E-filing? Here’s the 5 Cheapest E-File Options for 2024 (Some are Even Free)
This article has been updated to reflect the 5 cheapest e-file tax prep options for the 2024 tax filing season (for 2023 tax year returns). I’ve always used and recommended paid TurboTax & H&R Block online and (previously) CD software products for DIY e-filing tax returns. Both companies have have free or cheap e-file options available for those who have relatively simple tax returns, but neither participates in the IRS Free File Alliance for lower income taxpayers that fall with specified age and adjusted gross income ranges (below $79,000).
While TurboTax and H&R Block might be the best options for most e-filers, there are other reputable alternatives as well. After researching the marketplace, I’ve found the five options that top the list if your goal is to have the cheapest e-file tax return. I have affiliate partnerships with every major tax prep service & the links below lead to the best available discounts for their products.
Let’s start with my two favorites: H&R Block and TurboTax.
H&R Block: offers a basic free federal and state version called “H&R Block Free Online” that has no income or age restrictions, covering basic 1040 filings. If you start with the Free Online version, you can easily transfer and upgrade to a different version at a later time if you have additional forms in your return (note: your return must be started on their website to do so). I have used H&R Block the last few years and really like their program. H&R Block is offering 15%+ off their paid online versions for a limited time (Deluxe, Premium, & Self-Employed) at that link.
TurboTax: offers a basic free federal and state e-file version called “TurboTax Free Edition“, for simple form 1040 and limited credits only (~37% of taxpayers qualify). If you choose to upgrade to another version, your data is transferred if you start your return on the TurboTax website. TurboTax’s paid online versions can be found here (with best available pricing).
TaxAct: “TaxAct Free” offers a free-file for basic 1040 federal returns (note that adding a state filing costs $39.99 per state). You can upgrade to another version, if you start your return at taxact.com. If you have more than a basic return, you can get 20% off TaxAct’s paid versions here.
Cash App Taxes: Cash App Taxes, formerly “Credit Karma Tax” and now a division of Square/Block Inc. offers free federal and state e-file, with a few limitations.
U.S. Military & Direct IRS Free E-File Options:
We’ve covered the cheapest e-file options that are suitable for most taxpayers above, but there are some additional e-file options available to members of the military, lower income households, and those willing to put in some additional work:
- MilTax: members of the U.S. Military are eligible for the U.S. Department of Defense’s MilTax software, available through Military OneSource for no charge.
- Fillable Forms: If your income is above $79,000 (as well as below), and you are up for some work and have plenty of time, you can fill out forms online through the IRS Free File Fillable Forms website and then e-file directly with them. The big problem with this route is that you can’t prepare or submit your state return through the IRS. This is a big pain because you have to go elsewhere to do your state return – often at a cost – aside from a few of the options noted above. Additionally, all information you enter is purged every November, meaning that it does not carry over from one tax filing to the next year’s filing. Also, fillable forms are not nearly as simple to fill out as tax software. You literally are filling out IRS tax forms. I would not recommend it – but it is an option available to you for free e-filing.
- IRS Direct File: the IRS has launched a limited pilot tax prep service that is open to taxpayers in 12 states for basic returns. Unfortunately, Direct File doesn’t prepare state returns, so you would have to prepare a state return elsewhere (which kind of defeats the purpose).
- Free File: if your AGI is below $79,000 and your age falls within certain ranges, and you live within certain states, there are “Free File” e-file provider options, but none that I would recommend more than the previously mentioned free and paid online programs above, which don’t come with the income and age restrictions. Some of the offers require an income far below $79,000 (e.g. $44,000) and some of the programs do not permit you to switch to an upgraded paid version later on, if needed, which means you may have to start over and re-enter all of your tax information a 2nd time. As noted earlier, H&R Block and TurboTax are no longer participating in the Free File Alliance. IRS Free File opened on January 12, 2024 for the 2024 tax season.
Note: there are no IRS approved vendors that offer free-file through the Free File Alliance to those with adjusted gross income over $79,000 (and many have age, state, and other restrictions as well). If your income is higher and/or you invest, are a homeowner, a parent of a child, you claim major tax credits or deductions, you have self-employment income, or itemize deductions, I’d recommend going with the most appropriate paid TurboTax or H&R Block version. You may just end up with a free return, if your situation qualifies, anyways.
Cheapest E-Filing Options Discussion:
- What’s the cheapest way that you’ve been able to file your taxes, while getting the best return?
- Have you done your taxes yet?
- How are you filing your taxes this year?