If you plan to file the new, streamlined 1040 tax form for fiscal year 2018 without any other forms — meaning you’re an average W-2 worker without alternate sources of income or deductions to itemize — you should know three things.
First, the 2019 filing deadline is Monday, April 15th. Second, even if you used to itemize deductions in years past, you may not need to bother with that this year because of changes to the tax code: The standard deduction has been nearly doubled, to $12,000 for single filers and $24,000 for married couples. And finally, you can file federal returns for zero dollars thanks to free editions from five of the best tax software companies in the business.
We recommend you start with TurboTax Free Edition because it’s the easiest to use, but any of our top picks can get the job done.
The 5 Best Free Online Tax Software Services for 2020
- TurboTax Free Edition
- H&R Block Free Edition
- eSmart Tax
- TaxAct Free Federal Edition
- TaxSlayer Free Federal Edition
There are a bunch of perks and features among the top five tax software companies, but when it comes to free e-filing, it’s a level playing field. Each one offers free filing for the new form 1040 (there’s no more 1040EZ or 1040A as of tax year 2018) and a few other common forms, and that’s pretty much it. Fortunately, that makes choosing one really simple: Go with the software that’s easiest to use.
So, to find the best free online tax software, we test-drove each top company’s free edition, evaluating customer support features and which ones made the filing process the least frustrating.
What Makes TurboTax the Best Free Online Tax Software?
The most important thing free online tax software should do is make you feel totally confident about your return — and that’s the main reason why Intuit’s TurboTax is our top pick. If you’re a regular W-2 worker, you can prepare your return without paying a dime and feel great about the process. TurboTax’s easy-to-understand, step-by-step instructions are unparalleled, even on the mobile app. In fact, it’s just as easy to e-file a 1040 from your smartphone or tablet (which 6 million people did last year, according to Intuit).
After taking a snapshot of your W-2, or importing it from TurboTax’s bevy of payroll partners, the software prompts you with key questions throughout the filing process to help hone in on any changes in your life that could make major waves in your taxes. There’s also a real-time audit risk detection and refund ticker, and users have access to free live advice via live chat and help from an expert. (If you get a paid edition, you can take advantage of SmartLook™, which allows you to schedule one-way video chats with live CPAs or enrolled agents.) These minor but helpful details all add up to make TurboTax the industry standard in free online tax software.
Thanks to the company’s Free Edition program, an estimated 50 million Americans filing a 1040 return without additional schedules qualify for free e-filing of their federal and state returns. Specifically, that’s anyone who:
- Has W-2 income and is taking the standard deduction
- Doesn’t have sizeable medical bills or student loan interest to deduct (or other itemized deductions)
- Doesn’t claim any rental, investment, business, unemployment, Social Security, or 1099-MISC income
If you don’t meet those criteria, you’ll wind up navigating multiple pricing tiers and add-ons, which is one of the downsides of TurboTax — its pricing structure is neither simple nor transparent. For more information about the best tax software for more complicated returns, check out our guide on paid editions.
The Rest of the Best Free Tax Preparation Software
H&R Block strives to make life easier for self-preparers by offering free support via phone, email, and most importantly, face-to-face consultations at any of the company’s 12,000 branch locations — even if you’re using its robust free tier.
H&R Block now allows you to file both federal and state returns for free. It’s also a great choice if you own your home or pay student loans, because Block’s free edition one-ups TurboTax by supporting more forms and deductions, like those for mortgage and student loan interest, the Saver’s Credit, unemployment or Social Security income, and the Child and Dependent Care Credit.
Customer support aside, we found TurboTax’s streamlined software slightly more valuable than having access to a personal agent — because if you’re using a free tax software option, you’re probably filing a pretty straightforward and simple 1040 form. However, if you own your home, pay child care or student loan interest, or have other itemized deductions, H&R Block will be the best free tax software for you. And if you’re attempting DIY tax prep for the first time, you might appreciate their customer support.
The free version of eSmart Tax lets you e-file basic federal returns for free, but filing a state return will cost $19.95 in most states. What it does offer is free tech support (via live chat) and free audit support from a Liberty Tax CPA — an added bonus you don’t get with most free tax software. You can also import your previous year’s tax return from a competitor like TurboTax or H&R Block for free, which can get you going as if you’ve been an eSmart customer for years. Otherwise, there’s not much to write home about, which is why eSmartTax is third on this list.
TaxAct is fourth on our list of the best free tax software because it’s more of a lightweight version of its competitors; it has free email support, tax guides, and resources to help you file along the way, but it’s not as robust as our top picks.
The biggest benefit to using TaxAct, however, has nothing to do with its free version. If it turns out that your tax return requires more than just a simple filing, TaxAct is the cheapest full-service tax software on the market: Its Self Employed+ edition (which covers all schedules and forms necessary for freelancers, investors, and the self-employed) costs $87 in total for state and federal. TurboTax’s comparable edition costs nearly twice that much ($140-$160).
Unfortunately, TaxAct no longer offers a free desktop version of its basic edition — but at $15, it’s still the cheapest tax software to download by far (H&R Block’s basic software costs $30; TurboTax, $40). So if you’d prefer to prepare your own taxes and store data locally, TaxAct is your cheapest option. The only catch is that state returns prepared on the desktop version cost $37. (That’s not a problem if you live in a state without income tax.)
TaxSlayer is a solid alternative to any of our top picks. Like the competition, TaxSlayer offers an easy-to-use deduction guide, step-by-step instructions, and free email and phone support, all while guaranteeing a maximum refund.
The free edition supports basic 1040 tax returns, just like the companies listed above it. What holds TaxSlayer back, however, is its lack of audit detection or assistance, which TurboTax includes.
If You’re Unsure, Start with a Free Version
I’ve stressed this a few times already, but it should be crystal clear that it’s almost always best to start with free tax software. If you’re a first-time tax filer, you’re likely in the dark when it comes to how complicated your taxes will be; perhaps you imagine a nightmare of numbers, forms, and frustration awaits. But the truth is, if you work a typical nine-to-five job, your tax return might be way simpler than you think — especially this year. The Tax Cuts and Jobs Act passed at the end of 2017 nearly doubled the standard deduction — to $12,000 for single filers and 24,000 for married couples filing jointly — rendering itemized deductions unnecessary for millions of taxpayers.
Like I said earlier, every reputable tax software offers a comprehensive free tier to get you started — and in many cases, that may be enough to get you through the tax season. However, if it’s not, the good tax software platforms, including TurboTax, allow you to simply upgrade to the level necessary to file your taxes without having to start all over again.
Tax season is already a stressful time of the year, and there’s no need to make it even more of a headache. If you only require a straightforward tax return, you may be able to save yourself some cash, time, and stress, and file those federal taxes for free.
Remember, State Tax Returns Aren’t Always Free
Unfortunately, even if you can get away with filing your federal taxes for free, those pesky state tax returns can sometimes be waiting to eat into your refund. Depending on the software you use, filing your state taxes can cost you up to $40.
But of course, if you’re one of the lucky ducks living in a state with no income tax, you won’t have to worry about filing a state tax return at all.
States that don’t have income tax:
- South Dakota
States that have limited state income tax:
- Tennessee (6 percent on income from interest and dividends)
- New Hampshire (5 percent on income from interest and dividends)
Tax season isn’t a joyous time of year, but it doesn’t have to be migraine-inducing, either. With the right free tax software, you can not only save time and a few bucks this April, but also discover which tax software works the best for you should you need a full, premium version.
In my research, I found TurboTax to be the unequivocal pinnacle of free tax software. Its intuitive design, audit detection, and step-by-step instructions are simply unmatched in the industry. It also allows you to easily upgrade beyond its free software if need be.
With better support for itemized deductions and face-to-face customer service available, H&R Block comes in a close second — and it may even be superior if you want to write off student loan interest or childcare costs or have other minor wrinkles in your tax situation.
However, it’s important for you to find the software that best fits your needs. There are many solid companies with great things to offer in their free tax software. No matter which free tax software you go with, it should be the one that gives you the least amount of stress and helps put the most cash back into your wallet.
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