Starting the second week of February, the IRS opens up for tax submissions, signaling it’s that exciting time again to dive into your tax paperwork! With the advent of technology, tax preparation software like TurboTax, H&R Block, and FreeTaxAct have become incredibly popular over the years. These tools significantly simplify the tax filing process, with FreeTaxAct being notably accessible for free to certain filers. However, is it the best option for your needs? Let’s find out!
How does FreeTaxUSA work?
Similar to other tax preparation software, FreeTaxUSA initiates the process by allowing you to import a PDF of your last year’s tax return or by gathering your personal details through an online form. However, it lacks additional file uploading options, meaning if you’re a freelancer with several 1099 forms, you will need to enter the data yourself.
The support features embedded within FreeTaxUSA are notable for their effectiveness – clickable question marks throughout offer clear, valuable information in small pop-up boxes without opening new tabs or windows. Additionally, a support link is available, offering support solutions relevant to the specific part of the tax return you are working on.
FreeTaxUSA’s services
All plans are completely free, but if you want the software to e-file the forms for you, there is an extra cost of $15 for each State return and a support add-on called Deluxe for $8 (gives you support line, live chat, and allows unlimited amended returns).
So, is FreeTaxUSA still the way to go? Let’s break it down!
Pros and Cons of using a FreeTaxUSA (non-Deluxe)
| PROS | CONS |
| User-friendly | Limited for Complex Situations |
| Affordable | Lacks of Human Interactions |
| Accessible Online | Potential Errors |
| Fill taxes out at your own pace | Data Security Concerns |
Best for People Who:
- Plan to DIY their taxes
- Have simplified return (Ex. Single with 1 W2 Form)
- Do not have many types of taxable income and assets
- Plan to claim Standard Deduction
- Are not self-employed
Might Not Be Right for You If:
- Plan to itemize deductions
- Have dependents
- Own a business
- Have a complex file or a significant life event affecting filing status and income such as ongoing divorce, disaster aftermath, inheritance,…
- Feeling anxious and confused when filing taxes
- Have multiple sources of income such as rental income, capital gains, etc…
What’s best for you?
In making a choice between using FreeTaxAct or retaining a CPA, it’s essential to consider the complexity of your tax situation and your specific needs. For simple tax situations, FreeTaxAct can offer an affordable and efficient solution.
Conversely, individuals and businesses dealing with complex financial transactions will be better off hiring a CPA due to their expertise and personalized advice, which you can find at KYKY. Our expert team of accountants have helped thousands of taxpayers in securely and accurately filing their returns. Alternatives like TurboTax or H&R Block are also good to consider.
