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6 Apr 2011 By Bibey 

Is Free Tax Software Really Free?

27 Jan

A look at how free tax software works and when it may incur a fee.

As you search for tax software you are probably going to be intrigued by those tax software alternatives that are free. This allows you to file your return, without paying a dime out of your own pocket. Unfortunately, free does not mean free for everybody, all the time. There are still some things that you may have to pay for, even if you opt for a free version.


With most free tax software you are able to file your federal return only. If you are interested in doing the same with your state tax, you will be asked to pay a fee. For instance, TurboTax charges a fee at the time of writing of $30.95 for every state return that you file. Since the majority of people have to file both federal and state returns, this is not a fee you will be able to hide from.

Free tax software offers the bare minimum in terms of features. This is perfect for somebody with one W-2 and not many deductions. If you have a more complex situation, such as with self-employment business income and several credits/exemptions/deductions, you will find that you have to upgrade to a higher version. In turn, you will end up paying to do so.

If you are only interested in basic features and filing a federal return, free tax software is a great choice. On the other hand, don’t be surprised if you have to upgrade from a free tax software edition and spend some money along the way. 

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