All those freefreefreee tax commercials piss me off to no end. They are lying. The tax software you need probably isn't freefreefree, but you're still required to file taxes every year. What happens if you can't afford that lying freefreefree tax software? Well, the IRS will come knocking at your door for everything you own.
If you’re a freelancer, you have probably been bombarded by all those free tax software and filing commercials, and you are probably wondering if completing and filing your taxes is really free. The short answer is NO! for the majority of tax software companies. I actually found a couple that may truly be free, but it's not the tax software companies that you hear about all the time, and I'm not sure how reputable they are. Listed prices were as of 2019. I left them as they are so you can see the price hikes. As if they were affordable before....
The Biggest Offender and False Advertiser: TurboTax
Free Free FreeFreeFree
Laugh Laugh LaughLaughLaugh
Turbotax wants you to believe that you can prepare your taxes and file your federal and state for FREE. Unfortunately, if you are a freelancer, this statement is not true. It only takes looking at their list of exclusions to determine that you are not covered by this:
Situations not covered in TurboTax Free Edition include:
- Itemized deductions (Schedule A)
- Business or 1099-MISC income (Schedule C)
- Stock sales (Schedule D)
- Rental property income (Schedule E)
- Credits, deductions and income reported on schedules 1-6, such as the Student Loan Interest Deduction
If you dig a little deeper, you'll actually be quite offended. The very first FAQ question, tells you how this service that you cannot use is being paid.
How does TurboTax make any money?
Customers with more complex tax situations will file with our other TurboTax products that provide all the right forms and guidance they need.
Yep, that's right, you, my freelancer friend, are paying for these "free" filers with the super expensive tax software that you will be forced to purchase.
If you are wondering just how expensive your taxes are going to be this year if you choose TurboTax, just take a look at this:
Your self-employed tax software will cost you $89.99 right this second, if you choose TurboTax. That is only to file your federal. The state is an additional, unlisted fee. This is also the most expensive tax software, and Turbotax won't let you choose another one because you have 1099-MISCs and business income and expenses. They are basically charging freelancers what they would charge larger businesses that aren't sole-proprietorships. You're also paying for that free tax software you can't use.
Free Free Free, my tail end. NOT FREE
H&R Block - Is Their Free Software Actually Free for FREElancers?
Nope
While H&R Block does offer a FREE tax software package, it doesn't include the ability to add 1099-MISC or business expenses. You must have W-2s only, and you may have retirement income, social security income and student loan interest. In other words, it's not free for freelancers, and once again, the self-employed must purchase a much higher level of tax software. if it makes you feel better, it's not the highest priced taxed software, it's the second highest priced tax software at $79.99 ($104.99) and $36.99 per state. In other words, you are going to pay a minimum of $116.98 to file your taxes. Hope you paid your quarterlies, case YIKES, if you also owe.
TaxAct: Is TaxAct's Free Tax Software Actually Free for Freelancers?
Again, we have a resounding NO!
While TaxAct does offer a free version of their tax software, it's not for freelancers. It's for people who have W-2 income and no business expenses or income, and they certainly don't have any 1099-MISCs. What's interesting about this one is that you can be married, but you cannot have kids or dependents. That's $.9.95.
In fact, their basic software line-up doesn't even include a tax software package for freelancers. It stops at Premier+, which is $34.99 plus more for each state.
So, where is the software for freelancers?
It's under a different menu item called "Self-Employed Taxes", but it's definitely not Freefreefree. It's $49.99 and $39.99 per state, which means as a freelancer, you will be forking over a minimum of $89.88 to file your taxes this tax season. If it makes you feel any better, they've actually lowered this price. It was closer to $80 just to file the federal last year. It was an additional $36.99 to file the state, and so far, these guys are the cheapest, but they are still a far cry from all those freefreefree commercials.
Jackson Hewitt - Are These Guys Free for Freelancers?
Buahahahhaa NO.
These are the guys you actually see all over Walmart. I think. It's actually been a while since I've been in a Walmart store.
Jackson Hewitt does offer a free software package, but it's for single people or couples with no children who have incomes under $100,000. You can only take the standard deduction, and they only accept W-2s and unemployment as income with their free tax software.
Freelancers must purchase their $49.99 (1$09.95) package. State filing is charged at $36.95 per state. This makes them slightly cheaper than TaxAct, but not by much, and the minute they stop their sale, they're the most expensive tax software so far. Definately not Freefreefree.
Other Tax Software Companies
Credit Karma: Free Premium Filing
It says it's free. In order to find out more and if it's actually FREE for freelancers to file, I'd have to create an account. It does say it works for individuals who have a side-hustle. The end conclusion is - I don't know if this is free for freelancers. If you've used this as a freelancer or tried to, let us know how it worked in the comments.
Liberty Tax: Premium
$52.47 for Federal
State Additional - Not listed
Free TaxUSA: Deluxe
It looks free with the state being an additional $12.95 for the Deluxe version.
End result: You can find extremely cheap tax software solutions as a freelancer, but they aren't with the big three or four. You'll probably have to go with a lesser-known tax software provider in order to get affordable tax software. Is that a good idea? The choice is up to you.
