Feb. 12, 2014 at 12:25 PM ET
After a full year of surrendering money to Uncle Sam, no taxpayer is eager to hand over more to an accountant or a big tax preparer. If you make less than $58,000 per year, you’re eligible to prepare and e-file your federal tax return for free through an Internal Revenue Service program called Free File. About 70 percent of taxpayers qualify, according to the so-called Free File Alliance of 14 participating companies. However, each company also has its own income, age and residency requirements within the IRS limit — some stricter than others. Overall the group claims to have saved taxpayers more than $1.2 billion over the past decade.
Below are four top picks from Cheapism.com that provide free federal tax prep and e-filing with minimal restrictions and charge less than $20 for state returns. In more than 20 states with Free File, the state return may cost nothing. These companies also hawk free editions without any income or age requirements, but they come with “value-added offers” for paid software and features. The more complicated the tax situation, the more likely a required upgrade.
TaxAct offers its Free File service to taxpayers ages 18 to 57 with adjusted gross income up to $52,000. Residents of most Free File states qualify for free state returns, as well. Otherwise, the company charges $14.99 for state filing. The Free Edition with no age or income restrictions can also take the form of a CD or download for Windows, which appeals to users with privacy concerns who don’t want to submit information through a website. Help comes in the form of video tutorials and email access to tax pros.
H&R Block sets an age limit of 52 for its Free File edition, which is open to taxpayers who make up to $58,000. The company also participates in the State Free File Program and prices other state returns at $14.99. Consumers who don’t fit the profile, however, must turn to the regular H&R Block Free Edition and pony up $27.99 for state returns — far more than other free programs require. An expert who recommends this free software points to the peace of mind some users derive from a bricks-and-mortar brand.
FreeTaxUSA excludes residents of states without income tax but otherwise has generous Free File parameters. It caters to taxpayers ages 17 to 75 who have income of $58,000 or less. With both the Free File program available through the IRS site and the free edition available through the company’s commercial site, state returns cost $12.95. The free software is basic but accommodates a range of circumstances — self-employment, homeownership, dependents — that other companies deal with only through their paid offerings. Some users prefer the straightforward approach to a bunch of bells and whistles.
ESmart Tax confines its Free File program to ages 18 to 54, along with adjusted gross income up to $58,000. With this offer or the free Basic Edition, the charge for a state return is $19.95. Audit support comes standard and eSmart has the backing of Liberty Tax Service, a large company with retail locations. Online it sports a redesigned interface. One early expert review describes the site as a clean, modern upgrade from last year’s dated look.
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