If you plan to file your own taxes, online tax software can save you time and money. With so many online tax software platforms available, how do you know which is best for your situation? Is affordability at the top of your list? Or do you want the comfort of tax support if you need it?
Benzinga compares some of the top features of FreeTaxUSA vs. TurboTax to help you narrow down your choice.
Quick Overview of FreeTaxUSA
FreeTaxUSA is a budget-friendly online tax preparation platform. Founded in 2001, the software helps people e-file their federal and state tax returns. If you used FreeTaxUSA to file your previous year’s tax return, your data automatically transfers to the current year. FreeTaxUSA is best for taxpayers who want to save money when filing their tax returns.
Quick Overview of TurboTax
Created by Intuit nearly 40 years ago, TurboTax is a well-known do-it-yourself online tax filing software. Taxpayers can prepare and e-file federal and state tax returns through its easy-to-use platform. TurboTax may be pricier than its rivals, but it has robust customer and tax support. TurboTax is best for people who have more complicated tax situations or need extensive support.
FreeTaxUSA vs. TurboTax: Platform and Features
Not all tax software platforms are created equal.
What FreeTaxUSA Offers
The FreeTaxUSA platform gathers your personal and financial information through a series of questions and screens. You must complete one screen before you move on to the next.
The software features three levels of service based on your tax situation, all of which are free:
- Basic: Simple returns
- Premium: Investment income
- Self-employed: Freelancers and gig workers
FreeTaxUSA offers email and chat support. If you have a software-related question, you can pay an additional fee to speak with customer support. FreeTaxUSA does not provide tax support.
What TurboTax Offers
The TurboTax platform simplifies the tax preparation process with graphics and simple questions. The software takes a step-by-step approach and tailors its questions to your tax situation.
The software offers three tiers of service:
- Free Edition: Simple returns
- Deluxe: Itemized deductions and credits
- Premium: Freelancers, independent contractors, business owners, rental income and investments
With TurboTax, you can reach customer support by phone, email or chat. For an added fee, you can get expert tax help or even have a professional prepare your return.
TurboTax features a mobile app where you can e-file your tax return, talk with a specialist and check the status of your return.
Bottom Line
When comparing TurboTax vs. FreeTaxUSA, TurboTax comes out on top with its mobile app and expanded service features.
FreeTaxUSA vs. TurboTax: Research and Learning Tools
Research and learning tools can help bridge the gap if you have questions or need help.
What FreeTaxUSA Offers
FreeTaxUSA offers limited research and learning tools. You can search the site's FAQs or visit the FreeTaxUSA Community to ask a tax question.
What TurboTax Offers
TurboTax Support features many helpful resources, including video tutorials, help articles and community discussions. You can browse common topics, read the latest tax news or search online.
Bottom Line
TurboTax emerges as the winner with its array of research and learning tools.
FreeTaxUSA vs. TurboTax: Pricing and Cost
You'll find significant pricing differences between FreeTaxUSA and TurboTax.
FreeTaxUSA Fees
FreeTaxUSA charges nothing to prepare and file your federal tax return. You pay a flat $14.99 fee for state returns.
FreeTaxUSA offers three support options.
- Basic: Helps via email at no extra charge
- Deluxe: Pay $7.99 for live chat support and unlimited amended returns
- Pro Support: Get personalized help from a tax pro by phone, live screen share or live chat for $39.99
TurboTax Fees
TurboTax has several pricing options.
- Do-It-Yourself: Fees range from $0 to $129 when you prepare your return.
- Live assisted: Get a tax professional's expert review and on-demand help. Fees range from $89 to $219 for your federal return.
- Live full service: A tax professional prepares your return at a cost ranging from $89 to $389.
TurboTax offers special price promotions which can help you save money.
Bottom Line
With no fees charged to file any federal tax return, FreeTaxUSA comes out on top.
FreeTaxUSA vs. TurboTax: Security Measures and Data Protection
Online tax preparation companies should take steps to keep your personal information safe.
FreeTaxUSA Security Features
FreeTaxUSA uses multifactor authentication (MFA) to prevent unauthorized access to your data and sends alerts when something changes on your account. Data is stored on servers in secure data centers and is encrypted when transmitted.
TurboTax Security Features
TurboTax uses similar security features, such as MFA and data encryption, to keep your information safe. In addition, TurboTax takes steps to prevent fraud by monitoring and blocking suspicious accounts and notifying users of scams.
Bottom Line
While both companies take steps to protect your data, TurboTax is the winner for its added fraud prevention measures.
FreeTaxUSA vs. TurboTax: Ease of Use
Taxes are complicated enough. Choosing tax software that's easy to use and understand is helpful when filing your return.
FreeTaxUSA User Interface
FreeTaxUSA has a clean and easy-to-use interface. Each section focuses on key areas in your tax return, such as income and deductions. Save time by uploading pictures of your W-2s and 1099s. While you must complete one section before moving on to the next, you have less chance of missing something.
As you enter data and answer questions, the program keeps a running total of your expected refund or taxes due. Once you finish, the platform’s Refund Maximizer reviews your forms and alerts you of possible deductions or credits you may be eligible for.
TurboTax User Interface
TurboTax features simple questions and graphics where you can select the tax situations that apply to you. The intuitive software then asks questions relevant to your responses. The software automatically calculates and shows your tax refund or what you owe. Plus, TurboTax has built-in mechanisms to check for errors or discrepancies.
You can easily import W-2s and 1099s when issued by a TurboTax Import Partner company. Or you can save yourself time by uploading a picture of your W-2 or 1099 from your phone.
Bottom Line
While both platforms are easy to use, TurboTax screens are easier to navigate. Plus, the interface with QuickBooks makes tax filing easier if you are self-employed or freelance.
FreeTaxUSA vs. TurboTax: Customer Support and Assistance
You may have questions or need help when filing your tax return.
FreeTaxUSA Customer Service
If you get into a bind, FreeTaxUSA offers support via email or through its online community group. You pay an extra fee to call customer service, but support is limited to the software.
TurboTax Customer Service
You can reach TurboTax customer service by phone, email or chat. You can speak with a tax expert or have a tax professional prepare your return for an additional fee.
Bottom Line
With its multiple support options and features, TurboTax is the clear winner.
FreeTaxUSA vs. TurboTax: User Reviews and Satisfaction Ratings
Users are generally satisfied with both FreeTaxUSA and TurboTax.
FreeTaxUSA Customer Reviews
Customers give FreeTaxUSA good marks for its free e-filing features and flat-rate state return fees. Limited customer support and lack of tax help are key drawbacks.
TurboTax Customer Reviews
TurboTax receives recognition for its user interface and robust customer support. Customers also appreciate the software's ability to handle more complicated tax returns. TurboTax is pricier, but you get more features than other platforms.
Bottom Line
Despite its higher cost, TurboTax gets higher reviews for its platform and support.
Useful Tips on Filing Your Taxes
Filing taxes can be stressful. Here are some helpful tips for filing taxes.
- Know the due dates: If you file late and owe taxes, you could incur penalties and interest.
- Decide how you plan to file: Determine whether you will self-prepare or pay a reputable tax professional.
- Keep good records: Tax prep is easier when you have everything you need. Plus, you can avoid missing deductions or credits.
- Check for errors: Review your return for errors or missing information before you file.
Pick the Right Tax Software
Choosing the right tax software depends on your appetite for cost, service and support. If you are budget-conscious with a relatively simple tax situation, FreeTaxUSA may be your best choice. On the other hand, TurboTax may suit you well when your taxes are more complicated or you prefer robust customer support.
Frequently Asked Questions
Which is better, TurboTax or FreeTaxUSA?
Choosing between FreeTaxUSA or TurboTax depends on your tax situation. If you want to avoid paying fees and have a simple return, FreeTaxUSA may be better. However, if you like talking with a tax expert or have a more complicated tax return, TurboTax may be the better choice.
How accurate is TurboTax or FreeTaxUSA?
Both TurboTax and FreeTaxUSA guarantee the accuracy of their calculations. Both companies will reimburse you for interest or penalties resulting from a calculation error.
Is it safe to use FreeTaxUSA?
FreeTaxUSA incorporates many security features to keep personal data safe. Its security features include multifactor authentication, account alerts and data encryption.
Do professionals use TurboTax?
If you prepare tax returns for a living, TurboTax features several packages for professionals. Services range from individual to business tax returns.
About Anna Yen
Anna Yen, CFA is a personal finance writer with over two decades of professional finance and writing experience in roles within JPMorgan and UBS derivatives, asset management, crypto, and Family Money Map. She specializes in writing about personal finance topics ranging from investments, budgeting, debt management, credit, student loans, insurance, and retirement planning to real estate and cryptocurrencies. Her work has been published on sites like Quicken, the crypto exchange Bybit, and Credit.com.