Preparing and filing your taxes isn’t usually a pleasant experience — unless you’re expecting to receive a large tax refund. On top of paying a large portion of your income to the government, you’ll most likely have to pay tax preparation fees.
Two of the largest tax software programs, TaxAct and TurboTax, offer free federal and state returns. From the simplest returns to complex filings, both programs walk you through the tax preparation process. Here’s a comparison of TaxAct versus TurboTax to help you decide which free tax-filing service is best for you.
How to File Your Taxes Online Free
Doing your taxes with TaxAct or TurboTax is easy, and filing online is the fastest way to receive a tax refund. TaxAct and TurboTax both offer free tax preparation for filers with simple returns.
TaxAct Free is for individuals who make less than $100,000 a year and only need to file the most basic federal and state returns using Form 1040EZ or Form 1040A. Even though it’s free, you have access to your tax return online for seven years — and have free technical support, should you have any questions.
Tax return filers who are new to TaxAct will need to pay a $15 fee to import the prior year’s tax return. But TaxAct Free guarantees that you’ll receive the maximum refund available and that its software is 100 percent accurate.
Also, TaxAct offers all of its customers — free or paid — a price-lock guarantee. That means once you start filing your taxes with TaxAct, the price of the program you’re using won’t increase.
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TurboTax Absolute Zero
TurboTax Absolute Zero is a free program to file basic federal and state tax returns. To begin the process of filing taxes online, simply take a photo of your W-2 with a smartphone and upload it to the program.
This free program does have some restrictions; TurboTax Absolute Zero is unavailable to those who:
- Are homeowners
- Sold investments
- Made over $100,000
- Have major medical expenses
- Own a business
- Have additional income
TurboTax also guarantees all returns are 100 percent accurate and that you’ll receive the maximum refund possible. This is a limited-time free service, and you must file the return before the offer ends.
Which Tax Software Should You Choose?
TaxAct Free and TurboTax Absolute Zero offer similar free services for a simple and straightforward tax filing. The differences start to add up when complexities enter the equation.
TaxAct, which appears to be less expensive, offers multiple package options that build on TaxAct Free. Packages range from $27 for the Plus service — ideal for homeowners and customers who itemize — to the Premium package for filers who want the extra security with added audit protection. These prices do not include the extra $37 to file necessary state taxes.
TurboTax offers a variety of paid software that range from $39.99 for the Deluxe package — TurboTax’s most popular package — to the high-end TurboTax Live priced at $149.99, giving access to a certified public accountant who will answer questions and complete a final check prior to filing.
All in all, TaxAct and TurboTax offer similar services at comparable prices. If you file more complex returns but are still looking to save a few dollars without compromising security, TurboTax is the better tax program for you.