If your budget is tight, FreeTaxUSA should be one of your top contenders when you’re choosing a tax preparation service for tax year 2020. You can use it to file your federal taxes for free, and it supports all major IRS forms and schedules, with the exception of a handful of less common ones. It’s fast, easy to use, and provides more help than we would expect from a free product that covers so much ground.
The user experience it provides isn’t the most elegant among the services we tested, and the product lacks some features that competitors like last year’s Editors’ Choice winner, TurboTax Deluxe, offers, such as expert tax help and data import. While the site has, of course, been modified to incorporate changes to the tax code, it looks and works like it did for the 2019 tax year—which gives its rivals a leg up. But it’s a strong option for the budget-conscious taxpayer who wants easily accessible explanations of topics and comprehensive coverage. It’s an especially good bargain if you have to file as self-employed. Many taxpayers have taken on side gigs in this uncertain economy, and some of the tax preparation serivices charge hefty fees if you have to file a Schedule C.
As the name implies, FreeTaxUSA is totally free, unless you’re filing a state return ($12.95) or want the advanced support options in the Deluxe version ($6.99). The latter includes priority access to support agents, live chat, audit assistance (step-by-step instructions), and unlimited amended returns. Credit Karma Tax is also free, and it doesn’t charge extra for filing a state return, but it provides less in the way of support. By comparison, the traditional leaders in the field charge quite a bit more.
Regardless of price, all the services we reviewed for tax year 2020 work similarly—for the most part. They provide an alternative to manually entering numbers and other data in the tiny little boxes on the IRS Form 1040 and its supporting forms and schedules. Instead, they do the same thing tax professionals do when you sit in their offices. The site presents you with questions about your tax-related finances. Then it takes your answers, does all necessary calculations, and generates the finished product—your tax return, ready to approve and file.
All rely on step-by-step wizards that walk you through all the tax topics that apply to you—at least for some of their operations. The questions and statements on each screen are mostly written in plain language, and you only have to supply answers by checking boxes, making selections from lists, or entering data. Supplemental help is always available via email and sometimes via online chat or phone calls. When you come to the end of the process, these services make a careful pass through your return to look for errors and omissions, transfer the applicable data to any state return you must submit, and help you print or electronically file your approved return.
FreeTaxUSA begins with a good introductory screen that explains navigation tools and support options. There’s a quick, optional, one-screen tour that’s worth taking, though the site is well designed and intuitive even if you skip this.
FreeTaxUSA incorporates some of the best user interface conventions we’ve seen on tax preparation services over the years. However, some services, such as H&R Block Deluxe, have gotten rid of these features in favor of cleaner, less busy screens. This is not a criticism of FreeTaxUSA. In fact, it’s a compliment. Sometimes it’s worthwhile to offer users multiple paths to the same information and to display every available tool on every screen. This can cause confusion if you’re constantly crisscrossing the site, but a clear, understandable layout makes it easy to keep track of your progress.
A horizontal toolbar across the top divides the site into logical groupings that follow the path of the 1040: Personal, Income, Deductions/Credits, Misc(ellaneous), Summary, State, and Filing. Submenus under each display a comprehensive list of that section’s topics, with check marks next to those you’ve completed. Clicking on one takes you to the corresponding screen.
There are a few useful icons at the top of the page, which many services have removed. You can bookmark a page to remind yourself that you need to attend to something there before you complete your return. You can also open a comprehensive list of tax topics covered by the site and jump to one by clicking on it (if you’ve visited that area already). The third icon, which is unique to FreeTaxUSA, links to an audit-trail feature, which shows a history of all your actions on the site. Again, you can click on any of its entries to open the corresponding page.
The middle part of each screen is reserved for your interactive tax preparation content, and buttons at the bottom move you back one page or advance you to the next. The right vertical pane contains multiple help links; more on that later.
The first substantive thing you do on any tax service is to provide your personal details, such as name, address, Social Security number (unless you’re importing a PDF of your 2019 return from a competing product, which FreeTaxUSA and competitors like TaxSlayer allow), filing status, and dependents. If you filed for the previous year using FreeTaxUSA, your data will move over to this year’s version. Another early step that is offered by TaxAct and others is a Life Events feature, which tells you how situations like moving, getting married, and changing jobs might affect your tax return. FreeTaxUSA Deluxe lacks this.
There are two ways tax services solicit large blocks of information from you. Some, like Jackson Hewitt, break them into smaller pieces, so you may only need to complete one field per screen for a few steps. Others display so many questions on a page that you have to scroll quite a bit to get to everything. All the services do a combination of both at some points, and FreeTaxUSA is no exception.
two-factor authentication. If you sign in on an unrecognized device, you’ll have to answer the security questions you set up when you created your account. If you’ve forgotten them, you can use email or phone verification. The site offers a Remember Me option, but you should only check that box if there’s no chance anyone else can gain access to your computer.
I like the way FreeTaxUSA uses responsive design to make its tax preparation application accessible on a smartphone. You can get to it through your Android or iOS phone’s browser instead of using a separate mobile tax app that you have to install. Both versions work similarly.
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