Stock investing for dummies – Are Free Tax Filing Software and Companies Really Free?



Stock investing for dummies


stock-investing-for-dummies

You’ve seen the advertisements by now: “Start your return for free” or “file for free”. But honestly, are these tax software and service companies really free?

Not to mention the fact that the IRS has the FreeFile alliance, which is a group of companies that have committed to offering free filing for eligible individuals.​

We took a look at every major tax filing software and service, and broke down who is offering free filing and who isn’t. Many of these companies offer free Federal returns for certain filers, but then charge for the State return.

Here’s how all the major companies compared.

Which Companies Offer Free Federal and State eFile Tax Returns?​

As you can see, only 5 companies actually offer truly free options for tax filers. Those companies are TaxAct, TurboTax, FileYourTaxes, Jackson Hewitt, and FreeTax.com. 


All of the other companies on the list might advertise free, but it’s limited. Here’s what each company really offers.​

TaxAct

TaxAct does offer free tax filing for individuals filing a 1040EZ or 1040A. 

This includes both Federal and State returns.

The free version does not include phone support, and doesn’t allow you to import your prior year’s information automatically. ​

TurboTax

TurboTax offers a truly free tax filing option for the first time this year for individuals filing a 1040EZ or 1040A.

This includes both Federal and State returns.​

H&R Block

H&R Block offers a free Federal return and free Federal eFile, but the do charge $9.99 to file a state return when using their “free” version. 


stock-investing-for-dummies

Don’t fall for their fine print.

FreeTaxUSA

FreeTaxUSA advertised themselves in 2015 as the best place to file your taxes for free. That’s why I was surprised to see them charging $12.95 for State Returns, even under their “free” program. 

But it’s their advertising that is upsetting:


stock-investing-for-dummies

I counted, and they used the word “Free” 6 times, when in reality they charge $12.95 for the state return. I’m not quite sure how that is 100% free?

1040Now.net

Beyond 1040now.net having the second worst site of all tax preparation companies, their pricing is exceptionally confusing. Their site says Tax Year 2015 – Free online tax preparation. But none of their filing options are free.


stock-investing-for-dummies

They clearly charge $14.95 or $19.95 – there’s no free! So why do they start by saying free online tax preparation?

1040.com

While not being totally free, at least 1040.com doesn’t hide their pricing. In fact, they even say “Simply start your return, and you’ll pay the lowest price you qualify for”. That’s straightforward, and I appreciate that.

However, the free Federal version of 1040.com is only for 1040EZ filers. ​And even in this version the State Return will cost you $9.95.


stock-investing-for-dummies

ezTaxReturn.com

ezTaxReturn is another company that has no free filing options, but it advertises on it’s site “Free to Try”. I find that to mean there will be no costs involved, but apparently I’m wrong in this.


stock-investing-for-dummies

If you want to try it for free, you’ll end up paying $39.95 for their lowest priced option – which is clearly not free, but also higher than other companies like TaxAct.

FileYourTaxes

FileYourTaxes.com is hands-down the hardest to use, most un-user-friendly site available to the tax filing consumer. But, strangely enough, they actually offer Free tax filing.

However, it’s not without a LOT of stipulations. ​FileYourTaxes.com selected to offer services to those taxpayers, with an Adjusted Gross Income between $8,000 and $60,000, and who were between the ages of 15 and 65 at the end of the tax year, residing anywhere in the United States.

They also offer free State eFile for California consumers, if the individual is filing a 540-2EZ.

Confusing? Yes. Free? Yes.​

eSmart Tax

eSmart Tax is another company that offers free Federal returns, but charges $26.95 for state returns. Make sure you read all the way through, because they sure don’t make it stand out much:


stock-investing-for-dummies

Jackson Hewitt

Jackson Hewitt is another major tax preparation company that is offering truly free tax filing this year. While most of their site is designed to get you into their branches, you can file online for free.

Jackson Hewitt offers free tax filing for 1040EZ forms. This includes both Free Federal and Free State returns.​

OnLine Taxes

OLT.com is another online tax software company that hypes up “Free Federal Return For Everyone” because they charge additional for the state return.

You’re going to pay $9.95 more for a State Return with their free edition.​


stock-investing-for-dummies

Tax Hawk

Tax Hawk is another online tax preparer that advertises a free Federal return, but they also have marketing, in general, about a “free return”. It’s seems like they try not to mislead, but in other places do mislead consumers. For example, their current web header says “Free Tax Software…Federal & State Return Preparation”. But, in reality, it’s only free Federal.

If you sign up for their Free Federal Return, you’ll pay $12.95 for the state return.​


stock-investing-for-dummies

Tax Slayer

I appreciate Tax Slayer as being the most honest company when it comes to what you’re really getting for free. They clearly advertise that the Tax Slayer Free Basic Return will allow you to file a Form 1040EZ for Free. 

However, they do make it hard to find out how much you’re going to pay for the state return. Luckily, we found it, and you’re going to pay $23.99 additional.​

 Oh well, thank you for your honesty at least.​


stock-investing-for-dummies

FreeTax.com

FreeTax.com is the most interesting tax preparation company online currently. They offer truly free tax filing – no strings attached. You can file any form, have any income level – it’s all free.

Now, the site is a little hard to navigate, and honestly, I had to check the “free” aspect a bunch of times. But it’s legit. It’s a project by Liberty Tax and eSmart Tax to offer free filing solutions.​

Final Reminder About Free Tax Filing

A last reminder about free tax filing. If you don’t live in a state with income tax, or you live in Washington, D.C., you only have to file a Federal tax return – so you have a lot more free options!​ In that case, find a service you like that’s easy to use and you can stick with it for years to come.

If you want to estimate your taxes without “Starting For Free”, consider using a tax estimator – those are almost always free.​

– stock investing for dummies

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