I like to talk. I like money. I like the internet. I like to talk about money on the internet. While I hope you find some value in articles like this, keep in mind this blog is for general information and entertainment purposes. Everyone’s situation is different, especially when it comes to taxes, so always consult an expert.
That said, I had a moment of pure Centsei giddiness last weekend, ironically, when I filed my taxes for the year. No, not because of the fact I owed a little bit (darn), but rather because I finally figured out a way that nearly anyone can file their U.S. taxes – federal and state – online for free.
My last article was plenty long, so let’s not waste time. Here’s how to do it.
Option 1: Credit Karma
Credit Karma has primarily been known for tools devoted to improving your credit score. However, they recently launched their own online tax filing service that lets you file both your state and federal income taxes for free, regardless of your income. This feature is the first of its kind, and I must admit that I’d been paying $50-100 per year to file mine with the brand-name services. Never again. The software was intuitive, robust, and thorough. I filed both returns in under an hour, despite having a litany of tax documents that Lady Centsei and I gathered throughout the year. They even offer “audit defense” and guarantee the maximum refund. Only downside seemed to be that it may not yet be available in some states, though I could not find a list.
Quick note that I am not sponsored by Credit Karma in any way. I just genuinely like this product and think it would benefit my readers. Per my disclaimer, even if I ever do get sponsored or sell out, it will *always* be for a product that I actually use or truly believe would benefit my readers.
Pros – Easy-to-use software available to everyone; Completely free regardless of income; Very intuitive
Cons – Reportedly not available in every state; Not recommended for highly-complex tax scenarios
Cost – $0.000. Free for both federal and state.
Option 2: Name brand filing companies (e.g. Turbotax)
Approximately 70% of Americans make less than $72,000. Luckily, the IRS requires that filing companies like TurboTax make their software available for free if your adjusted gross income was less than $72,000. While the federal return is free to file, some providers charge to file the state return, so read the fine print.
Pros – Easy-to-use software available to most
Cons – Free version is limited to incomes below $72,000 (incomes above that must pay); Some providers charge to file the state return, so read the fine print
Cost – Free (federal); Free or paid (state) depending on the provider
Option 3: Fill it out by hand
For many years, I filled out my tax return by hand. While it might seem intimidating at first, it’s straight forward, especially if you receive a W-2, plan to take the standard deduction, and don’t have any unusual personal circumstances. The IRS provides instructions here, and there are some YouTube tutorials to help for visual learners. Sadly, the IRS got rid of the incredible handy on-page 1040-EZ in 2018, but the regular 1040 can still be manageable to navigate for most situations. If you owe money, you can include a check payable to the Internal Revenue Service or make an electronic payment online.
Pros – Truly free; Can be faster than filing online
Cons – More adding and subtracting than you’ve had to do since middle school; some terms and language can be confusing; 1040-EZ was discontinued in 2018; not recommended for complex tax situations
Cost – Free, minus the cost of a stamp
That’s it! You have until May 17th 2021 to file your federal taxes this year, and with these services, you won’t have to pay a thing. If you own a business or have other advanced tax needs, please consult a professional. If not, I hope this article saves you from those expensive filing fees – forever.
