Due to the COVID-19 pandemic, tax filings and payments for individuals were extended to May 17, 2021 by the IRS. But that day is quickly approaching, and tax preparation takes time and careful attention. Understanding the tools available to you is important, too.
Using a tax preparation service or a professional tax preparer is great if you can afford it. But many people are unaware that there are free tax software options available.
No matter how you file taxes, there is free tax software on the market that can help you get it done quickly and efficiently. Here is a look at some of the free tax software options that could help you during tax season.
It may seem odd at first to list Credit Karma as one of the best free tax software since most folks associate them with free credit scores. But it is true: Credit Karma offers a free, online tax preparation program. To start, you must sign up for a Credit Karma account.
This program caters to tax filers who value simplicity and want to stick to the basics. However, it is important to understand that Credit Karma only supports the most common forms and schedules for both federal and state returns (which will cover most tax filers). Here are just a few common forms and schedules they support:
- W-2 wages and tax statements
- 1040 U.S. individual income tax return
- 1098-E & 1098-T (Student loan interest statements and tuition statements)
- 1099-INT & MISC (Interest income and miscellaneous income)
- Schedule 1,2,3
- Schedule A – Itemized deductions
- Schedule SE – Self-employment tax
There are certain federal and state forms and situations that Credit Karma cannot support and it is important to be aware of in case any of them apply to your situation. Some examples include: Earned Income Credit with Non-Dependents, Form 2555 – Foreign Earned Income, and clergy member tax filings.
Credit Karma advantages
- Simple to use interface: Simplicity is what many people want, especially when it comes to filing taxes. Credit Karma’s filing process is simple, with easy-to-follow prompts. It will guide you along by asking you a few questions about your tax situation.
- Easy access: Credit Karma offers users both web and mobile versions. Smart File makes the filing process simple too. Users can take a photo of their W-2 and then upload it to the web.
- Audit defense: Credit Karma’s goal is accuracy and max refund for tax filers. Audit defense ensures the numbers are checked thoroughly. However, if calculations mistakes are made, Credit Karma will reimburse up to $1,000 if the IRS penalizes you due to an error on their part.
TaxSlayer is not new to the tax filing game. Their paid versions are a top-notch option for tax filers with both simple and complex tax situations. But, if you are a simple tax filer, TaxSlayer’s free edition, TaxSlayer Simply Free, will work just as well as the paid version.
TaxSlayer Simply Free allows users to file federal income tax and state tax returns for free. However, the service is only offered to those with the simplest tax returns, such as W-2 income filers. If your tax situation meets the following the free service could be for you:
- You earn less than $100,000 in taxable income
- Have no dependents to claim
- File as Single or Married Filing Jointly
- Claim the standard deduction
- Can claim education credits
- Can deduct your student loan interest
Tax situations not covered would include:
- Earned Income Tax Credit
- Schedule A (itemized deductions)
- Schedule C (Self-employed) to name a few
- And more
TaxSlayer Simply Free advantages
- Simple e-filing: TaxSlayer Simply Free allows users to prepare and e-file basic 1040 returns with ease with guaranteed accuracy using a step-by-step instruction guide.
- Prior returns and support: TaxSlayer will import the data from a previous year’s tax return for free, even if it was with another tax preparation service — saving you time. They also offer unlimited email and phone support for users.
- Education expenses: You can claim education credits and even deduct student loan interest, helping you maximize your return.
H&R Block has been a trusted brand in tax preparation service for a long time and its free tax filing option is a popular choice among simple tax filers and first-time tax filers. The H&R Block help center is available to guide those through the process.
H&R Block offers free federal income tax and state tax returns and supports many of the common forms and schedules, such as Form 1040, Form 1098-T (tuition payment), and even Schedule EIC – Earned Income Credit. The free service is open to those in the following situations:
- Multiple W-2s
- Unemployment income
- S.S income (social security)
- Student Loan Interest (Form 1098-E)
- Those claiming children as dependents
Those who contribute to health savings accounts (HSAs), have itemized deductions, or are Schedule C (Self-employed) are not eligible for the free service and must upgrade to a paid tier of service.
H&R Block Free Online advantages
- Simple importing: Importing information and data is easy with the online version. Take a picture of your W-2 and upload it. Importing last year’s taxes is just as easy. You can use the mobile app to ensure those tasks get completed.
- Multiple income types: Those with retirement contributions, retirement income, and interest incomes are also qualified for the free service.
- Education deductions: H&R Block Free Online allows you to deduct student payments, tuition, and loan interest without having to upgrade to a paid tier.
TurboTax is one of the top services for tax filing. Its free service brings the same expertise that has built a reputation in the industry. Those with W-2s and other simple tax returns will enjoy all it has to offer.
Free federal income tax and state tax returns are available and TurboTax Free Edition supports many of the important, commonly filed forms and schedules:
- US individual income tax return (1040)
- Unemployment income (1099-G)
- Schedule EIC (Earned income credit)
- Form 1099-INT (Interest income)
- Form 1040-V payment vouchers
Certain forms and schedules associated with more complicated returns, such as Schedule SE (Self-employed), Schedule D (Capital gains and losses), and educational forms, such as 1098-E and T (Student loan interest and tuition statement) require a paid tier.
TurboTax Free Edition advantages
- Maximize refund: If you get a larger refund using a different service, TurboTax Free Edition users are entitled to a payment of $30. If IRS penalties should arise from calculation errors, TurboTax will pay the penalty and interest. You will be shown if you qualify for additional credits, to help get you a larger return.
- Teaching tools: You will see your updated tax refund in real-time as you work through the process, and personalized insights will explain why you are receiving certain credits, helping you better understand your taxes.
- Support and security: TurboTax Free Edition offers some of the most robust customer service of all the free tax software programs available, and it’s one of the most secure cloud services.
How do you file taxes?
There are really only three options when it comes to filing taxes:
- Manual filing: Manual tax filing is cut and dry. It is done by completing the IRS’s Form 1040, known as the Individual Tax Return form. Once it is completed, it is mailed to the IRS.
- Using a tax preparation service: There are numerous tax preparation services to aid you in your quest during tax season. Some opt for professional services to help them wade through the sea of forms and tax jargon — tax credits and deductions.
- Using tax software programs: Tax software programs are a popular option as well. Many online programs are offered to help walk people through the process of filing their taxes electronically. Of course, many of these software programs come with a cost.
Can you file with the IRS for free?
The IRS offers free filing depending on your income amount. Incomes below $72,000 are eligible for free federal tax filing with an IRS partner site.
How to prepare for tax season
Numerous tax preparation services and professional tax preparers stand ready to help during this tax season. Of course, these services often come with a fee depending on the tax situation. Complicated tax filers dealing with less common forms and schedules will benefit the most from professional services.
The new tax filing extension deadline is quickly approaching. For those with common, less complicated tax filings, such as W-2 employees, the process can be more simple and even free. Many of the top-tier tax preparation services offer free editions for simple tax filers who qualify, bringing their expertise at no cost to you.