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Top 10 Free Tax Preparation Programs

by William Perez

You can prepare your taxes and electronically file your return for free using one of the IRS Free File websites. The IRS has teamed up with nineteen software companies to make tax preparation free or low-cost for most Americans. You must begin at the IRS Free File page. If you go directly to the company's website, you won't qualify for the free service.

These tax prep programs were thoroughly tested using the following criteria: Cost, Ease of Use, Speed, and Accuracy.

1. TurboTax Freedom Edition

TurboTax (Free File Edition) caught a typo I made when entering my W2. This is a common tax prep mistake, and TurboTax was one of two Free File software programs that caught the error. TurboTax is very easy to use, fast, and accurate. TurboTax is best used with Internet Explorer. The free version of TurboTax is available to filers with adjusted gross income of $30,000 or less. TurboTax also provides free state tax filing for the states of AL, AR, AZ, GA, ID, IA, KY, MA, MI, MN, MO, MS, NY, ND, NC, OK, OR, RI, SC, VT, WV. Otherwise, adding a state return will cost $9.95. Unfortunately, the free edition does not cover complex tax situations. Overall, TurboTax Free File is very highly recommended.

2. H&R Block's TaxCut

H&R Block TaxCut (Free File version) provides free access to the TaxCut Premium software. Users have access to all of TaxCut Premium's tools, forms, and tips. The software did not, however, detect a typo when entering my W2 (a common tax prep mistake). TaxCut is easy to use and fast. Requires Internet Explorer. Adding a state return costs $24.95. No marketing pressure to upgrade to a paid version. Overall, TaxCut is one of the very best free file software programs available. Highly recommended.

3. TaxACT

TaxACT could have been faster had it eliminated some of the question screens, and allowed me to speed through my tax return. Reminders to upgrade to the paid Deluxe version slowed me down too. TaxACT caught a typo when I was entering my W2 information (a common tax prep mistake). In fact, TaxACT is one of two Free File software programs that caught the error. Adding a state return will cost $12.95. TaxACT is fast and easy to use. Considering its accuracy, TaxACT is very highly recommended.

4. CompleteTax

CompleteTax offers quick and accurate tax calculations in an interview-based software format. While I wish the interface could be snazzier, overall CompleteTax allowed me to finish a tax return quickly without the hassles and headaches of trying to figure out the software. Fast and relatively easy to use. Adding a state return will cost an extra $9.95. Recommended.

5. TaxEngine

TaxEngine automatically calculated the payroll taxes on my W2. This is a rare feature among Free File software providers. However, the software did not catch a typo on my W2 (a common mistake). Overall, TaxEngine's clean user interface makes it easier to prepare a tax return smoothly and quickly. Fast and relatively easy to use. Adding a state tax retun will cost an extra $10. Recommended.

6. TaxSlayer

Much improved over last year, TaxSlayer now sports a slick, lightning fast user interface that cuts through the usual tax prep clutter. Free state tax return if you are preparing a federal return. If you are preparing only a state return, the fee is $9.95. TaxSlayer is fast and relatively easy to use. Recommended.

7. OLT

I had a little trouble understanding the registration screens and the error checklist page (at the end of the tax prep process). Otherwise, the interview screens kept me clicking along quickly. One nice bonus, the website asked me to look over a preview of my tax forms before e-filing. The logout screen was a bit confusing. After hitting "logout" I was taken to a blank screen. I have no idea if my tax return was saved or not. OLT has an average speed and is somewhat easy to use.

8. efiletaxreturns

efiletaxreturns offers users the option to use an interview format or work directly with the tax form entry screens. The software does not accept figures with cents, so you have to round all the numbers in your head before typing them in the program. The software did catch a typo on my W2. Unfortunately, I found it hard to navigate through the interview format. The pluses and minuses are about equal for efiletaxreturns. State tax return costs an extra $19.95. Average speed & ease of use.

9. Free File software that is not recommended

Online Tax Pros: The user interface is a little confusing, but not too much. State tax forms were not available for testing.

FreeTaxUSA: FreeTaxUSA is heavy on the data entry screens.

123Easytaxfiling: The biggest drawback of 123Easytax is their navigation interface. Overall, this software offers a subpar user experience, and is not recommended.

CitizenTax: Got error message after adding a W2. State tax forms were not available for testing. Does not support Schedule C or F.

10. Other Free File Programs

FileYourTaxes: Interview-style software interface has screen after screen of long questions to answer. This quickly felt very tiring.

average1040: I'm suspicious that they force users to input their bank account information.

1040Now: extremely slow Web server.

ezTaxReturn: horrible user interface.

Free Tax Returns: data entry forms are long and cumbersome.

eSmartTax: questions are hard to understand.

TaxSimple: ActiveX control crashed my computer.

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