savvy ones there is no need to pay for tax software.

How will you get your taxes done this year? Post your comment or question below...

Ask Your Computer or Internet Question

  (Enter your question in the box above.)

It's Guaranteed to Make You Smarter...

AskBob Updates: Boost your Internet IQ & solve computer problems.
Get your FREE Subscription!


Check out other articles in this category:

Link to this article from your site or blog. Just copy and paste from this box:

This article was posted by on 11 Feb 2014

For Fun: Buy Bob a Snickers.

Prev Article:
Demystifying the Backup

The Top Twenty
Next Article:
Geekly Update - 12 February 2014

Most recent comments on "Free Tax Prep Software"

Posted by:

11 Feb 2014

I love Tax Act. I've been using it for about 20 yrs. Back in the 90's, it had a different name. If you want some additional benefits from it, you have to pay. If you doing just a 1040EZ, you can file your taxes within minutes. My husband does it now, because I'm just to lazy.

Posted by:

11 Feb 2014

TaxAct free does not have an income limitation.

Posted by:

Jim A
11 Feb 2014

For those not comfortable preparing their own returns, the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help (free preparation & e-file) for taxpayers who qualify. VITA income limit is 52K; TCE for 60 & older; neither can do Sch C with loss or business expenses over 10K.
In addition to traditional face-to-face tax preparation, the IRS is offering a self-assistance service at many VITA and TCE locations. If individuals have a simple tax return and need a little help or do not have access to a computer, they can visit one of the participating tax preparation sites and an IRS-certified volunteer will guide them through the process. MyFreeTaxes limited to 58K, but can complete any IRS 1040 and state forms.

Posted by:

Ed C
11 Feb 2014

I've been using TurboTax since it first came out. That's when it printed out the 1040 and you mailed it in...lot of paper! Still use it. By the way, you missed Illinois with the free state tax filing program. It took them a couple of years but it works good now.

Posted by:

Chris Sells
11 Feb 2014

State of Kansas allows taxpayers to file their taxes online for free.

Posted by:

11 Feb 2014

Bob, is there a way to check whether tax software companies collect and store our personal information? Or how well they protect it? Or how they use it?
I am tempted to use a bogus name, SSN, etc., print out the forms, then fill them out manually.

Posted by:

12 Feb 2014

For Nigel ... All Tax Preparation Companies, due protect your personal and tax information. In all honesty, it is no different, than how a doctor protects his/her patients information and medical issues.

I have used, both purchased and online Tax Preparation Software and have never had an issue. Yes, both companies have only used my information, to remind me, that Tax Time is coming and what they have to offer this year. That's it ... NO SPAMMING or anything, except friendly reminders. The companies that I speak of are Turbo Tax by Intuit and TaxAct Online. I have never felt uncomfortable with either company and they have both, served me well, in the past.

Posted by:

Horatio Barrett
12 Feb 2014

I use H&R but I mail in paper tax forms. If you don't like the IRS, do not use e-file. If everyone mailed in paper the irs would have to use its resources processing all that paper and not be able to audit people and steal more money.

Posted by:

13 Feb 2014

@ Horatio Barrett ... Sorry, sending in paperwork will NOT stop the IRS from Auditing. Auditing has been done , for decades, long before e-Filing came into play. I was audited back in 1980 ... Trust me, everything was done by calculator and paperwork, plus, everything was mailed in, in those days. Bottom line ... The IRS will audit anyone and anytime. Another thing, most people do not realize that, the IRS mainly does "random audits" and has for decades.

Posted by:

13 Feb 2014

Free basic online tax program. not free my friend filed charge her her $86.00 dollars

EDITOR'S NOTE: Well then she obviously didn't pick one of the free ones! Which one did she try?

Posted by:

16 Feb 2014

I started out using Turbo Tax Premiere Edition as I did the year before. I've been doing my own taxes for over 30 years-I found this years program very difficult to navigate. Between the Tax program and Windows 8 I'm ready to pull my hair out! I've used Tax Act on some of my family members taxes that aren't overly complicated, and it was okay. I just might give Liberty's tax program a try and save some $$.

Posted by:

12 Mar 2014

Pennsylvania started offering free online tax returns this year, and will require them next year. I used On-Line Taxes, seemed to be an easy way to go.

Post your Comments, Questions or Suggestions

*     *     (* = Required field)

    (Your email address will not be published)
(you may use HTML tags for style)

YES... spelling, punctuation, grammar and proper use of UPPER/lower case are important! And please limit your remarks to 3-4 paragraphs. If you want to see your comment posted, pay attention to these items.

All comments are previewed, and may be edited before posting.

NOTE: Please, post comments on this article ONLY.
If you want to ask a question click here.

Free Tech Support -- Ask Bob Rankin
RSS   Add to My Yahoo!   Feedburner Feed
Subscribe to AskBobRankin Updates: Free Newsletter
Copyright © 2005 - Bob Rankin - All Rights Reserved
Privacy Policy -- See my profile on Google.

Article information: AskBobRankin -- Free Tax Prep Software (Posted: 11 Feb 2014)
Copyright © 2005 - Bob Rankin - All Rights Reserved