The Best Free Tax Software
Most taxpayers have to pay to file their return. But if you’re one of about 10 million Americans with a relatively simple tax scenario, you can take advantage of the best online tax software for zero dollars come April 18th (which is the filing deadline day for 2017). We reviewed 20 of the industry’s best tax software and found the top three free editions with the tools and educational resources to make paying your dues to Uncle Sam as easy as possible.
We re-evaluated the free offerings of the best online tax software with a focus on ease of use, as well as the usual credits and deductions, W-2 import capabilities, and free federal and state returns. Our top picks are the same for the third year in a row.
TurboTax, H&R Block, and TaxAct impressed us with their software for 1040EZ and 1040A filers, and we think you’ll be happy using any of them. But TurboTax’s Federal Free Edition is the easiest of all to use — even on mobile devices — and features the most comprehensive customer support tool of all the free editions: the AnswerXchange. If you do need to upgrade to a paid version, though, you might find H&R Block’s in-person customer service and TaxAct’s affordability attractive.
How We Found the Best Free Tax Software
Free online tax software is designed for the simplest of all tax situations: forms 1040EZ and 1040A. Even so, all our top picks had to meet a few basic requirements we would expect from any tax software, paid or free:
- Ease of Use: Self preparers should be led through the entire filing process with step-by-step instructions and visual aids that are easy to understand — even if you’ve never filed your own taxes before. All our recommendations are the cream of the crop when it comes to workflow, educational resources, and customer support tools.
- Deductions and Credits: No matter how simple your return is, it’s likely there are write offs you aren’t aware of. Our top picks help 1040EZ and 1040A filers take advantage of all applicable deductions and credits, including the Earned Income Tax Credit and Child Tax Credit, without upgrading to a paid edition of the software. (The only credit 1040EZ filers can claim is the Earned Income Tax Credit.)
- W-2 Import: Importing your income information automatically saves time and helps reduce errors. We avoided software that didn’t offer imports either via a photo of your W-2 or by uploading your previous tax return.
- Free Federal and State Returns: It wouldn’t really be the best “free” tax software if state returns cost extra. Our recommendations help prepare both free of charge.
Our Picks for the Best Free Tax Software
It doesn’t get any simpler than TurboTax. From the moment Federal Free users snap a pic of their W-2 (or import it directly from one of TurboTax’s many payroll partners), the entire process is a series of clean, uncomplicated prompts that guide you like a friend — not an instruction manual. The software is littered with relevant “FYIs” and links to TurboTax’s surplus of educational resources; each one placed in just the right spot to help make sure you don’t miss anything that could make major waves in your return, like how filing jointly could save you money or that you will need to file form 1040A instead of 1040EZ if you want to take advantage of certain scholastic credits.
Inputting basic information on TurboTax.
All our top picks have apps that allow 1040EZ and 1040A filers to complete their returns for free on smartphones and tablets, but again, TurboTax comes out with the cleanest interface of all. Its app feels the most fluid in use, and most importantly, the flow and icons reflect the exact same workflow as the desktop, so jumping between your desktop and smartphone is a breeze.
Here’s another way to spin it: For those who don’t have access to a laptop or desktop computer, TurboTax is the best way to file your taxes for free. And believe it or not, lots of people do just that — according to TurboTax, over six million self-preparers completed their returns from start to finish on mobile devices for the 2015 fiscal year.
Inputting basic information on an iPhone 6 Plus. All three apps are easy to use, but it’s little things like 1Password integration, smoother swipes, and a more intuitive menu that set TurboTax apart. From left to right: TurboTax, H&R Block, and TaxAct.
Unless you’ve prepared taxes before, it’s hard to have all your ducks in a row the first time your sit down to file. Let’s say you’re filling out the personal information section and can’t remember your spouse’s social security number. With TurboTax, you can skip most any question you don’t know the answer to offhand and complete it later — meaning you could leave the SSN field blank and continue on filling out what you do know. H&R Block and TaxAct also allow question skipping in a few select sections, but not nearly as much as TurboTax. It’s a seemingly marginal difference that makes the overall process much more approachable.
Another thing that makes TurboTax the king of free filing is its AnswerXchange tool, which is the combination of a self-help FAQ database and online community of tax professionals and other users. It’s also really, really comprehensive. We found answers to several questions we had while researching TurboTax (like whether TurboTax offer phone support to free users) with just a few clicks. But if you don’t manage to find what you’re looking for, you can also submit questions to the rest of the community for feedback. That process isn’t as quick as TaxAct’s dedicated phone line for free users, but AnswerXchange is by and large the most exhaustive online resource of all our top picks. (H&R Block only offers technical support via live chat for free users.)
Other Free Tax Software to Consider
H&R Block’s primary selling point is that is has tax experts on the ready at 12,000 locations nationwide — and really, there’s no better support tool than a real human. However, Free Edition users do not get access to in-person help. Rather, H&R Block only offers “technical support” via live chat, which is far less appealing. Otherwise, its Free Edition is a top-notch software option that is second only to TurboTax, and has a nice little perk: It’s the only free edition of any tax software that allows users to import their last return for free — and it works no matter which tax prep company you used. TurboTax’s Federal Free Edition doesn’t offer prior-year imports that weren’t created with TurboTax, and TaxAct charges $15.
TaxAct lacks certain forms that make it impossible for residents of certain states to e-file. Otherwise, it’s a great free tax software that competes closely with TurboTax and H&R Block. The software is impressively simple, and on top of that, it’s the only one of our top picks that offers unlimited email and phone support (during normal business hours, of course).
It’s also worth mentioning that if you don’t feel safe inputting your data online, TaxAct is the only company that has a desktop version of its free edition.
Did You Know?
Do I qualify for free tax preparation?
In order to use free editions of the best online tax software, you must file either form 1040EZ or 1040A, which are designed for the simplest of tax situations. If you can answer yes to any of the following questions, then you’re required to use form 1040 and you and won’t be able to file your taxes for free.
- Is your taxable income over $100,000?
- Do you have alternate sources of income?
- Income from self-employment
- Income received as a partner or a shareholder in an S corporation
- Income received as a beneficiary of an estate or trust
- Income from unreported tips
- Income from dividends on insurance policies that exceed the total of all net premiums you paid for the contract
- Do you need to itemize deductions? Most taxpayers can choose between claiming standard or itemized deductions — and it all depends on which one brings them the biggest return.
- Do you owe household employment taxes? Household employees are maids, gardeners, babysitters, and anyone else you employed to work at your private residence.
For more details, visit the IRS’ breakdown of all three US tax forms.
Form 1040EZ or 1040A: Which one should I use?
Form 1040EZ is the simplest of all three forms, but it isn’t always the best option. Even if you can file EZ, you should check to see whether any of the tax breaks that are available to 1040A filers could apply to you.
The credits you can claim on form 1040A are:
- Child tax credit
- Additional child tax credit
- Education credits
- Earned Income Credit (EIC)
- Credit for child and dependent-care expenses
- Credit for the elderly or the disabled
- Retirement savings contributions credit
The ACA If you bought health insurance via an Affordable Care Act marketplace, and received an advance payment of the premium tax credit, you will no longer be able to file form 1040EZ.
If any of those credits apply to your situation, you might be able to secure a larger return by filing form 1040A. Consider the following scenario: You’re a single working adult making about $35,000. You also recently graduated with your bachelor degree and have begun paying on student loans. If you file form 1040EZ, you won’t be able to take advantage of education credits that would allow you to subtract interest you paid on your loans from your taxable income.