Free Online Tax Preparation Compare To Paid Services?

If you have an Internet connected computer, you can use one of the free online tax prep services to prepare and file your personal federal income tax return. In addition to the very popular online tax preparation sites like H&R Block's Tax Cut, Tax Act and TurboTax there are many other websites that allow you to file free income tax returns. However, before you use one of the free services, you may want to consider what the paid services offer.

Differences in Free Tax Preparation and Paid Tax Preparation

When it comes to online tax preparation sites, you will generally find that they all offer a free service and an upgraded paid service. If you live in a state that does not charge a personal income tax, the free service may be all that you need. While many of the state these websites provide free federal income taxes preparation and filing assistance, they do charge for helping with state income tax returns. However, if you choose to use the paid service on one of these websites, the filing of the state income tax return may be free as well.

Another advantage that the paid services offered by these websites have over the free versions is the amount of online advice and help that the system provides. The free versions of the tax preparation and filing software generally offer only limited amounts of help in determining what types of credits and deductions may be available to you.

On the other hand, the paid services of the better income tax preparation websites actually analyze your return and help you by pointing out possible credits and deductions that you may be eligible for. In the end, the paid service may save you a lot more money than it costs to use the service by helping you find more credits and deductions and even help increase your refund.