Don’t Let TurboTax Free Edition Fool You—You Probably Want FREEDOM Edition

TurboTax touts their Free Edition’s free-ness. Free to use, free to file. Free for Federal, that is (1040EZ only). Then, they try to up-sell you on filing State for $27.95. What they probably don’t want you to notice is that the Free Edition has nothing to do with the Free File program offered by the IRS, which TurboTax does participate in. But I noticed. Especially one year in while in college when I had to file in three different states, all of which allowed Free E-Filing.

Some of the numbers have changed. View the 2010 update.

Do You Meet One These Criteria?

  • AGI of 31k or less, or
  • Active Military with AGI of 57k or less, or
  • you qualify for the Earned Income Credit

Congratulations, you should probably use Freedom edition if you are planning on using TurboTax.

The IRS Free File program has its limits, as does TurboTax Freedom edition. For the former, you’re only eligible if you had an AGI of $57k or less in 2009. For TurboTax, it’s even more stringent: $31k AGI (for single filers). Additionally, if you own a house, own a business, have a lot of investments/capital gains/losses or donate a lot to charity and you don’t pay attn. to tax laws on your own or don’t care to, neither of TurboTax’s free editions are right for you. There are other companies that offer robust solutions through the Free File program that don’t have the same income limits (Freedom) or restrictions to 1040EZ (Free).

Why should I care?

I don’t know about you, but I don’t want to pay $30 to file my state taxes. Freedom edition allows you to do it for free in states that allow for free e-filing.

Additionally, while 1040EZ will suffice for some people, many others have more difficult tax needs and thus need access to the 1040, which is provided by the Freedom edition, but not Free edition.

But, I don’t see that option on TurboTax’s Web Site!

Yes, they’re rather sneaky like that. In order to access the Freedom edition, you have to go through the IRS Free File Portal. The IRS provides a nice tool to help you choose a preparer, but you can also choose to go to TurboTax directly. The link to TurboTax will allow you to use the Freedom Edition, where things really are free.

I can’t speak with any amount of authority, but I believe the same process is true for some of the other tax companies as well. So, if you do have an AGI under $57k, it’d be smart to head over to the IRS Free-File page and access the online tax applications from there. They provide a list of participating companies, the limitations of each, and a link to the correct free edition.

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5 Responses to Don’t Let TurboTax Free Edition Fool You—You Probably Want FREEDOM Edition

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  1. Anita

    4 Apr 2010 10:15 pm

    Wow! Great information. Wish I would have found out about Freedom edition BEFORE I efiled my Federal using Free edition. I probably can't use the Freedom for State now, can I?
    Also, if you happen to know…in what way does turdotax charge for the state form? Deduct from refund? And when? Upon submission or right when you start filling in the form?
    Any info would be greatly appreciated :)
    Thanks.

    • rae

      6 Apr 2010 10:16 pm

      Hi Anita,

      I'm not positive, but I think you may still be able to file just state through the Freedom edition for your state taxes. You'll have to fill in all of your W-2 and personal info, but you should be able to skip past the federal and just do state. But I'm not 100% positive about that.

      To charge you, they request credit card information. Deducting from your return isn't possible because Turbo Tax never handles the money… it is sent straight to you from the state.

      They charge you after you complete the form. You aren't able to print or file without paying.

  2. Nadine

    24 Mar 2011 10:05 pm

    Hi,
    i was filing my tax and googled a question and your wesite popped up, sure happy it did because i was at the end of filing with Turbo Tax and they asked me to pay, to my surprise because i thought it was FREE.
    But i get it now i had to go to the IRS web and thy gave me the link to different websites that affers it for FREE and Turbo Tax was one of the but i choose H&R Block it gat me the exact amount as Tubo Tax was offering,so it worked out.

    Thanks a Million you saved me $30

  3. Chuk

    22 Feb 2012 12:35 am

    Yeah, i messed around with all this and found that even when you go through the irs’s website, turbotax will ALWAYS bring you to their payment page! Pretty sure they call this “False Advertisement” and can actually get you sued, cant it? Im sure the irs wouldnt be too happy if they found out these pricks are making money off them too. Fuck turbo tax, use one of the others.

    • Rae

      22 Feb 2012 11:04 am

      Sending you to a payment gateway, even for a free item or service isn’t shady—it’s standard practice for many ecommerce systems and accounting methods. This is one gripe I don’t (and won’t) have with TurboTax, so long as that total is $0.