While we can all accept the adages of “There is no such thing as a free lunch,” or that “Free can be very expensive,” when it comes to the Internet, there is often the allure that the whole thing should be free. Perhaps this goes back to the origins of the internet, where users exchanged idea and content for free, but for those that embrace the ‘Free philosophy,’ when it comes to doing their taxes, should take a look at FreeTaxUSA.
- Want to try FreeTaxUSA? Check out the website here
No fly by night operation, or underground pirate website based on an island, rest assured as FreeTaxUSA was founded in 2001 and has filed over 18 million returns. It states that it has over 150 employees, has an A+ rating with the Better Business Bureau, is an IRS approved e-Filer, and 100% made in the USA
It may seem a little enigmatic to talk about tiers with free tax software, but like other tax software solutions, FreeTaxUSA does indeed have them. Also, while much of it has no cost, for some higher tier options, there is a charge, although it is still quite low cost for those that need those options for their tax situation.
On the first rung of the offerings from FreeTaxUSA is the basic tier. Unlike some competitor starter tiers that only handle the most basic of returns, akin to a 1040EZ tax situation (although the IRS no longer offers that form), this Basic tier is considerably more usable, and can handle more complicated joint returns, investment income, home ownership issues and deductions for self-employed income.
And yes, the cost is truly affordable at $0, and is not just a stack of tax forms as it does provide step by step guidance, and support via email and the account information center. Also included are options to e-File or print the return, customer support, and it can handle filing a tax extension. The unsupported tax situations of this tier are the truly more complicated ones, such as Nonresident Alien Income, Foreign employment income, or Archer MSA’s.
Across all the tiers, none provide a State return, which most users will need for their tax filing purposes. Thankfully, there is the option of adding it, and at a more affordable cost than most competitors at $12.95 (about £10). In fact, if you are wondering how FreeTaxUSA can make any money, it is stated that they profit from the State tax software addon, and also the other optional services- which it is more than upfront about.
Speaking of additional services, the basic tier is not the only one, and there is also a ‘Deluxe Edition’ available, which costs $6.99 (about £5). For this modest price, the user gets upgraded to priority email support, access to live chat, and Audit Assist to have access to a specialist for guidance in the event that your tax return gets audited- although the specialist will not directly correspond to the IRS on your behalf. Also included is the ability to file unlimited amended returns. However, no additional features are added.
FreeTaxUSA is based around an online software portal, with nothing to download. For the end user, the advantages are that a tax return can be completed easily on multiple devices, the software is kept up to date on the server, and does not require updating on each individual machine.
Such a setup raises security concerns, with personal data entered online. TaxFreeUSA has this covered with data encrypted on their site with SSL, data transmitted to the IRS is encrypted to “Exceed the IRS encryption standards,” and there is 24 hour monitoring of the physical site servers. Sign ins are secure as well, with multiple layers of protection including enforcement of strong passwords, and two factor authentication.
The standout feature of FreeTaxUSA is of course that the basic service is free. However, what is notable here is that comparing FreeTaxUSA with other online tax services that offer a free tier, we find FreeTaxUSA to be particularly competent, and not limited to a lower income, no itemized deductions, or no self-employed income like many of their competitors do.
In case you used a different product last year, FreeTaxUSA makes it simple to upload last year’s taxes as it can import data from a PDF, so whatever service you used, it has you covered.
The downside of FreeTaxUSA is that the interface, while clean, is simplified. This means that while it does gather your data through an interview process, there is little that goes deeper beyond this, and lacks the guidance, and further information that some newbies can use to guide them through their tax return. However, this no nonsense interface can be a plus to tax veterans who already know how to do their tax return and just need to get on with it.
Overall, FreeTaxUSA lives up to its name, and handles the majority of tax situations, providing an ultra affordable solution to tax software for the vast majority of users, and a far more capable package than most of their competition that gimps the free tier, to upsell to a higher tiered package. While the state return does add some cost, we like that it is quite modest, and overall is considerably less expensive than what most of their competition charges to add State return filing capability.
Our concern is that while the Deluxe tier also has a modest cost, it does not add significant capability, such as to handle the more complicated (and uncommon) situations such as Foreign Employment Income, and Archer MSA’s. Therefore, FreeTaxUSA works great for simple and intermediate tax returns, but falls short of the most complex of returns, so users need to take honest stock of their tax return needs before choosing this solution.
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