Tax season is upon us, which means millions of Americans will once again flock to TurboTax to file, and doing so will come at a cost to many.
In 2021, TurboTax parent company Intuit withdrew its tax preparation software from the IRS Free File program, a partnership between the government and various tax filing services that gives eligible taxpayers the ability to prepare and file their own federal tax returns at no cost. At the time, Intuit cited limitations and “conflicting requests from parties outside the program” that led it to withdraw from IRS Free File.
The announcement came after a 2019 ProPublica investigation that found Intuit coded its Free Files page so it was hidden from Google search results. And as part of a 2022 legal settlement, Intuit agreed to send $141 million in refunds to customers who said they were tricked into paying in past years.
Since then, federal authorities have taken additional steps to address Intuit’s “deceptive” advertising practices. The Federal Trade Commission ruled in January that the company can no longer misrepresent its products and services or market them as free unless they cost $0 to each consumer.
While TurboTax, Money’s top choice and partner for the best tax software, is no longer part of IRS Free File, it still offers some taxpayers ways to file their taxes for free. You may also be able to pay your taxes for free through another service, including the IRS’s new pilot program (more on that in a minute).
Can I file my taxes for free with TurboTax?
TurboTax offers two ways to file your cases for free: TurboTax Free Edition and TurboTax Live Assisted Basic, the latter of which comes with a tax expert to help you virtually.
However, according to TurboTax, these “free” options aren’t free for everyone: only 37% of taxpayers will qualify for the free edition. First, you need to have a simple tax return, which means you’re only filing IRS Form 1040. TurboTax’s free service covers W-2 income, interest and dividends that don’t require filing a Schedule B, standard deduction, income from work tax credit, child tax credit, and student loan interest deduction.
You will not be able to apply for TurboTax Free Edition if you have itemized deductions, unemployment income, business income, stock sales, rental property income, or income reported on other forms, such as income from cryptocurrency investments.
TurboTax Free Edition is available year-round, but if you want free help from a tax expert through TurboTax Live Assisted Basic, you must file by March 31. After that, basic service costs $89 for federal returns with state returns included.
More ways to file taxes for free
Taxpayers who earned up to $79,000 in 2023 qualify for free guided tax preparation through the IRS Free File program. The agency’s list of Free File partners includes other popular providers like TaxAct and TaxSlayer. (If you earned more than $79,000, you can pay taxes via free-file fillable forms, which are available for free but require some tax knowledge.)
There’s also a new free tax filing option available to some people this year: The IRS is piloting its own service, Direct File, which is now open to eligible taxpayers in 12 states.
The website will only be available during certain periods of time as the IRS continues to conduct testing. The first thing you need to do is check if you are eligible: the participation criteria for each state are available on the website.
Not all tax situations are covered by IRS Direct File, such as if you are self-employed, make more than $200,000 a year, or itemize your deductions. You’ll also need to sign up for ID.me, a digital wallet that verifies your identity so you can access benefits and services.
If you don’t qualify, there are still ways to file your tax return for $0. Outside of Free File, you can use TaxSlayer’s Simply Free option if you earn less than $100,000, don’t file details, and don’t require any dependent, among other criteria. You may also want to check out providers like Cash App Taxes, which allows users 18 and older to file federal and state taxes for free. (That said, Cash App taxes aren’t available if you need to file more than one state return, if you earned more than $600 in foreign income, or received income from an estate or trust.)
Regardless of what you choose, remember one important point: Tax preparation usually gets more expensive the longer you wait. So don’t delay. Go ahead and archive.
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