Reviews of Free File Tax Preparation Programs
Some taxpayers are eligible to prepare their federal tax returns at no cost using web-based tax software that's made available through Free File, an alliance created between the Internal Revenue Service and leading tax preparation software providers. These products make tax preparation free—or at least very inexpensive—for many Americans, but some limitations do apply.
Federal law limits Free Filing to taxpayers with adjusted gross incomes of $66,000 or less in the 2017 tax year. This is the return you'll file in 2018. But each software provider can and often does set its own criteria for eligibility. In some cases, the income threshold is less, although it can't be more than $66,000. Some age restrictions might also apply, and not all of these programs are available in all states.
Luckily, the IRS offers an extremely helpful interactive tool on its website where you can simply answer a few questions about your age, your income, and where you live. The wizard will tell you which of these software programs are available to you.
We prepared a sample tax return using each of these current Free File software programs, noting each program's user interface, navigation, help content, and error-checking features. Then each program was ranked on a five-point scale based on this testing criteria:
- A 5-star rating means the tax software offers exceptional functionality in preparing this year’s tax return as well as planning for next year.
- A 4-star rating indicates that the tax software provides top-notch functionality both to prepare this year's tax return and to plan for next year's taxes.
- A 3.5-star rating means that this tax software is fully functional and provides useful help and easy-to-understand navigation. It might also offer some error-checking or planning features.
- Tax software with a 3-star rating is fully functional to prepare a tax return.
- A 2.5-star rating indicates that the tax software is functional, but it might be lacking in help, navigation, or error-checking features. Another possibility is that we might have encountered some difficulties with the software that we were later able to resolve.
- A 2-star rating indicates that this tax software lacks functionality in at least one core area of preparing a tax return. This prevented us from completed the test scenario.
The Free File software programs are sorted by rating from highest to smallest, and those with the same rating are sorted alphabetically.
FreeTaxUSA earned high marks for its help features, its good use of screen space, and its review functions. The software's Support Center and Tax Help Menu really make it shine in user-friendliness, although it's not particularly mobile-friendly.
It's free for federal use through the Free File Alliance if you're age 61 or younger and your adjusted gross income is less than $51,000. Otherwise, you can purchase Deluxe FreeTaxUSA for just $6.95, which is almost free. State returns cost $12.95 for most states, although some are free.
TaxACT Free File Edition: 3.5 Stars
TaxACT's colorful and friendly interface and strong help functions make this software highly useful. TaxACT gets high marks for including a withholding calculator, FAFSA worksheets, and guidance on the health insurance mandate.
It's free for federal use, and state returns are free as well. Free File Alliance users must be age 56 or younger with AGIs of less than $53,000 or be eligible for the Earned Income Tax Credit or have an AGI of less than $66,000 if you're active duty military.
If you don't meet these guidelines but your tax situation is such that you're planning to file one of the easier tax forms, 1040A or 1040EZ, TaxACT offers this service for free as well separate from its Free File service.
If your tax situation is more complicated, you can pay $15 for expert help.
TaxSlayer Free File Edition: 3.5 Stars
TaxSlayer earns high marks for offering users multiple ways to navigate its software. The design is simple and uncluttered, and it offers a good explanations of tax topics. It's available in English or Spanish.
TaxSlayer is free for both state and federal use, but only for Form 1040EZ unless you file through the Free File program. TaxSlayer's age limit requires that you be younger than 52 years old.
TurboTax Free File Edition: 3.5 Stars
TurboTax gets high marks for its easily accessible help content, frequent reviews to check for errors, and its professional look and feel. Additional features for preparing an extension or amended return are available, and TurboTax helps calculate withholding allowances.
It's free for federal use under the following criteria:
- Adjusted gross income of $33,000 or less, or
- Adjusted gross income of $66,000 or less for Active Military, or
- Eligible for the earned income credit.
All state returns are free. And if you decide for some reason that you want to upgrade to one of TurboTax's paid versions, you can so without losing any of the data you've already entered.
1040.com's program is efficient, although not glitzy. The help functions are pretty decent. The error check caught a data entry error and we were able to jump from one part of the tax software to another part when necessary.
The Free File AGI limit is $60,000, but the program is also free for federal use if you need only file Form 1040EZ.
ezTaxReturn Free File Edition: 3 Stars
ezTaxReturn is really great software for the intermediate to more advanced user. The worksheet-based data input screens minimize clicking and speed up the tax preparation process. The limited help content, however, makes this a more difficult option for the casual user. State returns are also free.
H&R Block Free File Edition: 3 Stars
H&R Block's Free File Edition is very functional, no-frills Web-based tax software. The software features sophisticated error checking and is backed by H&R Block's "worry-free audit support."
On the downside, it's a bit cumbersome to go back and change your answers if you happen to pick the wrong one the first time around. And help content is limited. It does, however, accommodate some itemizing if you prefer that to claiming the standard deduction.
Unfortunately, its Free File Alliance option is particularly stringent: It's limited to age 50.
FileYourTaxes Free File Edition: 2.5 Stars
FileYourTaxes checks for errors after each data input screen and it can file extension. The software's navigation may be particularly frustrating for some people, however.
It's free for both federal and state returns and the income limit mirrors federal rules: It's $66,000 for 2017 returns. There's also a minimum AGI rule. Your adjusted gross income must be at least $9,000 unless you're active duty military.
Although OnLine Taxes is a fully functional tax preparation program, its biggest drawback is the lack of more contextual help to explain particular tax topics. The software can prepare extensions and amended returns. It's free for federal use, but state returns cost $9.95.
eSmartTax Free File Edition: 2 Stars
eSmart Tax provides a fine experience for taxpayers with relatively simple tax situations. The software's help functions are limited to providing answers to just 11 commons questions, and we weren't able to complete our sample tax return due to an error message relating to rental income that we couldn't resolve. It's not recommended for landlords with rental properties.
This software is free for federal use, but state returns cost comparatively significant $26.99 and the Free File version is limited to those age 54 and younger.