During our tests of online tax software, we found that nearly every vendor offered a free version. But many came with restrictions or were light on features.
After conducting a thorough review, we again recommend TaxAct as the best free tax software for small business owners.
To understand how we chose TaxAct, you can look at our methodology and a list of online tax software vendors on our best picks page.
TaxAct's free edition is almost aggressively free. At every turn, the company doggedly explains how their service is free. As long as you're filing a simple federal return with no dependents, per the New 1040, their free e-filing option is an excellent choice.
Compared to last year (where we chose TaxAct as the best free online tax software), we reported that users had to pay an additional $10 to import the previous year's information from competitors like TurboTax and H&R Block. We were happy to see that this has changed, and you now have the option to import PDFs of 1040, 1040A and 1040EZ filings.
Sure, TaxAct's free online software is not as automated or user-friendly as its pricier competitors, but that doesn't mean filers are left in the dark. The company offers step-by-step guidance and free support.
Free versions are usually lacking in the features department. We chose TaxAct because even though it doesn't have all the nicer features of some other vendor's high-end offerings, it does provide a professional platform that's easy to use, accurate, and, importantly, free.
Even though TaxAct's free product doesn't come with all the add-ons that our other best picks offer, filers with simple tax returns can enjoy several features that help make the process easier. Here are just a few:
- E-filing: TaxAct supports e-filing and submits your forms directly to the IRS upon preparation. You can also check on your e-file status through TaxAct to ensure prompt delivery of your tax forms.
- Refund estimates: The software calculates your refund (or the amount you owe) in real time as you complete your forms, giving you a clear picture of what you can expect this year.
- Past returns: TaxAct provides all users with access to seven years of past tax returns information for free. Not only is this useful for personal records, but in the event of an audit, you have access to an archive with nearly a decade's worth of information.
- Free support: All plans under TaxAct get complete access to technical support, customer service and online assistance materials. These resources walk users through frequently asked questions or snags, and when a major problem with the software comes up, technical support is available to help even free filers.
- Free mobile app: TaxAct also includes access to a free mobile application for iOS and Android, although its functionality is limited compared to the desktop version of the software.
As far as pricing goes for TaxAct's free online tax software, the pricing for a federal filing is as advertised: free. But there is a cost of $19.95 for state filing. Also, you may need to upgrade to one of TaxAct's paid plans if your tax situation is complex.
Filers with dependents, college expenses and other needs can look at the company's Basic+ option. At $14.95, this option includes everything in the free version but also includes unlimited e-mail support from tax professionals. Services go all the way up to the Self-Employed+ tier, which costs $77.95 and comes with all the features of every other tier, as well as support for freelance income and year-round tax planning assistance.
Regardless of which service you choose, we found each plan's price to be competitive against its competitors' offerings.
TaxAct's customer service helped us understand this free tax filing product quickly and painlessly. We called the company posing as a small business owner looking for help and quickly received assistance. The representative we spoke with was upfront about the free version's limitations. Along with phone support, you can also reach company representatives via e-mail. Every version of TaxAct, including the free edition, comes with unlimited support.
During tax season (mid-January until April 15th), the company's customer support hours are 8 a.m. to 8 p.m. CT, Monday through Friday, 9 a.m. to 5 p.m. CT on Saturdays, and 10 a.m. to 5 p.m. CT on Sundays. During the off season, the company's customer service team keeps regular business hours: 8 a.m. to 5 p.m. CT, Monday through Friday.
All free online tax software comes with some limitations. Although we found TaxAct's free version to be better than most, it doesn't have the high-end features that you'll find in the best paid tax software, and it may not have some of the forms you need if your tax situations isn't basic. If you need to file certain forms with the IRS and TaxAct's free version doesn't support it, then you're going to have to look elsewhere or upgrade to a paid plan.
Also, as mentioned above, only the federal filing is free; you still have to pay to file state taxes, and it costs $19.95 for this service.
Already prepared to choose an online tax software application? Here's a breakdown of the rest of our coverage: