Cheap But Great Tax Software

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A few years ago, I got tired of spending $50+ every year on Turbotax.  It turns out that there are cheaper options that do the same thing, including FreeTaxUSA.  I’ve been using FreeTaxUSA for the last few years, and it works just as well as Turbotax, for far less money.

After dorking it up, I recommend:

FreeTaxUSA Logo 320x50

FreeTaxUSA Tax Software

  • Just as easy to use as other tax software.  It asks you questions in easy to understand language, you answer them and fill in your various tax info.  It has little help buttons you can click for additional explanations.
  • Gives the same results as other tax software (assuming you provide the same information!).  It correctly calculates your tax owed or to be refunded, based upon current tax law and how you answer the questions.  It can handle all the usual scenarios for most people:  home ownership, charitable donations, student loan interest, various tax credits for parents, investment income, rental income, etc.  
  • It’s cheap!  For federal taxes, it’s actually free.  This includes e-filing, and all the usual tax scenarios, without upgrading to the super deluxe homeowner investor edition.  They make money by charging $12.99 for your state return, and $6.99 for a deluxe edition that provides live chat and support, unlimited amendments, and audit assist.  I’d say most people don’t need the deluxe edition, but it might make you feel better if you are a worrier, or run into an issue.  
Comparison of FreeTaxUSA and Turbotax deductions screens. A bit different, but equivalent ways of doing the same thing.
(Left image edited to show $X,XXX instead of actual numbers.)

Keep reading to Dork It Up!

I used TurboTax every year for around 15 years.  It works fine.  It’s current (2020) advertised cost is between $40 and $90, depending on the edition you need.  But your state return is an extra $40!  So the real cost for most people is between $80 and $130. It’s sometimes cheaper if you get it on sale, or buy it at Costco.

Turbotax offers a “free” edition, but it’s not available for everyone. They say it’s for “simple” returns only, which means you can’t use it if you have itemized deductions, stock sales, business income, rental property income, or student loan interest deductions. The last one really irks me, as there are lots of people with huge student loans that would really benefit from the free version.  In the past, Turbotax has made it difficult to actually find the free version, trying to upsell you to the paid version the entire time.  See this good article from ProPublica.

Intuit (the company that sells TurboTax) is also kind of evil.  They lobby the federal and state governments to keep tax policy complicated and difficult, to maintain the market for their products.  California almost passed a law that would have made everyone’s state taxes free and easy to file, but the tax prep lobby defeated the effort.  There’s a great NPR Planet Money podcast on this, and a great written article from Priceonomics.  If you think about it, the government already knows how much tax you owe in many cases (from your W2’s, etc.), you shouldn’t have to fill out complicated forms and tell them.  Does Visa send you a blank form every month and ask you how much you owe them???  But I digress…

I’m picking on TurboTax, but many other tax software programs (H&R Block, Tax Act, etc.) have the same business model, cost about the same, and put similar limitations on their free version.

A few years ago I stumbled upon FreeTaxUSA, and haven’t looked back.

Functional Requirements (in order of importance, for me):

  1. Accurate – It needs to calculate the correct tax amount due or to be refunded.
  2. Easy to Use – It needs to just work.  It should help point out the deductions you should use, make it easy to find the ones you need, and skip the ones that are not applicable.
  3. Affordable – It shouldn’t cost $80 or more.


Inaccurately calculated taxes could cost you thousands of dollars, so priority #1 for tax software is to calculate your taxes due or refund accurately.  The first year I used FreeTaxUSA, I actually half completed my taxes with TurboTax also, to double check everything (they don’t charge until you need to click “file”).  Both software programs calculated the same refund.  Both programs handled my deductions the same, including child tax credits, child care costs, itemized deductions, charitable contributions, student loan interest, and even moving expenses.

I typically save a PDF of the completed final IRS tax forms generated by the software, and review the numbers on the forms to make sure everything makes sense.  I’ve caught problems in the past from this review (using TurboTax).  Problems were typically caused by my error or confusion on how to answer the questions.

My taxes are fairly simple.  I don’t have investments outside of my retirement accounts, I don’t own rental property.  However, even if I did, I wouldn’t hesitate to use FreeTaxUSA.

Easy to Use

Tax software should ask simply worded questions, and the user should be able to easily answer them.  That’s about it.  It’s also nice if the software segregates the topics that don’t apply to  most people, so you don’t have to answer 1000 questions about very unique and rare tax deductions that you don’t qualify for.  

In my experience, the questionnaires from TurboTax and FreeTaxUSA are equivalent.  They may use different wording, but both are reasonably clear.  Both provide some sort of help button to get a more detailed explanation of topics, and ways to jump around the questionnaire to find what you need.  After doing your taxes year after year, you generally know what things you will need to input into the software for your typical tax situation.

If you need more explanation of a tax topic, I’ve found the best source of info is the IRS themselves, as they typically explain things in a more complete, clear, and detailed way than any other source.  Just Google “IRS” and your topic.   For example, searching for “IRS Child Care Tax Credit” provides this helpful and complete source of info.

Comparison of help functions on FreeTaxUSA (left) and Turbotax (right). This is what the software shows after you click the “?” button next to the topic. The Turbotax info doesn’t include the income criteria, but would calculate eligibility automatically based on your income. I’d rather they tell me up front like FreeTaxUSA so I will know I qualify before I take the time to enter in the data. FreeTaxUSA doesn’t include as much info on qualified expenses, or the criteria of being at least a half-time student. Neither help functions are perfect or 100% complete, but both are fine for most people.


Why pay $80 if you can get the same thing for $13?  Done.


Stop spending $80 or more per year on tax software.  Try FreeTaxUSA.  It’s great!

Many of the links on this site are “affiliate” links.  If you use the links provided to purchase the recommended items, or to navigate to the web retailer site to purchase anything at all, I may receive a small commission.  These commissions will help me expand this site and provide you with additional recommendations. As an Amazon Associate I earn from qualifying purchases.  Thank you!


Another cheap (free!) alternative is Credit Karma Tax.  It is legitimately free for both federal and state returns, and covers most tax situations, with the biggest fairly common exception being they don’t support filing multiple state returns.  They make you sign up for a Credit Karma account so they can advertise credit offers to you, which is where they make their money.  I have not tried Credit Karma Tax, but it might be worth a shot.  Some reviews online say their help functions might not be great.  I’ll splurge and spend $13 to stick with FreeTaxUSA.

Dork It Up Yourself:

I’ve never tried it, but if you really want to do taxes the dorkiest way (without filling out forms by hand), there are a number of Excel based tax calculators available for free.  No interview questions, just put your info in the right spreadsheet boxes, and it will calculate everything you need.  These would be a good way to truly understand how your taxes are calculated.  Filing is by printing and mail, or a separate e-file service.

Here’s one example, updated every year since 1997:

If you like getting huge tax refunds, you shouldn’t.  A big refund means you just gave the government a big interest-free loan.  Modify your tax withholdings to better match your likely taxes owed using the IRS withholding calculator.  I still prefer a refund to a bill for taxes due, but I aim for a refund of less than $500.

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