Stock investing for dummies – FreeTaxUSA Review 2016: Most Improved Tax Software

Stock investing for dummies


What’s better than Free? What about something free that actually works? In the world of free tax software, complex filers get the shaft. But not this year.

This year, FreeTaxUSA and allows even the most complex filers to file their federal taxes for free, and in a timely manner. FreeTaxUSA and TaxHawk offer the same software, and allow users share profiles across websites. For the purpose of this software, both products will go under the umbrella FreeTaxUSA (for reference, TaxHawk is the owner of FreeTaxUSA, but FreeTaxUSA is the more popular online tax preparation software).

​This bargain basement tax software isn’t as slick as more expensive products, but their updated navigation and improved knowledge library make it a good option for budget conscious filers. Is it the right tax software for you? Before you jump in, this is what you should know.

Watch Our Free Tax USA Video Review​

FreeTaxUSA Prep Process

​The tax prep process is a self guided journey that requires that you know your own tax situation. Unlike more user friendly “interview style” software packages, you have to figure most things on your own. You will start by entering personal information, and then you’ll move onto an income screen. When you choose to “Start” a section, you enter into a new screen.


The new screen will prompt you to enter the required information using forms that look eerily similar to tax forms. However, FreeTaxUSA has improved their interface, and they’ve made it easier to fill out their forms.

​The red question marks explain in layman’s terms what the form wants and where to find it. On the right hand side of screen, FreeTaxUSA posts helpful “Popular Help Topics” including “Help with this Page.”


As a tax filer, you control the process with FreeTaxUSA. The software will alert you if you’ve missed entering required information, but the other checks aren’t robust. That is to say, you could make mistakes if you aren’t careful.

​But FreeTaxUSA prevents some user errors. If you need to depreciate or amortize expenses, you’re in luck. FreeTaxUSA offers robust depreciation calculators. You cannot import a Schedule E for real estate, but FreeTaxUSA makes calculating these expenses easy. It also allows you to use non-standard schedules within the software.

​Once you complete the income section, you’ll move to a summary section, followed by deductions, credits, State information and filing. Throughout, the software remains barebones, but it offers some nice navigation features. For example, it has a “Previous Page” option that allows you to go back a screen. At any point, you can use the menu bar at the top of a screen to move elsewhere in the software.


In a single year, the FreeTaxUSA software package has improved a ton. If you’ve overlooked it due to clunkiness in the past, this is a great year to reconsider it.

What If I Get Confused?​

In previous years, confused filers were largely left to solve problems on their own, but FreeTaxUSA improved their software this year. FreeTaxUSA introduced a “Where do I Enter?” link in the right hand screen. If you’re struggling to find something you can click the link, and find hundreds of common credits, deductions, income and expenses that you might have missed.


In addition to the “Where Do I Enter” feature, FreeTaxUSA revamped their knowledge articles. The articles no longer regurgitate the tax code. Instead, they are more user friendly and accurate. If the articles don’t get you what you need, you can upgrade to the $6.99 Deluxe package. Deluxe users get Live Chat and Phone support with tax and technical specialists. This is a low price for a huge value add.

FreeTaxUSA 2016 Pricing And Plans

FreeTaxUSA offers free Federal filing, no matter what your situation. If you need to file for your state, you will pay $12.95. Upgrading to the Deluxe package gives you extra technical and tax support. It also gives you guaranteed professional audit assistance. If you get audited, FreeTaxUSA will provide unlimited support to you. The Deluxe package is $6.99, and at such a low price it is easy to recommend.




$0 Federal + $12.95 State

$6.99 Federal + $12.95 State

Best For:

Anyone who feels comfortable with a much more DIY approach to entering their tax information

If you need extra support and want the protection of audit assistance should it be necessary

Final Verdict


​If you’re a budget conscious, complicated filer, you should consider with FreeTaxUSA this year. It doesn’t offer the best interface, but it is the best free (or almost free) option in the market. Real estate investors and small business owners should especially consider it.

​Since FreeTaxUSA doesn’t offer an import feature for 1099 forms, stock traders will need to consider alternative options (or spend hours entering their information).

​Simple filers (those with just a 1040EZ or 1040A), should look to TurboTax or TaxAct for simpler, more robust software for free.

The bottom line is that FreeTaxUSA does offer free Federal filing, no matter your situation. If you’re comfortable with your taxes and entering your information, it’s a great option. But if you need a good interface to help you, try another product.​ Try FreeTaxUSA for free.

Have you tried FreeTaxUSA or TaxHawk?​

– stock investing for dummies

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