FreeTaxUSA Review 2023 for Small Businesses | Business.org
Data as of 12/9/22. Offers and availability may vary by location and are subject to change.
The bottom line: FreeTaxUSA is a completely free tax-filing service that is both secure and easy for small-business owners to use. Let’s dive into the pricing, key features, and pros and cons of FreeTaxUSA for small businesses.
FreeTaxUSA plans and pricing
FreeTaxUSA is one of the most budget-friendly tax preparation services on the market today. You can file a federal tax return for free, and state returns start at a low price. All of the plans except the Deluxe Plan cost $0 to file a federal tax return and $14.99 per state to file a state tax return.
FreeTaxUSA’s basic plan is ideal for first-time users. It offers guidance throughout the tax return process and is a great option for taxpayers who have never filed a business tax return before. The Basic Plan isn’t the best choice for small-business owners—that’d be the Self-Employed Plan, which we explore in more detail below. Instead, this plan works best for students, renters, and individuals who just want the best tax return as quickly as possible.
Advanced and Premium
FreeTaxUSA’s Advanced plan includes features that help you itemize expenses to maximize end-of-year tax deductions. It’s a good fit for homeowners, parents, caregivers, and others who likely qualify for certain tax deductions. The Premium plan helps you file slightly more unique income taxes, such as income from property you rent or from the sale of a house.
The self-employed plan is the right tax-filing plan for small-business owners who file Schedule C forms alongside their 1040 tax forms. If you’re not sure what either of those forms refers to, talk to an accountant and check out our quick overview of small-business taxes.
Typically, though, if you’re a freelancer, solopreneur, sole proprietor, or owner of an LLC, this tax-filing plan is the best one for you. It should help you calculate key business deductions, including home office deductions and asset depreciation, so you can get the best possible tax return—for nothing more than the cost of a state return.
FreeTaxUSA’s Deluxe plan is the only plan that charges you for federal tax filing—though at $6.99, that cost is cheaper than nearly every other tax filing software. (You’ll also pay the standard $14.99 to file state taxes.) For a little less than $7, this plan lets you jump to the front of the customer service line if you run into a problem. It also includes audit assistance and, if you need to file an amended return, lets you do so for free. In other words, if you want a little peace of mind while still paying the minimum amount for tax filing, choose the Deluxe plan.
- Outsource your bookkeeping. Merritt Bookkeeping's affordable outsourced bookkeeping saves business owners time and money.
- Opt for all-in-one business checking. Found is the perfect match for teams of one looking for smart tax tools.
- Get better accounting software. Quickbooks is our top pick for businesses looking for comprehensive features that simplify tax season.
FreeTaxUSA’s key features
FreeTaxUSA’s software is surprisingly robust for a (mostly) free tax-filing software program, which makes it a great option for budget-conscious small-business owners.
Multiple refund options
With FreeTaxUSA, you can choose from several flexible tax refund options. You can choose to get your refund money sent as a check, have it deposited to your bank account, or receive it in the form of a prepaid debit card.
FreeTaxUSA makes it easy to safely and securely store finished tax returns. Simply log into your account to review completed tax returns for up to seven years.
100% accuracy guarantee
Filing taxes as a small-business owner can be stressful, but FreeTaxUSA takes off some of the pressure with its 100% accuracy guarantee. This means the company will pay the IRS’s penalties and fees if you’re charged for calculation errors—as long as you entered all your tax information correctly. (FreeTaxUSA, like any tax-filing service, will pay for fees incurred if the software itself makes a mistake, but not if you make a mistake.)
Tax extension filing
If you don’t think you’ll be able to file your tax paperwork in time, you can use FreeTaxUSA to file for a tax extension. (You can also do this via the IRS’s website—it doesn’t cost anything). However, filing a tax extension is only an extension on the paperwork. You still need to file your taxes by the tax-filing deadline, or else you’ll need to work out a payment plan with the IRS.
If you’ve been granted an extension (or if you simply missed the deadline sans extension), FreeTaxUSA still lets you file taxes for the same price of no dollars (and, of course, $14.99 for state filing). Though you won’t be charged extra by FreeTaxUSA, you’ll likely be subject to late fees and penalties from the IRS, so make sure to file your taxes—or file for an extension—as soon as possible.
FreeTaxUSA pros and cons
- Free federal filing. Federal filing is free with Basic, Advanced, Premium, and Self-Employed plans.
- Affordable state filing. If you don’t qualify for free state filing with another tax preparation service, you can use FreeTaxUSA to get state filing at an affordable rate of $14.99 per state.
- No pressure to upgrade. Because every plan is free, you won’t be bombarded with pop-ups encouraging you to upgrade. (You might be hit with encouragement to upgrade to the Deluxe plan, though—it just won’t be as obnoxious as software with multiple paid plan options.)
- Supports most forms and schedules. FreeTaxUSA is robust enough to support almost any tax-filing scenario, from homeowners filing income earned via rental properties to sole proprietors filing Schedule C and other small-business tax forms.
- Multiple refund options. You can choose to receive your refund via direct deposit, check, or prepaid debit card.
- No form importing. Unfortunately, FreeTaxUSA doesn’t offer the time-saving feature of W-2 or 1099 importing.
- Limited extras. FreeTaxUSA offers all the basics of tax filing, but unlike its paid competitors, it doesn’t include many add-on features.
- Basic interface. Many users note that FreeTaxUSA’s interface is fairly basic and minimalistic in comparison to more well-known options like TurboTax.
FreeTaxUSA is a great tax filing software for small-business owners on a budget. It’s quite comprehensive—especially for a free service—and supports all major forms and tax schedules. The company backs the quality of its services with the 100% accuracy guarantee, and it will pay for any fees the IRS charges due to miscalculations (unless the error is due to your own typos.)
However, FreeTaxUSA does have some downsides. If you’re looking for a service with a sophisticated interface or time-saving form upload capabilities, we recommend looking elsewhere.
Is FreeTaxUSA wrong for your specific business needs? Find a better option in our piece on the best small-business tax software.
Yes, FreeTaxUSA is a legitimate company and IRS-approved e-file provider. As of 2022, the company has filed more than 50 million tax returns and provides data encryption, secure IRS transmissions, and ongoing account monitoring.
There is nothing wrong with using FreeTaxUSA for your small business tax filing needs. The company is an IRS-approved e-file provider and offers secure services. However, FreeTaxUSA software does have some disadvantages: the service can’t import W-2s or 1099s, and the Q&A pages can be difficult to navigate.
What’s the difference between TurboTax and FreeTaxUSA?
TurboTax and FreeTaxUSA are both reputable tax software products that offer affordable services for small-business owners. However, TurboTax is known for its higher pricing and limited customer service, while FreeTaxUSA is much, much more affordable.
At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.