- Straightforward, precise, mobile-friendly software
- Logical layout
- Wide variety of built-in support options
- Excellent account and data security
- Free federal returns
- Cheap upgrades and state returns
- Imperfect importing of competitors’ data
- Pay-only reviewing of returns
- Lackluster customer support
The tax prep software market is full of great solutions even if many of them are advertised as being free, a fact that taxpayers know has to be taken with a pinch of salt. In most cases, users can only make use of such tax preparation services by either only filing federal 1040EZs or by unlocking the forms they are looking for by upgrading to a paid higher-tier product. However, such hard choices have to be made with FreeTaxUSA, since the software can handle all tax forms and even allows taxpayers to file their federal tax returns without paying a single dime. But this unlimited and free nature isn’t the only reason to opt for this company. The unbeatable pricing policy is just the beginning, as FreeTaxUSA has also made sure that the tax prep process is as smooth as possible. It is a simple and logical program with an insane amount of built-in help tools and outstanding account security to boot.
Since FreeTaxUSA advertises itself as a free of charge service, we wouldn’t be surprised if you believed that FreeTaxUSA’s tax prep software is nothing more than a basic tool with many limitations. Thankfully, however, this couldn’t be further from the truth. As a matter of fact, it is a powerhouse of a program capable of storing previous years’ returns within the same account, equipped with many clever tools with which preparing tax returns can be made to be a completely hassle-free process.
For starters, not only are all forms organized into easily understandable categories but each topic previously visited is properly indicated by a green tick in the respective menu. As a nice addition to this, there is also the option to either bookmark forms that need further attention and revisit them later on, or simply pick a particular topic by clicking on it in the category drop-down menus. It is also possible to return to tax sections by clicking on the “History” tab, which lists modifications made within the account, making it the best option – due to the lack of a proper activity logger – for controlling data entry.
However, it’s the built-in help options where FreeTaxUSA can truly showcase just how much of a worthy adversary to any paid tax prep solution it is. This is proven by tools like the search bar that is directly connected to the company’s knowledge base, pop-up windows that list the most common questions and issues that may arise when tackling certain topics, and an entire support page where communication with FreeTaxUSA’s staff is made possible. But the most important features to emphasize – and that we would like to see adopted in other tax preparation solutions – are two particular tabs, one titled “Where Do I Enter?” and the other being “Deduction Dictionary”. While the former simply explains how to navigate within the program to enter the chosen form or information, the latter is a gigantic list containing all possible situations that could result in an even bigger refund.
Seeing how virtually all forms and attachments are covered by FreeTaxUSA, it’s certain that you’ll get accurate calculations and therefore more tax refunds in the end. Actually, there is an additional refund maximizer tool that goes through certain sections a second time, highlighting those questionnaires the results of which could indeed offer up more refunds. Speaking of questions, the interviewing process is extremely thorough – even knowing when to select standard or itemized deductions – plus the software always explains each step in the most straightforward manner possible. In fact, this thoroughness is not exclusive to federal taxes but, much to our surprise, is also present when being quizzed about state taxes, too. In addition to this, FreeTaxUSA will immediately alert users about any mistake the moment it is made. The software will always create an up-to-date, view-only PDF version of your federal tax return as well as some other forms, too.
Despite providing a rather pleasant tax prep experience, there are some serious issues with the software most notably with how it handles the importing of data. While copying data from federal taxes to state taxes is actually exemplary, importing a previous year’s return can easily result in complete failure if it’s scanned, incomplete, or wasn’t made by FreeTaxUSA, TaxAct, TurboTax, or H&R Block. But even if the previous year’s return is accepted, there is still a lot of manual data entry required. Foreign employment or statutory employee incomes aren’t even supported by the program at all, for some reason.
Filing and Extras
Although reviewing and filing are just as self-explanatory as anything else in the program, this is the area where FreeTaxUSA made one of its most questionable decisions, specifically because it forbids users from reviewing their returns before paying. While it is understandable that the company just wants to make sure that returns produced with FreeTaxUSA are also filed with the service, but assuming that taxpayers would just get away after checking their returns for errors and downloading them without paying is anything but customer-friendly.
Thankfully, this is the only thing that is bothersome since filing returns, tracking them, and adding extra services into the mix are quite straightforward. Speaking of which, there are four extras in total but actually only two additional services are worth mentioning: the refund payment option – which costs $19.99 – and the Deluxe upgrade. This upgrade includes priority customer support with an additional live chat option, allows for the amendment of returns for free, and also comes with a personal audit assistant who, upon examining the audited user’s federal return, will explain the audit notice and prepare the taxpayer for all the necessary tasks before, during, and after the IRS audit.
Mobile & Software
As expected from such a small company, FreeTaxUSA doesn’t provide mobile device support – at least in app format. However, there is no need to worry about not being able to manage tax returns on the go as the company’s online software works perfectly on mobile browsers as well. To make things even better, none of the functions are limited when switching from computer to smartphone or tablet, meaning that everything from forms and summaries to the help tools and the filing guide are fully accessible. In fact, just as is the case with the ‘proper’ version, the program automatically navigates to the section that was being filled out during the previous session. The only downside worth mentioning is that since this is not a mobile app there is nothing to prevent screen captures from being taken – unless you trust FreeTaxUSA’s overall account security or, better yet, use a VPN.
The overall security of FreeTaxUSA accounts is perhaps its weakest aspect since it only logs account activity – and not account access – and is incapable of checking the validity of SSNs. However, for a company that provides mostly free services, the level of data security available to users is a pleasant surprise. For starters, signing in from unauthorized devices is forbidden without first typing in a one-time verification code, an option that can be made to be permanent when activating two-factor authentication (2FA). Interestingly, 2FA isn’t needed at all since the account can be set up to always ask one of your security questions alongside the username and password every time a login attempt is made.
However, the default security settings of FreeTaxUSA are just as effective as well. The program automatically logs inactive users out after a while, not to mention that every time sensitive data is modified or returns are filed it immediately sends a message to the user’s primary email address that can even be forwarded to a secondary email address for added security.
For taxpayers that are looking for ways to cut corners when it comes to preparing tax returns, FreeTaxUSA is the solution of their dreams. Not only does the software have no limits to its functionality – forgoing bother like feature upgrades and such – but e-filing federal taxes is completely free of charge both for the most up-to-date return or for those that date back as far back as 2010. And while there are very few things that FreeTaxUSA asks money for, even the pay-only services have cost-friendly prices. As such, state returns only cost $12.95 per state, whereas upgrading to the Deluxe service is just $6.99. Having a high-quality print of returns costs an additional $6.99 or $12.99 if it’s ordered to be bound like a booklet.
Having an unlimited tax prep program and filing federal taxes without paying a dime is naturally one of the biggest advantages of FreeTaxUSA but, unfortunately, there are no other means of reducing the prices of any of its additional services. Granted, the company may send out temporary coupons to its clientele via email promotions from time to time but, as far as we know, those occasions are rather infrequent.
After seeing what a great assistance the built-in help tools of the software can provide, the customer support of FreeTaxUSA is a bit of a disappointment. Don’t get us wrong, the quality and availability of the live support is perfectly fine since both email enquires and live chats are answered in a prompt and courteous manner within a short period of time. However, lacking other means of communication methods – most notably phone support – suggests that the company would like users to rely on the other support options.
This wouldn’t be such a bad thing, but there aren’t too many other support options to choose from. The FAQ is basically the same as the one found within the program and unless it’s accessed via the “Help & Tips” tab it can easily be confused with a rather primitive search box. Also, it’s best to just forget about the company’s Facebook and Twitter pages, too; they are rarely updated and as such any questions asked there are likely to be left unanswered for a longer period of time.
FreeTaxUSA is a pleasant surprise in almost every single aspect. Not only does it keep its promise of providing its services mostly for free – which is already a huge asset in this market – but it also adds many clever features into the mix. Granted, FreeTaxUSA isn’t pitch perfect as proven by its questionable review process or the issues with importing returns created with competing services, but the advantages easily outweigh the problems. In fact, the company’s strengths are enough to take on any paid equivalent, particularly thanks to the built-in support options and the intelligent, straightforward, and thorough nature of the software, which ensure an exceptional service that could easily please any taxpayer. And if the software’s capabilities are combined with the outstanding pricing policy and strong security of user accounts, FreeTaxUSA definitely takes the cake with its value for money.
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