TurboTax free taxes are really free but with a big IF. That big if is that free taxes with TurboTax are only free if you meet certain tests. If you don’t itemize deductions or have business income, investment income or rental income, then yes, TurboTax free taxes are really free. If you do have those things, then you’ll need to pay to use TurboTax.
Generally, for people who do itemize deductions or have business income or investment income, TurboTax costs $72 to $117. That includes one federal filing and one state filing. Additional state filings cost extra.
That said, TurboTax online tax software is an exceptionally smooth and easy way to do your taxes. Even those who aren’t eligible for the TurboTax free option probably won’t regret the choice. The bottom line is: TurboTax is a great service but their “free” ad campaign is a bit misleading.
The following list shows the conditions to get TurboTax free taxes:
- No itemized deductions
- No business income
- No self employment income
- No rental income
- No special tax circumstances
Basically, to get TurboTax free taxes, taxpayers need to file only basic taxes, with no bells and whistles. The minute a special form or situation rears its head, TurboTax free taxes are going to revert to something that costs money.
When Are TurboTax Free Taxes Really Free?
|TurboTax Free Taxes Are Really Free If...|
|If you are:||Then:||And your price for TurboTax online tax software* is:|
|Filing 1040 EZ with no schedules or deductions||TurboTax free taxes are really free.||$0|
|Filing IRS Schedule A (Itemized deductions)||TurboTax free taxes aren't really free.||$72|
|Filing IRS Schedule C (Self employment and small business)||TurboTax free taxes aren't really free.||$117|
|Filing IRS Schedule D (Investment income)||TurboTax free taxes aren't really free.||$92|
|Filing IRS Schedule E (Rental property income)||TurboTax free taxes aren't really free.||$92|
|Filing very complex taxes and need all of the above||TurboTax free taxes aren't really free.||$117|
|* Prices listed above include federal and one state filing. Additional states cost extra.|
TurboTax free taxes are being hyped heavily in ads. The ads are cute and funny and drive home the message that you’d have to be some kind of dope to miss the point that free TurboTax is really free. In the ad below, theoretical physicist Michio Kaku explains to a nonplussed taxpayer that yes, TurboTax free taxes really are free. However, the very simple explanation Kaku gives leaves out a major point. Namely, the TurboTax free option isn’t available to anyone with more than just the very basic tax situation. People in more complex tax situations will pay anywhere from $72 to $117 for TurboTax online software. In that case, TurboTax free taxes most definitely aren’t free.
TurboTax Prices Simplified
TurboTax free taxes are absolutely free. However, those free taxes don’t apply for people in more complex situation. The table below simplifies the TurboTax price list for people who aren’t eligible for free TurboTax.
For those outside the TurboTax free umbrella, cheaper mainstream options do exist. Scroll down to the next section to see online tax software choices that aren’t free but are a whole lot cheaper than TurboTax.
|TurboTax Prices Simplified||TurboTax Price|
|Simple taxes, no added schedules or deductions||TurboTax free taxes: $0|
|Add IRS Schedule A||TurboTax not free: $72|
|Add IRS Schedule C||TurboTax not free: $117|
|Add IRS Schedule D||TurboTax not free: $$92|
|Add IRS Schedule E||TurboTax not free: $92|
Also see: How to File Taxes Online
Who Gets Free TurboTax Taxes?
|Who Gets Free TurboTax Taxes?|
|People with no itemized deductions AND|
|no business income AND|
|no self-employment income AND|
|no investment income AND|
|no rental property income AND|
|no other complex tax situations requiring obscure IRS forms and schedules.|
TurboTax doesn’t make this plain in their ad campaigns. Of course their goal is to get as many customers as possible. Their best way to draw in the millions is to get people to sign up for their TurboTax free online option. If it turns out a customer has slightly more complex taxes, then they’re asked to upgrade.
The tweet below announces that the TurboTax free option is now available on iPhone and Android.
— TurboTax (@turbotax) January 28, 2016
Also see: What Should I Do With My Tax Refund?
TurboTax Free Taxes Really Are Free
Not to slag TurboTax down incessantly, their TurboTax free option really is free. For people with a very simple tax situation, TurboTax really does offer free federal AND free state tax filing. Anyone with a simple income source and not a lot of bells and whistles to their financial life really can get their taxes done for free with TurboTax.
More to the point, lots of Twitter users seem to like the TurboTax free option. Just go on Twitter and do a search for “TurboTax free” and a nearly endless list of tweets pop up like the following:
Shoutout to @turbotax for being amazing. Just filed my Federal and State taxes FOR FREE. It's worth tweeting about. GET ON IT, FELLOW ADULTS
— Eryn Slattery (@ErynSlattery) January 26, 2016
The Drawbacks of TurboTax Free Taxes
There is a downside to TurboTax free taxes. Even those with very simple financial lives like a single paycheck and no complications face a stumbling block. The TurboTax free version doesn’t allow users to save their tax info from year to year.
There are certain times when saving tax info comes in handy. Sometimes in the course of doing taxes, a taxpayer will have to enter last year’s taxes, income or other archived info. The TurboTax paid versions store that info from year to year and access it automatically. With the TurboTax free version, there’s no storage option. Not only that, but according to the tweet below, TurboTax even gets a little dig in via animation:
A fun thing that turbo tax does when you opt to do the free version is a cute little animation of all your info from last year being deleted
— jardous winter (@jarkrenshaw) January 28, 2016
Also see: How to File Your Taxes Free Online
How to Do Your Taxes Free with TurboTax
Using the TurboTax free taxes option is pretty simple. Just go to TurboTax’s home page by clicking here. Click the big orange “start for free” button. That’s it. TurboTax will guide you through the rest.
The TurboTax online software is hands down the easiest tax software on the market. Even people who get forced to upgrade to a paid version will likely find the experience seamless. TurboTax asks simple, easy-to-answer questions one by one. As the process unfolds, users can even see a running total of their tax refund in the margin.
The ad below shows Nobel Prize recipient and astrophysicist George Smoot explaining how to use TurboTax free online tax software to file taxes.
Also see: 3 Reasons Free Apps Really Cost You
The TurboTax Free Taxes App
Some may want to take the TurboTax free tax experience on the go. For them, the TurboTax free taxes app is a great find.
The app is free and lets users do their taxes right from their iPhone, Android phone or other mobile device. The app’s functionality is through the roof. Users can enter W-2 info by snapping a picture of the form. The app’s Apple Watch version gives updates on the status of the refund.
The commercial below shows theoretical physicist S. James Gates explaining to a taxpayer how to enter W-2 info into the TurboTax free app.
Cheaper Options Than “Free” TurboTax
Those who can’t take advantage of the TurboTax free option can really benefit by price shopping. TurboTax’s prices for their other choices run higher than average. The table below shows some good alternatives to the non-free TurboTax selections.
Generally, taxpayers excluded from free TurboTax who want the cheapest tax software should use TaxACT. TaxACT has the cheapest all-around tax software with the simplest pricing scheme. Anyone who uses TaxACT will pay between $0 and $35. The benefit of using TaxACT is, even users who get upgraded still won’t pay a lot.
|Cheaper Options than "Free" TurboTax|
|Taxes include:||Their Price||VS TurboTax Price||Notes|
|H&R Block||Schedule A (Itemized deductions)||$62||$72||H&R Block is $10 cheaper than TurboTax.|
|H&R Block||Schedule C (Self employment / business)||$72||$117||H&R Block is $45 cheaper than TurboTax.|
|H&R Block||Schedule D (Investment income)||$72||$92||H&R Block is $20 cheaper than TurboTax.|
|H&R Block||Schedule E (Rental income)||$72||$92||H&R Block is $20 cheaper than TurboTax.|
|H&R Block||All IRS forms and schedules||$87||$117||H&R Block is $30 cheaper than TurboTax.|
|TaxACT||Schedule A (Itemized deductions)||$30||$72||TaxACT is $42 cheaper than TurboTax|
|TaxACT||Schedule C (Self employment / business)||$35||$117||TaxACT is $82 cheaper than TurboTax|
|TaxACT||Schedule D (Investment income)||$30||$92||TaxACT is $62 cheaper than TurboTax|
|TaxACT||Schedule E (Rental income)||$30||$92||TaxACT is $62 cheaper than TurboTax|
|TaxACT||All IRS forms and schedules||$35||$117||TaxACT is $82 cheaper than TurboTax|
One downside to TaxACT is that some users find it a little cumbersome to use. People who want a really solid, simple tax experience for less money than TurboTax should go with H&R block.
To see our full comparison of TurboTax free and paid tax software vs TaxACT and H&R Block, click here.