E-filing? Try These 5 Free Options
I have updated this post for 2017 (2016 tax year). I’ve always used and recommended paid Turbotax & H&R Block electronic and software products to do my own taxes. Both have have free and cheap options available for those who have relatively simple returns and a low enough adjusted gross income. 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, here are the five options that topped my list if your goal is to have the cheapest e-file tax return.
Lets start with my two favorite: H&R Block and Turbotax.
H&R Block: offers a free-file edition. To use their free edition, your Adjusted Gross Income must be $64,000 or less AND one of the following: 1.) your age is between 17 and 50 OR 2.) you were active duty military OR 3.) you qualify for the Earned Income Tax Credit. The same criteria applies for free state return(s) for any state. If you start with the free version, you can easily transfer and upgrade to a different version at a later time if you do not qualify or you have a more complicated return. I have used H&R the last few years and really like their program. H&R Block offers free audit support and 1:1 help. H&R Block is offering 30% off their online editions (basic, deluxe, and premium) at that link.
Turbotax: offers a free e-file edition for those with and adjusted income of $33,000 or less ($64,000 or less for active military), or to those who are eligible for the Earned Income Tax Credit. If you choose to file a state e-file, the same criteria applies. If you choose to upgrade to another version, your data is transferred. Right now, Turbotax is offering significant discounts on higher level products as well.
TaxAct: offers a free-file for federal and state returns. Eligibility requires your adjusted gross income to be $52,000 or less AND one of the following:
- your age is 56 or under OR
- you are eligible for the Earned Income Tax Credit
- you were active military with an AGI under $64,000
FreeFile: there are a few options that the IRS gives for those looking for free e-filing, starting January 23, 2017. If your income is above $64,000, and you are up for some work and have plenty of time, you can fill out forms online through the IRS fillable forms website and then e-file 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 (and all the data that you’ve already entered does not transfer with you). For state returns, the IRS lists 12 approved e-file vendors to choose from, many of whom offer free e-filing on federal returns already. 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.
There are no IRS approved vendors that offer free-file to those with adjusted gross income over $64,000. If your income is higher and/or you invest, are a homeowner, or itemize deductions, I’d recommend going with the most appropriate paid Turbotax or H&R Block editions mentioned earlier.
- 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?