Tax preparation can be a headache for millions of Americans that pay their taxes properly and promptly. The rules and regulations concerning taxable and non-taxable items, deductibles, and exemptions can be confusing for first-timers, not to mention that these can change at the drop of a hat where the average taxpayer is concerned. Many Americans then skip filing their taxes, pay incorrect taxes, or pay penalties for late filing, among others, and it’s such a shame.
Fortunately, the Digital Age has provided taxpayers with the likes of FreeTaxUSA, an online tax preparation website that makes it easier and faster to file, pay and monitor your taxes, year in and year out! With it, there’s little to no excuse about making one too many mistakes in your tax forms and possibly getting audited by the Internal Revenue Service.
The following FreeTaxUSA prices are estimates only.
Free Tax Software
|Get your maximum refund and file your federal return for free.||$0.00|
|State Tax Return||$12.95|
|Deluxe gives you more||$6.99|
File a Free Extension Now
|File an extension for||$0.00|
Free Old Returns
File your 2011, 2012, 2013, 2014, 2015, and 2016 tax returns.
|Prior Year Tax Filing||$0.00|
|Federal Always Free||$0.00|
History of TaxHawk
FreeTaxUSA is owned by TaxHawk, Inc., a company founded by a Certified Public Accountant (CPA) and several professional software developers in 2001. Currently, it employs more than 150 employees including customer service representatives, tax preparers, and tax advisors, all of whom work in the United States. Indeed, TaxHawk, Inc., prides itself on being a 100% American company that create American jobs and support American families – and if it’s important to you, then you will like using its tax software.
With millions of state and federal tax returns filed securely and promptly under its belt, FreeTaxUSA is considered as among the best software of its kind. TaxHawk’s team of tax professional performs rigorous testing and updates the software to ensure its compliance with the latest in state and federal standards including changes to the tax code. Thus, FreeTaxUSA is ready to use for the current tax season regardless of the changes in the rules and regulations, if any, affecting credits, deductions, and taxable items.
TaxHawk also assures its customers that FreeTaxUSA undergoes a stringent approval process performed by the IRS and by tax regulatory agencies in each state. Again, the approval ensures that FreeTaxUSA is reliable, especially in terms of compliance with current tax-related standards, a must for customers who want nothing less than accuracy in their tax returns.
Aside from being an authorized tax e-file provider by the IRS, FreeTaxUSA is also a founding members of the IRS Free File Alliance. It has also received consistent A+ ratings from the Better Business Bureau (BBB) and with a well-documented history of satisfactory to excellent customer service.
The bottom line: FreeTaxUSA is the go-to tax preparation software for millions of Americans who want secure, reliable and accurate tax returns!
Tax Services Offered
FreeTaxUSA comes in only two versions – the Free version and the Deluxe version. Keeping things simple in terms of choice has its benefits, particularly in providing straightforward services and their associated fees. Think about it: When a tax preparation software comes in four or five versions, as many of FreeTaxUSA’s competitors have, many customers will be confused and intimidated by the choices to be made. There’s also the fact that add-on fees and hidden charges can be added to the final bill without the consent of the customers – this isn’t so with FreeTaxUSA.
The Free version offers basic services like e-file service, tax return printing, and account information rollover, to name a few. But like most free versions of tax preparation software, it has its limits, too – added services mean extra cost. This is a more suitable version for lower-income individuals and smaller businesses.
The Deluxe version offers a more comprehensive array of services that higher-income individuals and larger organizations will appreciate. With the professional support of tax preparers and specialists, customers can avail of several services including but not limited to:
- Create a free account and use the services
- Estimate their taxes, view credits and deductions, and calculate refunds (i.e., tax calculator functionality)
- Print their tax returns and file these documents electronically
- Correction of errors on their tax returns
- Formulation of an appropriate response to IRS notices and letters
- Preparation for an IRS audit and understand its results
- Gather information stored at the audit center necessary for responding to IRS notices and preparing for IRS audits
- Update their tax information
Between the two versions, we obviously recommend the Deluxe version because of its wider array of features. While you will pay for these features, you will get high satisfaction from using FreeTaxUSA and, thus, you will get great value for your money. You can choose the Free version but it has its limitations and you have to be prepared to accept them.
Tax Situations Covered and Not Covered
FreeTaxUSA supports a wide range of tax situations, too, including home ownership, joint filing, dependents, and itemized deductions, to name a few. It also supports numerous income types including but not limited to:
- Self-employment (e.g., freelancers)
- Social security income
- Rental property
- Estates and trusts
- S Corps
- Alimony and child support
- Grants, scholarships and other forms of tuition support
- Tips from jobs
- Debt cancellation
- Jury duty
For this reason, FreeTaxUSA can be used by individuals, businesses and organizations, from the small-sized to the large-sized ones. With its solid reputation as a reliable tax preparation software, it continues to gain new customers and retain old clients – and you should be part of them, too!
But FreeTaxUSA isn’t an all-in-one or a one-size-fits-all software either. There are several tax situations that aren’t supported by the software including:
- Foreign income
- Farm rental
- Household employment taxes
- Installment sales
- At-risk limitations
- Prior year tax credit
- Tax for children with more than $2,000 in investment income
- Archer MSAs
Before using FreeTaxUSA, you should ask a customer service representative whether your tax situations will be covered by the software. If not, then you may have to consider other tax preparation software or services.
Benefits of Using FreeTaxUSA
The following benefits pertain to the use of FreeTaxUSA’s Deluxe version in preparing and filing your income tax returns electronically. The Free version, nonetheless, also comes with its own benefits, such as the fact that you can try out the basic services, determine its suitability in your case, and upgrading to the Deluxe version if it does.
- Both versions cover a wide range of complicated tax situations
With FreeTaxUSA, you can handle numerous tax situations on both the Free and Deluxe versions. With FreeTaxUSA’s competitors, you have to buy an upgraded version or a premium plan to handle several tax situations, such as rental real estate (Schedule E), self-employment (Schedule C), and capital gains transactions (Schedule D), as well as the K-1 related income sources. FreeTaxUSA, in contrast, handles all of these tax situations.
Furthermore, you will likely secure all the necessary tax forms necessary for your tax situation on the Free version; the tax forms don’t vary between the two versionos. Basically, you will enjoy extra support when upgrading to the Deluxe version but you don’t have to deal with the extra forms, a convenient feature that most of FreeTaxUSA’s competitors don’t offer.
Again, FreeTaxUSA will not cover some tax situations. But if you’re the average Joe type of taxpayer, then it will more than suffice for your needs.
- Guaranteed accuracy
FreeTaxUSA is always updated before each new tax season to ensure that, indeed, its forms and entries are in compliance with the current tax rules and regulations – and in the present climate, these rules and regulations seem to change so quickly that the average taxpayer can’t keep up. As previously mentioned, the team of tax specialists at TaxHawk keep up with the changes in the IRS landscape and, thus, provide a public service, of a sort, to the taxpaying public.
But what happens if the use of FreeTaxUSA resulted in interests and penalties imposed by the IRS due to its incorrect calculations? According to TaxHawk management, the company will pay these interests and penalties if and when these were due to its software’s calculation error.
- Free customer support
FreeTaxUSA comes with highly satisfactory, if limited, direct customer support. You have to remember that it’s an online tax preparation website and, as such, answers to your questions may not be as prompt as you wish them to be, unlike with a dedicated tax preparer at your beck and call, so to speak.
Nonetheless, FreeTaxUSA offers several customer service options that should be sufficient to address your concerns and answer your questions. These include the Customer Support page where you can search for support topics, the customer support email feature, and the chat feature, as well as the Q&A database; the last two are only available with the Deluxe Edition, free of charge.
- Audit assist
Emphasis must be made that the audit assist feature is only available with the Deluxe Edition, and most customers who have availed of it also highly recommend it. The feature provides customers with access to the audit specialists who are experts in aiding clients with preparation for an IRS audit, as well as access to the Audit Center, a database of information essential for an IRS audit.
But we must also point out that the Audit Assist feature has its limitations, too, although these are to be expected of a reasonably-priced tax preparation software. According to TaxHawk’s disclaimer on the website, the tool neither covers state returns nor provides customers with a dedicated representative who will directly communicate with the IRS.
Essentially, the FreeTaxUSA tax specialists will only provide assistance in crafting your responses, providing guidance on the type of information that should be gathered, and giving inputs on the IRS audit process. You have to do most, if not all, of the work yourself but you have to admit that getting expert guidance makes the job easier.
- Secure features
As an authorized IRS e-file provider, FreeTaxUSA is a secure tax preparation software with several security features. Information entered into the website is always encrypted before being transmitted via its safe SSL encryption. There are also several layers of security and privacy verifications through Norton, Truste, and SecurityMetrics, all of which are according to industry standards.
The information provided by customers are stored in safe and secure data centers while the tax returns are directly transmitted to the IRS for electronic filing. TaxHawk also doesn’t sell its customers’ information to third-party vendors and, thus, ensure that all information will be kept private and confidential.
- Online backup and account rollover
Both the Free and Deluxe Editions provide online backup for completed returns and both will automatically import your previous year’s information to the current year’s return, if FreeTaxUSA was used two years in a row. Many of the tax-related information from last year and from another software can also be imported into FreeTaxUSA; a PDF import tool, an easy-to-use feature, is now available.
- Budget-friendly prices
Yet another benefit of using FreeTaxUSA is that the prices are within your reach. The Free Edition is free but only to an extent – you will pay for certain functions like:
- $12.95 for state tax return preparation and filing (i.e., the fee is per state)
- $9.95 for an amended tax return
- $5.95 for priority customer support
- $5.95 for a professionally printed tax return
- $12.95 for a printed and bound tax return
The Deluxe Edition has a base price of $6.99 and it’s inclusive of the Free Edition’s services and many more. There’s also a charge of $12.95 per state return although the priority customer support, amended tax return, and audit assist features are already included in it.
But there are also extra charges for extra services with the Deluxe Edition, such as for the printed tax return and the printed-and-bound tax return. You may want to avail of these two extra services for presentation purposes, such as when borrowing from a bank, but you may skip them, too.
Tip: Get the Deluxe Edition since you will be getting more services for an affordable base fee.
- Easy-to-use interface
The FreeTaxUSA interface is relatively easy to use, if less fancy than its more sophisticated competitors’ websites. If you’re a beginner in online filing, you will find it an advantage. If you’re a veteran, you should set realistic expectations as the website doesn’t allow entering information ahead of the process – you cannot, for example, jump to the next section without first completing the current section although you can return to a previous completed section. It has its merits, such as not missing any section on your tax return.
In conclusion, FreeTaxUSA is a great tax preparation software for individuals and business owners, even those with complicated tax situations. Its price is definitely among the best in the industry, a benefit that many taxpayers are looking for.