Free Tax Preparation Cost Me $87
There’s only one thing that is nearly as bad as paying taxes: Doing your taxes. And to make matters worse, the IRS has made tax filing so complicated that hardly anyone can just pick up a form and a pen to file to complete their return. consequently, a huge industry of tax preparation sets has arisen, making it far easier to do your taxes, but of course much costlier in addition.
Many of these sets are now offering free online versions of their software. Since paying to do your taxes just adds insult to injury, I wanted to test them out to see how they performed. I of course also wanted to know how much these free sets were really going to cost me!
Before we get started, here’s a bit about my tax situation: I live in California and am married (and happily filing jointly) with two little dependents (a.k.a. my kids). I usually take the standard deduction instead of itemizing. While I rent my dominant residence, I do own some rental similarities. I have no investment income to report this year.
The first place I started was with the biggest name in tax preparation, TurboTax. The Federal Free Edition looks and roles just like their offerings, and includes free federal e-filing in addition. Unfortunately, Federal Free Edition won’t manager my rental similarities, so I need to upgrade to the $49.95 Premier version. I also have to pay an additional $36.95 to do my California state taxes, so my total cost for TurboTax is $86.90. Definitely costs a lot more than free!
Next I went to the oldest name in tax help: H&R Block. While H&R Block is best known for their thousands of tax centers around the country (remember when they used to have one in every Sears?) their At Home product is a decent online different. As you’d speculate, the free version applies only to those with very simple tax returns. My rental similarities again force me to pay $49.95 for the Premier version, and I have to use and additional $29.95 to prepare and file my California= return. at the minimum my ‘free’ return here cost a few dollars less than it did with TurboTax – only $79.90.
Finally, I decided to try out TaxACT, which advertises that it is “Free for Everyone.” Guess what? This truly seems to be true! While my California state tax return does cost $14.95 (including free state efile), the federal return really was free, and already handled the complicate transactions required for my rental similarities (though not quite as smoothly as TurboTax did).
While it is no surprise to discover that you can rarely get something for nothing, I did prepare my taxes for a lot less money this year!