Review of IRS-Authorized Free e-File Companies

in #irs5 years ago (edited)

After the last article, I decided to try e-filing on TurboTax, which led me to try other sites and, so, I decided to share the results of my research. I've tried to be objective and this has taken me several days to complete because of trying to get help from the various company's customer service and wrestle with how to fit the test to each site.

Spoiler! The ultimate result of my testing is that NONE of the sites provides such an easy experience that you don't need to know anything about filing your return. Each of them reaches a point where you have to step in and use your understanding of tax laws to complete the return correctly. If you don't know anything about taxes, e-filing is NOT a good choice so, if you want the best results , hire a CPA. If you're low income, ask for the help of a low-income tax assistance center.

If you're looking to get an account on one of these websites and want to pay less (maybe MUCH less) for an account, now is the best time since the filing deadline has passed! Some offer heavily discounted rates!

Last updated 4/16/19.

The deadline is coming right up for those who owe money!

Remember to turn off your anti-tracker/ad blocker/anti-scripter, such as Ghostery, Disconnect, Blur, as it is likely to cause the website to malfunction.



See my article IRS FreeFile - Should I Use It? - Plus Earned Income & Child Credits for more info about e-filing your taxes and the providers.

Some States Offer Free Filing Themselves

This chart from ezTaxReturn isn't 100% accurate (i.e. It only tells you which states offer free e-filing if ezTaxReturn doesn't support those states, but it does show which states don't require that you file), but it does help. So, make sure to check this and then see if your state is offering free tax e-file. One example of a state that does and is supported by ezTaxReturn is Wisconsin. I reported to them that their chart is inaccurate - but they don't care.

Honestly, though, you're better off looking at Free State Income Tax E-File Options For All 50 States (Updated 2019) and Free State Income Tax Preparation Software instead. It shows everything you need to know about which states off free e-filing!

If you want to see more info on some of the companies below, as well as a few others, including a colorful chart and details, try THESE COMPANIES OFFER FREE TAX SOFTWARE – SERIOUSLY!. Note: they claim that 1040NOW.net charges to file but that's if you don't go to the free-file link I provided.

Please Look at Each Site's List of Supported Forms

Not all forms and schedules are supported by each site. Some aren't allowed to be, others the site doesn't support, and some are supposed to be supported but the site malfunctions. Nevertheless, there is usually a list of supported forms - if you don't see one listed that you know you need, try a different website instead of wasting your time!

Check the Prices and Fees, and Any Terms and Limitations

Although e-filing is supposed to be free, some sites have hidden fees or charge for specific things beyond a basic (1040 only) return.

Read the fine print. Some of these companies are very protective of their own interests, including binding arbitration. They SHOULD provide a way to opt out of binding arbitration; for example, H&R Block offers this link.

Always Use the Freefile Link

Most of these companies provide both free and paid services and if you fail to use the link I've given, you may be charged. In addition, certain companies, such as FileYourTaxes, require that you come from the IRS website when you want to file a return or extension. I have provided the link from irs.gov, but that doesn't mean there is no tracking or referral system that might note that you didn't arrive there from irs.gov.

My Methodology and Criteria

I tried them after I figured out the taxes on paper, which, given the IRS's instructional complexity, wasn't easy and, during the process, I even found a couple of mistakes I'd made - but I was mostly correct. Apparently, the IRS isn't strict enough with these companies, and isn't ensuring full compliance, accuracy and correctness! I applied the following unique circumstances to try and see how each handled them:

General

  • Low income (less than $10,000) employee, single, not remarried, between the ages of 18-55.
  • 2 qualifying, deductible, minor children.
  • Widower, spouse was a non-resident alien who died in 2017.
  • Valid SSNs for all 3 people, no other people in the home.
  • Not the dependent of anyone else, and not caring for anyone else.
  • Paid for most expenses throughout the year.
  • Aside from the below, no special income, credits, reductions, etc.
    • No investment, rental, church, penal, combat, self-employment, farm or other income/loss, and no loans, grants or scholarships.
    • No properties (home, rental, mobile home, etc.).
    • No pensions, annuities, IRAs or any other investments.
    • No unpaid sales taxes on out-of-state purchases.
    • No one is disabled.
  • No tax forms filed in 2017.
  • Part-year residence in Wisconsin in 2017, full year in 2018.
  • Single residence (not a long-term facility or mobile home) in Wisconsin in 2018, rented for $600/month.
  • Maximum standard deductions applied.
  • Customer service must be very helpful and polite, even if they can't do anything to help with the requirements.

IRS

  • Automatically be filed as head of household. $18,000
  • Being filed as a consultant with a 1099-MISC when actually an employee, with the employer refusing to issue a W-2.
    • Need to indicate an SS-8 had been filed but not yet replied to by the IRS.
    • This income should be shown as wages (Form 1040, line 1) or, if it's a side job (not considered your main job, or the type of work you typically do), miscellaneous income (which gets a larger refund) (same line).
      • No self-employment status or taxes.
    • If I cannot file correctly, I will use a W-2, hopefully a substitute W-2.
    • No incorrect taxes were filed.
      • Completion of the 8919 and Schedule 4. Sites that give a refund of $2,605 did not calculate the owed SSI/Medicare taxes. $413
  • Minimal interest/dividends from bank/credit union account. (Form 1040, lines 2b & 3b)
  • Ineligibility for Child Tax Credit due to having been married to a non-resident alien. (Form 1040, line 12a)
    • No entries on Form 1040, lines 11a & b, Schedules 1, 2, 3, 5, E, R and SE, and Forms 2555/2555-EZ, 4797, 5695, 8910, 8936.
  • Automatically receive Additional Child Tax Credit. (Form 1040, line 17b) $435
  • Automatically receive the EITC (Form 1040, line 17a). Check EITC eligibility with the IRS's app. $2,170
    • No previous violation for EITC, thus avoiding the requirement to file Form 8862 to reinstate eligibility.
    • Completion of worksheet A and Schedule EIC but not worksheet B.
  • Estimated refund of $2,192.
  • Leaving a note on the return to explain my income situation for the IRS.

State

  • 3 exemptions (Form 1, line 17a) $2,100
  • Head of household $13,660
  • Receive rent w/o heat credit. (Form 1, line 22a) $218
  • Receive EITC. (Form 1, line 52) $239
  • Receive Wisconsin Homestead Tax Credit. (Form 1, line 45) $684
    • Submit data for rent certificate.
    • Complete Schedule H.
  • Income from Wisconsin Works, county relief, kinship care, and/or other cash public assistance of ~$3,600.
    • Complete Schedule 3 on Schedule H. {All sites that supported Sched. H also supported reporting the assistance, but many didn't automatically prompt me to complete Sched. H and the rent certificate.}
  • Estimated refund of $923.

Important Notes

I figured I wouldn't have any luck but most people probably won't encounter the problems I did. In any event, I suggest that you do the 1040 paper version (or you can edit the PDFs on your computer, which I think is easier) to make sure the provider you choose doesn't screw up before you e-file. Also, again, remember that I used special circumstances to test these providers - many people will not encounter these problems!

I have included data (where available) from Glassdoor, Indeed, TrustPilot, Consumer Affairs, the Better Business Bureau (BBB) and Google Transparency Report: Safe Browsing. The presence or absence of data from each site does not necessarily mean anything good or bad. Here are some points to consider:

  1. Newer and smaller online companies are less likely to have a presence on these sites (except Google TR, which is a testing site).
  2. Older and larger online companies are more likely to have a presence on these sites (except Google TR, which is a testing site).
  3. A very small number of reviews on a site tends to make that particular rating invalid because of the tendency of SOME companies to deliberately post positive reviews of their company on these sites, but this may not be why there are only a few reviews. Many people just aren't aware that they can give feedback to these companies.
  4. Just because there is a good or bad review, doesn't make it valid automatically. I've seen some pretty dumb reviews, where the person was actually reviewing a different company, where the review really wasn't relevant, and lots of other reason.
  5. If you look at the BBB, please notice if there is any information about COMPLAINTS. These are separate from reviews, and can give added insight into a company's tendencies, both when serving customers and dealing with complaints.
  6. If you're clever and look closely, you can notice trends in a company's behavior.
  7. There are a lot of other websites that provide the same services as these, so you can do extra research to find more data. Let me know if you know of a REALLY superior one, and I might incorporate it into these and future articles (where useful).
  8. Employee reviews are useful because if lots of employees are unhappy, they're less likely to be doing a good job for the clients. Lots of positive reviews tend to indicate that you'll be treated well as a customer - but not always.
  9. In the end, you have to take it all with a pinch of skepticism.

THIS TEST SCENARIO DOES NOT TEST ALL POSSIBLE SPECIAL SITUATIONS, AND SOME ASPECTS OF IT ARE UNUSUAL, SO WHEN MAKING DECISIONS BASED ON THE REVIEWS I'VE PROVIDED, MAKE SURE TO TAKE THIS INTO CONSIDERATION BEFORE CHOOSING.


"Option to donate to Presidential Election Campaign Fund:" refers to the opportunity to have $3 contributed to the election campaign, but doesn't cost you anything. It appears to come out of the taxes paid. It also pays for pediatric medical research.

Customer Service Support types are those that are offered free-of-charge for free e-filing. Certain companies offer phone support for paying customers.

The word "responsive" below is a programming word that means that the program changes what you see on the same page and ensuing pages. For example, if you answered "yes" to having gotten married this year, it would show you fields to enter info about your new spouse, but if you answered "no", that wouldn't appear or - if shown already - would disappear. Responsiveness is programming that is designed to make your experience more pleasing, easier and it adjusts to your screen-size (which is called "mobile first").

Given the complexity of tax laws these days, and the peculiarities of the scenario I set up, I am not surprised that every company had a problem helping me, and some either refused to or couldn't because of site limitations. All companies offered some sort of FAQ/written help section, but they varied in quality, completeness and accuracy.



Results of Trying Some Myself


Because this article has exceeded Steemit's limit of 65KB, I've split it up into individual reviews. My apologies for the inconvenience! A link to the review is provided for each company.

1040.com

🌟 My Review

Drake Enterprises, LTD.
Franklin, North Carolina
Summary: 🛑DO NOT USE! SEE MY ARTICLE Details of Review of IRS FreeFile Provider: 1040.com🛑


1040NOW.NET

🌟🌟 My Review

1040 NOW TAX CORPORATION
Philadelphia, Pennsylvania
Summary: 🚧Not at all recommended for anyone except experienced taxpayers who know exactly what to file and just want to do it faster. Some forms are not functional, such as the 8812 (Additional Child Tax Credit for those who can't get the Child/Dependent Tax Credit). Slow customer service response time.🚧


e-Smart Tax

🌟🌟🌟1/2 My Review

Liberty Tax
Virginia Beach, Virginia
Summary: Recommended. Fairly easy to use and ok for most tax filers. However, if you need to use the 8919 with Sched. 4 line 58, report unreported wages, or show that you are contesting being filed incorrectly, you cannot do that on this site.


ezTaxReturn

🌟🌟🌟 My Review

ezTaxReturn.com®, LLC
Garden City, NY
Summary: Recommended for federal returns only; their State chart doesn't admit that some states with free filing offer that, and customer service doesn't care, and the State section is entirely questions, no menus, so you can't try to manually override mistakes it made. Almost no errors, easy to use, but customer service experience is lacking. Also, the Homestead Tax Credit may not be supported for your state (it isn't for WI).


FileYourTaxes

🌟🌟🌟 My Review

Oxnard, CA
Summary: Recommended for taxpayers with a fair amount of understanding of their returns. It is one of the few that seemed able to handle my test fairly well, but I had to find those things, which wasn't always readily available. Do not expect anything sensible from customer service - it's horrible. Although they say your income must be $9,000, they will still allow you to file your federal return for free if it's less. In fact, they offer the choice of going back to IRS.gov to choose another provider, free-file, or pay for a premium account.


Free1040TaxReturn.com

🌟🌟 My Review

Free Tax Returns.com, Inc.
Federal Way, Washington, Incorporated in Nevada
Summary: 🛑Not recommended due to numerous errors, limited forms support, and hostile customer service.🛑


FreeTaxUSA

🌟🌟🌟 My Review

TaxHawk, Inc.
Provo, UT
Summary: Somewhat recommended for most standard filers but those with special circumstances may not be supported.


H&R Block

🌟🌟1/2 My Review

Kansas City, MO
Summary: Recommended for most standard filers. Although it guides you, making filing pretty easy, it is so controlling that you can't over-ride it when it makes a mistake. Power users won't like that, and the special circumstances I tested for income were not supported. Customer service was surprisingly poor.


Online Taxes at OLT.com

🌟🌟🌟🌟🌟 My Review

Saint Joseph, MO
Summary: The best of the 12, recommended for virtually all taxpayers, they have what is likely to be the most replete support of forms and schedules, although some things are later on in the process, and I did notice some glitches that confused me but didn’t affect my returns, which were correct once I was finished. Also, even though they state that they require a minimum AGI of $14,000, they still allowed me to file with less than that – for free. In fact, they gave me the choice of going back to IRS.gov, free-filing, or paying! Although you’ll need some understanding of taxes, I found this was a really good experience aside from the odd ordering of things.


TaxAct®

🌟🌟.5 My Review

city,state
Summary: The interface is a pleasure to use, but it is suitable only for simple returns unless you’re willing to pay to upgrade. Despite the interface, you do need to know things about your taxes – I wouldn’t have been able to fill out my return correctly otherwise. As a result of their “incentive” to pay, there was no way to accurately test this “free” site based on the scenario I’ve devised. Claim on their website: “9 out of 10 customers would recommend TaxAct.*” (but that is from 2013!).


TaxSlayer "American Pledge"

🌟🌟🌟🌟 My Review

TaxSlayer LLC
Evans, GA
Summary: Recommended for most filers. Easy to use for federal, manual entry for state, some common credits (e.g. additional child credit) aren't available, and some unusual ones I tested aren't all reportable, either.


TurboTax

🌟🌟🌟🌟 My Review

Intuit
Mountain View, CA
Summary: Recommended. Easy to use, suitable for most filers, one of the few with virtually no errors.


Important Note about the e-File Logos

These are from the IRS:

I found a wide variety of "authorized IRS e-file" logos on many sites. I don't know where they got them. NONE of these sites (or the many others I saw) are authorized by the IRS. Note that Logolynx isn't a tax site, though.


logolynx.com

ez2290.com

tietax.com

file-tax.net

goldbergtaxes.com

tindalassociates.com

mfgtaxservice.com

1099cloud.com

elpasotaxpreparation.com (Centennial Income Tax, LLC)

maximtaxservices.com
I could make a very long list of companies that SEEM to be illegally representing themselves as authorized e-filers.

And many more that didn't claim to be authorized...

brandsoftheworld.com

cpa-ri.com

form990.org

The point is - if it isn't listed on IRS.gov (and, for some, even if it is) - be careful!



If you see any incorrect or incomplete, or you want to comment or give feedback, please leave a comment. I had a problem with the editor blitzing some of the content when I saved it. This series of articles took me 1.5 weeks of solid work for more than 12 hours on most days. Please show your appreciation!



If you appreciate this article, please 🏅upvote/like👍, 🤩resteem/share and share it to Facebook, Twitter, Reddit, LinkedIn and wherever else you can!!

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Hi reveurgam,

This post has been upvoted by the Curie community curation project and associated vote trail as exceptional content (human curated and reviewed). Have a great day :)

Visit curiesteem.com or join the Curie Discord community to learn more.

Please check out my updated version of my article as I had to reformulate it into separate articles due to exceeding the 65,000KB limit, and I also improved on each return by adding more information. :)

Thanks a lot for having the time to make make this great review. I must say, I didn't know about IRS and your review this day has made me know a lot.
I really enjoyed reading your blog and I hope to see more amazing piece from you soon

Thank, Ferrate! I appreciate you kind words and I am glad that my article was helpful to you!

You are humbly welcome

Posted using Partiko Android

And hopefully we'll get to experience "we know how much you made, we'll just take 1% from everyone automatically" before we die

LOL! If only the IRS would only take 1% and fire all the politicians who are getting money from lobbies!

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