TurboTax and FreeTaxUSA are online tax preparation services that can be used by individuals and businesses. TurboTax is more full-featured and has lots of built-in guidance, as well as helpful support delivered by phone or chat. However, it’s significantly more expensive. FreeTaxUSA charges nothing to file federal tax returns but it doesn’t provide users with support by phone or chat and also charges fees for filing state returns. If you need help at tax time, a financial advisor may be able to assist you with tax return preparation.
TurboTax Basics
TurboTax is one of the most popular tax return services and filers can choose from a variety of plans to meet their needs. The user interface is well-designed and the company provides lots of tools and guides as well as extensive customer support. If that’s not enough, you can also get help from a live tax expert.
TurboTax offers three filing options: Do-It-Yourself, Live Assisted and Live Full Service. Here’s how much each costs:
- The Do-It-Yourself option, which is geared toward filers with simple tax situations, costs anywhere from $0 to $89 for federal tax returns, depending on complexity. State returns can be free or up to $39 per return.
- The Live Assisted service lets users get questions answered by a tax expert. It costs between $0 and $169 for federal returns and between $0 and $39 for state returns.
- Live Full Service will do your return for you and costs $169 to $359 for federal returns and $0 to $39 for state returns.
The cost for state returns is based on a sliding scale that varies based on the state return’s complexity. If you are self-employed or own a business, claim a lot of credits or require more than the usual number of tax forms, for instance, you’ll pay more for state returns when you use TurboTax
TurboTax is one of the more expensive tax return services, but it provides some guarantees that may make it worthwhile. For example, the company guarantees you won’t get a bigger refund anywhere else. It backs that up with an offer to refund everything you paid to use the service if another return preparer gets you a larger refund. Its accuracy guarantee includes a promise to pay any penalty and interest resulting from an error.
FreeTaxUSA Basics
FreeTaxUSA is among the least expensive tools to help you file your taxes. It handles federal and state tax returns and offers features such as automatic transfer of information if you used the program for the previous year’s return. You can even scan a PDF of a previous return to get your data into the program.
FreeTaxUSA has four filing options: Basic, Advanced, Premium and Self-Employed. All options are free to use for federal tax returns, but FreeTaxUSA charges a flat $14.99 for state returns.
- Basic is for less complicated returns but includes all major tax forms.
- Advanced is for homeowners and others with more than the usual number of credits and deductions, as well as anyone with earned income credits.
- Deluxe caters to investors, those with rental income and people who sold their home in the previous year.
- Self-employed is for small business owners, contractors and freelancers.
Audit assistance comes with the Deluxe filing level. For $7.99, there is a Deluxe Add-on that can file amended returns and provide additional support, including audit assistance.
Side-by-Side Comparison
Here’s a side-by-side comparison of TurboTax and FreeTaxUSA:
| Feature | TurboTax | FreeTaxUSA |
| Federal Tax Return Cost | Email-only | Free |
| State Tax Filing Cost | $0 to $39 | $14.99 |
| Support | Phone, chat online user group | Email only |
| Guarantees | Accuracy, maximum refund | Accuracy |
| Audit assistance | Included in all filing levels | Included in the Deluxe level or for a $7.99 fee |
| User interface | Includes lots of guidance but more complex | Simple, basic and unadorned |
Bottom Line
TurboTax and FreeTaxUSA can handle tax return preparation for most taxpayers. FreeTaxUSA charges nothing to file federal returns and only $14.99 per state return but offers only limited user support and guides. TurboTax will file simple federal returns free of charge and provide robust information and support, but more complex returns and levels of support can cost up to $359, plus sliding fees of up to $39 per state tax return.
Tax Filing Tips
- If you have questions about your tax situation, a financial advisor with tax expertise can help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- SmartAsset’s Federal Income Tax Calculator can provide important information for your financial plan by estimating how much you will owe in income taxes this year. You can get a basic idea of your future tax obligation as well as your take-home pay by entering your location, income and filing status. The more advanced estimator accounts for 401(k) and IRA contributions, itemized deductions and personal exemptions.
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