Best free tax filing software for 2017

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It’s tax season again! Before you get started, we have compiled a listing of the best free online tax filing software for 2017, to help you save time and money. In our opinion the best tax software is user-friendly and educates the user so by the time you file your taxes, you feel very confident in your tax return and are aware of your risk of audit. Other features that are also an important consideration include accuracy, maximum refund guarantee, audit risk detection and defense, and support.

For the 2016 tax year, the first day the IRS will accept your e-filed taxes is January 23, 2017. And the tax filing deadline to for your 2016 taxes is April 18, 2017.

We recommend filing your taxes early to reduce the risk of tax related identity theft which has been on the rise, especially with all the computer breaches and data hacks that have been happening. Plus, filing early also means you get your refund much earlier.

If you have never filed your own taxes before, don’t let that deter you. Tax software programs like TurboTax and H&R Block make it easy for anyone to do. They are simple to use and walk you through every scenario. Doing your taxes yourself can save you about $250 or more in tax preparations fees charged by a tax specialist or accountant.

 

Best Free Online Tax Software Services for 2017

 

Tax software Free Federal Free State Ease of Use Free Support Audit Assist Audit Defense
TurboTax  1040EZ/A          
H&R Block 1040EZ/A/SCH A  
eSmartTax 1040EZ/A          
FreeTaxUSA 1040EZ/A          
TaxAct  1040EZ/A          

 

 

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TurboTax is one of the most trusted and depended upon tax softwares out there for do it yourselfers. While they do cost more than the other tax softwares available on the market, the ease of use and support that comes with it definitely makes it worth the price tag. But here’s the best part! Since 2015, TurboTax has been offering a free version of their online Federal AND State filing software, unlike many others that only offer free federal filing. The free version is for those that need to file a 1040EZ or 1040A.

 

  • Support
    • Best support features available on the market including real-time online chat with a CPA (paid versions only), video tutorials and forums.
  • Features
    • Can be accessed on a variety of devices including computer, phone and tablet.
    • W2 information can be imported by simply taking a picture.
    • Easy import
    • Maximum Refund Guarantee
    • New for 2017, if you have to file TurboTax Self-Employed which is their Home and Business version, then look out for the brand new tool called Expense finder. This tool when connected to your bank account and credit card keeps track of every transaction that may qualify as a business expense so you can maximize your deductions.
  • Bonus
    • Free one year subscription to Intuit QuickBooks (accounting software for small business)
    • TurboTax also has a tool called TurboTax It’s Deductible, to help you keep track of charitable donations and turn them into big tax deductions. Just remember to ask for that tax receipt when you drop off your items at a charitable organization.
  • Audit Support and Defense
    • Comes with free audit support. If you do receive an audit notice from the IRS, TurboTax Audit Support Guarantee will help you get one-on-one guidance from a tax professional about what to expect and how to prepare for an audit.
    • While you are filing your taxes, if the software lets you know that your risk of being audited is high, then you are given the option to purchase TurboTax’s audit defense ‘Max Assist and Defend’ for $44.99. This product cannot be purchased after you file. This gives you full representation before the IRS by a tax professional in the event of an audit.
  • Refund Options
    • Direct deposit to bank account, loaded onto a NetSpend Premier Visa premier Visa prepaid debit card, paper check, applying the refund to next year’s taxes or directing the IRS to purchase US Savings Bonds with your refund.

 

 

Cost: $0 – $151.98, without any promotions and depending on the package you need.

 

Here is a current federal filing pricing chart of the different tiers at TurboTax. State filing is an additional $36.99. However, the pricing will keep changing throughout tax season based on different promotions.

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H&R Block is another very trusted name when it comes to tax preparation. With over 11,000 locations within the US, this makes it very easy to have a one-on-one chat with a tax specialist. Plus H&R Block also allows you free, in-person audit support. This year H&R Block is also offering free federal and state filing as well as to itemize. So if you are filing 1040EZ, 1040A and 1040 SCH A, you can save some money in comparison to TurboTax.

 

    • Support
      • In-person help at one of their many locations if you get stuck while trying to file it yourself.
        The paid versions also give you unlimited expert tax advice via chat.
    • Features
      • W2 information can be imported by simply taking a picture.
      • Easy import of last years taxes if you used another software provider.
      • Maximum Refund Guarantee
    • Audit Support and Defense
      • H&R Block also provides free audit support. In the event that you receive an IRS audit notice, you can contact H&R Block for advice on what to expect and how to prepare.
      • If you opt-in for the audit defense package “Worry-Free Audit Support”, then you get expert advice from a tax professional, in-person audit representation and assistance with any IRS correspondence. This package costs an extra $19.99.
    • Refund Options
      • Direct deposit, paper check, loaded onto a prepaid H&R Block Emerald Prepaid Mastercard.

 

Cost: $0 – $116.98, without any promotions and depending on the package you need.

 

Here is a current federal filing pricing chart of the different tiers at H&R Block. State filing is an additional $36.99. However, the pricing will keep changing throughout tax season based on different promotions.

 

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If you need to file a 1040 with itemized deductions (SCH A), then you should opt for H&R Block as they offer a free verison.

 

Here is a current pricing list of the free version of H&R Block compared to TurboTax and TaxAct.

 

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  • Support
    • In-person help at one of their 4000+locations.
    • Live customer support and tax advice via chat or phone.
  • Features
    • Easy import of W2 directly from your employer.
    • Easy import of last years taxes if you used another software provider.
    • Maximum Refund Guarantee
    • With the eSmart Bundle, you get Enhanced Audit Assistance, Printed Bound Copies of your tax return, and online storage of the past five years of your tax returns.
  • Audit Support and Defense
    • eSmartTax provides free audit assistance. In the event that you receive an IRS audit notice, eSmartTax will help you understand what the IRS and state is looking for in their audit.
    • eSmartTax does not provide legal representation with the IRS unlike H&R Block and TurboTax. However, for an extra $14.95, you can purchase their ‘Enhanced Audit Assistance’ which comes with recommended ways to prepare for the IRS audit, assistance with IRS correspondence and possible next steps after the IRS audit.
  • Refund Options – Direct deposit, paper check.

 

Cost: $0 – $64.90, without any promotions and depending on the package you need.


Here is a current federal filing pricing chart of the different tiers at eSmartTax. State filing is an additional $29.95. However, the pricing may change during tax season based on different promotions.

 

 

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FreeTaxUSA has been around since 2001 and is owned by Tax Hawk Inc. They are also an original member of the IRS Free File Alliance and an authorized e-File provider.

While FreeTaxUSA used to be free in the past, they now charge for State returns.

 

  • Support
    • E-mail support and FreeTaxUSAs account message center.
    • Live customer support and tax advice via chat with deluxe version (additional $6.99).
  • Features
    • Easy import of last years taxes if you used TurboTax, H&R Block, or TaxAct.
    • Maximum Refund Guarantee.
    • Lets you file taxes for the prior 7 years at no cost. All other tax software forces you to purchase prior year tax preparation software.
    • Unlimited amended returns (with deluxe version) so you can correct any mistakes or omissions in your tax return even after you have filed with the IRS.
    • Can file advanced and simple federal taxes for free. However, keep in mind that there are tax forms not supported with FreeTaxUSA.
  • Audit Support and Defense
    • Purchase the deluxe version for audit assistance. In the event that you receive an IRS audit notice, eSmartTax will help you understand what the IRS and state is looking for in their audit.
  • Refund Options
    • Direct deposit, paper check.

 

Cost: $0 – $19.94, without any promotions and depending on the package you need.

 

All federal filing is free at FreeTaxUSA. State filing is an additional $12.95. However, the pricing may change during tax season based on different promotions. You can add the deluxe version for an additional $6.99.

 

 

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TaxAct has been around since 1998. They are also IRS and State approved and one of the more affordable options on the market.

 

  • Support
    • E-mail support and phone support.
    • Online database of most common tax situation issues.
  • Features
    • Import prior year tax return for free if using a paid version. If using a free version, then importing your prior year tax return will cost an additional $5.
    • Maximum Refund Guarantee.
    • Price lock guarantee – pay the price listed at the time you begin your return, not when you file as with other online software providers.
    • Personalized financial assistance – This is a complimentary report to provide you with tips to reduce your tax bill and plan for your financial future.
  • Audit Support and Defense
    • Audit support information is present on their website.
    • No Audit defense option, which means they do not offer legal IRS representation or any assistance with IRS correspondence.
  • Refund Options
    • Direct deposit, paper check.

 

Cost: $0 – $55, without any promotions and depending on the package you need. All federal filing is free at TaxAct. State filing is an additional $25.

If you need to upgrade to a paid version, you can save 15% with this coupon.

 

 

 

Tax Tips for international students and non-resident aliens

If you are an international student or other non-resident alien who has not been in the US for five years or more, then you cannot claim tax residency on your federal taxes. This means that you cannot e-file and you cannot use the free online tax software services as they do not support the 1040NR or 1040NR-EZ tax forms. In this case, you can use Sprintax or Glaciertax.

If you have been in the US for five years or more, you can now claim tax residency on your federal tax form. This entitles you to more benefits than filing as a non-resident. In addition, this also entitles you e-file and use any of the free tax software services to files your taxes.

How to save money on tax preparation fees

  • Get Ebates if you end up having to pay for the State filing or if you have to upgrade to a deluxe version. Ebates gives you cash back on over 500 stores and businesses. So you can save an additional 2-25% of the tax fees you pay.
  • Use a credit card that gives you cash back. The Citi double cash back credit card gives you an additional 2% cash back on anything you spend. Other cash back credit cards can range from 1%-1.5%.

 

Take home message

For the easiest, most worry free option choose TurboTax which supports the widest range of tax forms and deductions. However, TurboTax comes with heftier price tag. But if you are only filing a 1040EZ or 1040A, then your best option is to use TurboTax.

H&R Block is a nice alternative to TurboTax that is still very user-friendly and a cheaper option. 1040EZ and 1040A are also free with H&R Block, but If you need to file a 1040 SCH A (for itemized deductions), then H&R Block can save you an additional $72 in comparison to TurboTax.

eSmartTax is the next cheapest alternative which supports the most common tax situations and still gives you decent amount of support for the price.

FreeTaxUSA and TaxAct are the cheapest options available. However, I recommend these for those who have fairly common tax situations and know a little bit about filing their taxes.

While tax season can be very stressful, choosing the right software can put your mind at ease and make filing your taxes very easy. Plus if you have to upgrade to a paid version or pay for the state filing, remember those fees are tax deductible next year.

 

 

Do you have any suggestions/comments for online tax filing software?

 

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