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Top 5 Options for Free Online Tax Preparation Software & Services

By Kira Botkin

tax timeWhile it certainly can be worth the money to hire a professional to prepare your taxes, you may be able to avoid paying any money at all if your personal finances aren’t too complicated. There’s no need to pay more than your fair share in taxes – and similarly, there’s no need to pay extra when preparing them.

There are many excellent tax preparation services available online, many of which charge very little, and others that charge nothing. Keep in mind that many services only file your federal taxes for free, requiring that you either complete your state forms using another method or pay a fee to have them filed along with the federal tax forms. Still, you can save a ton of money by doing taxes with the assistance of one of these programs.

Best Free Online Tax Prep Options

1. Free File

freefileFree File is a government-run service that provides referrals for no-cost federal tax preparation. The listings, provided by the IRS, display companies and services that meet the IRS’s standards for filing. In all, you can choose among 14 different tax preparation services to prepare your federal taxes for free if you meet certain income, age, or location qualifications.

To use Free File, you must have an adjusted gross income of $58,000 or less. Additionally, some companies may only offer their services to those with even lower incomes, in specific age ranges, or in specific states. You can use the Free File wizard to see which programs you qualify to use.

If you qualify for free service through Free File, you will receive the same quality treatment as those who are paying customers. However, most of the free services only cover basic tax returns – if you have a small business or otherwise need to file a more complicated return, you may be responsible for an additional fee. Participating companies include H&R Block, TurboTax, TaxACT, TaxSlayer, and more.

It’s important to note that 22 states (plus Washington, D.C.) also participate in Free File for state tax returns.  Check this list to see if your state is among them. If so, you can prepare and e-file your state taxes for free as well. However, you’ll probably need to reenter your information to file state taxes. Otherwise, you can choose to pay for state tax preparation through the service that gave you the free federal tax preparation, or do them by hand.

2. Free File Fillable PDF Forms

If you have simple taxes and some confidence – or if your annual income is more than $58,000 – you can fill out your own federal tax forms using Free File Fillable Forms. Anyone can use these forms without any income, age, or location qualifications whatsoever. These are provided by the IRS directly and are fillable PDF copies of the main tax forms. However, there is no assistance or prompts that tell you what to do with them – you’ll need to already know which ones you need to file and how to fill them out.

That said, most forms carry numbers from one line to another and perform addition and subtraction for you. Once you complete these forms, you can e-file your federal taxes for free. This is a great option if you have experience doing taxes and have previously completed your taxes yourself, or if you have a very simple return. There are no income, age, or state restrictions.

free file fillable forms

3. TaxACT

taxactTaxACT offers free online federal tax preparation and e-filing for everyone, regardless of age, income, or location. As a free user, you have access to many of the same benefits as a paid user, including a FAFSA worksheet to help you apply for your or your child’s college financial aid, live chat help from a TaxACT employee, or an option to receive your refund in savings bonds in increments of $50. (Refunds in the form of checks, direct deposit, or prepaid debit cards are also available.)

TaxACT can also import data from prior returns, even if they were prepared with other software. If you want to complete your return on a non-Internet enabled computer, you can buy a copy of the software on CD for $5.99 to cover shipping and handling, significantly less expensive than TurboTax or H&R Block’s CD versions. You can do your state taxes for $12.99 if you use the free federal edition, or for $17.99 you can upgrade to the Deluxe federal edition plus state.

TaxACT includes support for more than 160 IRS forms in the free version, including Schedule A and Schedule C. Compared to other free software, it’s extremely comprehensive, though the user experience can be a little more confusing and take longer than other programs. It is great for those who have more complicated taxes and are comfortable doing them in exchange for saving money.

See our TaxACT Review for more information.

4. H&R Block at Home

h&r blockYou can complete basic online tax prep through H&R Block at Home for free even if your income is above $58,000, and receive many of the same great benefits as a paid user. You get live tax help and can import your W-2 forms – and, in the case of an audit, you can also receive free help from tax professionals. The free online version includes e-filing at the federal level; however, state e-filing costs $36.99 per state. The free version also doesn’t include as much step-by-step instruction to maximize your refund as the paid versions.

You can use H&R Block’s free edition whether or not you meet the Free File qualifications, though you can also access it through the Free File website. If you have additional items beyond a couple of W-2 forms, you may be required to use the paid version. For instance, if you need to file a Schedule C for a small business, you’ll need to purchase H&R Block’s “Premium” version.

Participating H&R Block offices may also offer free in-person 1040EZ federal tax filing for those who have very simple taxes (no dependents, mortgage, or other deductions; income less than $100,000; filing as single or married filing jointly). However, it may cost an additional fee, dependent on the complexity of your return, to file state taxes in person.

If you didn’t use H&R Block last year, you can import your previous return from TurboTax or TaxACT PDFs. You can get your refund by check, direct deposit, or on a prepaid debit card. H&R Block At Home is a great option for those who have used H&R Block’s in-person service and are looking to save some money this year, since the program can easily load information from taxes filed at an H&R Block office. It also offers more guidance regarding tax changes incurred due to life events, and a great audit support program if you are audited by the IRS.

See our H&R Block at Home Review for more information.

5. TurboTax

turbotax logoThe free version of TurboTax covers basic tax situations, and offers the same error-checking, access to live chat, and guaranteed biggest refund as paid versions. If your taxes are complicated enough to warrant the use of a paid version, you can upgrade and your information will transfer over, allowing you to pick up right where you left off.

TurboTax offers a library of help documents for use on your current taxes, and can help answer questions one-on-one if you’re actually audited. Only your federal taxes and filing are included in the free edition – state tax filing costs an additional $36.99 per state. TurboTax also explicitly notes that the free version doesn’t include schedules C, D, E, or F, so you will be prompted to upgrade if you tell the program you need to file those items. TurboTax can import data from PDFs generated by TurboTax or TaxACT, and can import W-2 information directly from certain payroll providers. You can get your refund as a check, by direct deposit, or as an Amazon gift certificate to receive 5% to 10% extra as a bonus.

TurboTax has a simple and easy-to-follow user interface with lots of help files available and a clean, simple design. It’s a great choice for people who have never filed taxes on their own before, or who are nervous about doing so. TurboTax’s friendly step-by-step system asks you one question at a time, and its help section offers lots of answers to questions from real people.

See our TurboTax Review for more information.

Final Word

While these free and low-cost tax preparation options can be great for many people, others may benefit more from investing in the help of a professional. If you have a more complicated financial situation, own a business, or are not confident in your ability to prepare your own taxes, make a point to enlist the assistance of a certified tax preparer. Saving money on your tax preparation is not worth it if you commit an error and receive a smaller refund – or, even worse, end up being audited.

Have you tried any of these services in the past? Which online tax prep services do you suggest?

Kira Botkin
Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. She lives in Columbus, Ohio, where football is a distinct season, and by day runs a research study for people with multiple sclerosis. She hopes that the MoneyCrashers team can help you achieve your goals and live a great life.

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  • http://www.211info.org Matt Kinshella

    If you live in Oregon check out this useful blog about nonprofit free tax prep offerings from my organization 211info: http://211info.org/blog/all-you-wanted-know-about-free-tax-preparation

    If you don’t live in Oregon or SW Washington, you can dial 211 on your phone for free (it works the same way 911 does) and get connected with some great free tax prep resources.

    Thanks for this online overview Kira!

    • http://www.google.com/ lasdmalsm


  • James Guilford

    Free tax filing is all well and good, but what happens when one of these services gets hacked and all of your information is suddenly being sold to the wrong people?!?! Usually it’s several weeks before this gets reported to the media — time enough to make a mess of your life. Be careful out there.

  • Adam M

    @Guilford, if you are someone that is really afraid that an online application can be hacked, which is a possibility, then that person best option is to use the online form Just for preparation then to print and send in via snail-mail. Otherwise prepare the whole thing by hand…

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