Less Taxing Taxes

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I have been a longtime user of TurboTax. This year, I finally switched to FreeTaxUSA,* owned by TaxHawk, Inc.

To test things out, I completed my federal and state returns using both sites. The results were identical. I filed my federal return free of charge using FreeTaxUSA. I then filed my state return using my state’s direct filing system.

(Because I completed the state return on FreeTaxUSA only to compare it with TurboTax’s results, I deleted it before filing the federal return. [This appeared to be the only way to avoid filing the state return.] It should be noted that the way I chose to file my state taxes—directly, using my state’s Department of Taxation site—is not to be confused with IRS Direct File. You can check your state’s site for more information on which options may be available to you.)

FreeTaxUSA does not have the same limitations as IRS Free File and some of the other free preparation and filing methods. For example, there is no income limit, and most tax situations are covered.**

They charge $14.99 for filing state taxes; other services, such as premium support, are also offered—but, unlike some providers, not aggressively pushed—for additional fees.

Compared to TurboTax, FreeTaxUSA seems similar, though smoother in most respects. The interface is closer to a list than a questionnaire; a self-guided tour, as it were. Online help is available as needed—not constantly in your way or slowing you down.

A few tasks were more difficult, but not overly so. For example, while TurboTax supports the import of a 1099-B form, FreeTaxUSA does not. Still, it is simple enough to enter everything, and it supports uploading of W-2, 1099, and the other usual forms. Importing tax data from TurboTax to FreeTaxUSA was also simple.

There are a number of other free tax preparation/filing services, but I am not familiar enough to vouch for any of them. I hope this article has given you some food for thought about your own approach to this annual task! You are welcome to add any questions or comments below.