Last year, I posted “Don’t Let TurboTax Free Edition Fool You—You Probably Want FREEDOM Edition,” and it is one of the most often viewed posts on this site. Here’s the update for 2010. In short, before you try the Federal Free Edition, make sure you don’t qualify for Freedom Edition, which will allow you to file more than 1040-EZ and also allow you to file your state for free (in participating states).
Freedom Edition: Do you qualify?
- Your AGI is under $31,000 (same as last year)
- You are/were active duty military in 2010 with an AGI under $58,000 (up from last year)
- You qualify for the Earned Income Credit (EIC) Find out if you qualify at IRS.gov
If any of these are true for you, try the TurboTax Freedom edition.
If you do qualify, you can also file for free in these states: AL, AR, AZ, GA, IA, ID, KY, MI, MN, MO, MS, NY, NC, ND, OK, OR, RI, SC, VA, VT, WV.
What are you waiting for? Head over to the IRS Free File portal today!
The IRS Free File program
TurboTax Federal Free is not associated with the IRS’ Free File program, which allows anyone with an Adjusted Gross Income (AGI) of $58,000 or less e-file for free, including some state returns. TurboTax Freedom is.
TurboTax Freedom has stricter limits than the Free File program, so you may want to explore your options and choose another online preparer if your AGI is over $31,000.
The Free File page can help you choose the preparer that is right for you. Make sure to check if your chosen preparer will allow you to file your state income taxes as well.
More good news: because the normal deadline falls on Emancipation Day, meaning gov’t offices are closed to receiving mail and processing returns, you have until April 18 this year to file your taxes.
What’s the real difference?
For the most part, both programs step you through the process of filing, helping you make sure that you claim all the credits and deductions that you qualify for. Freedom Edition, since it isn’t restricted to Form 1040-EZ, has many more options and will allow you to itemize deductions, claim small business income, and capital gains or losses. Federal Free edition is very limited in what it will allow you to claim beyond the standard exemptions. You can’t itemize deductions at all.
What made me notice the difference is the cost of filing for state income taxes: Freedom Edition allows you to file states for free, so long as they also participate in the Free File program. Federal Free edition charges you $27.95 for each state.
Freedom edition does not have as nice of an interface, though, so if you want to be wowed by pretty graphics (at the expense of not filing for free), it’s not the program for you.
I am not a licensed tax preparer or financial professional of any kind. If you have questions about your taxes, you should consult a qualified tax professional. This is simply my observation based on my own research for filing my own taxes. This is also in no way sponsored by the IRS or Free File program. I just want everyone to be as educated as possible.
4 thoughts on “TurboTax Free vs. Freedom, 2010 edition”
Just wanted to add that, with the Free edition, if you accidentally upgrade – or even intentionally, assuming you can downgrade and start over if you need or want to – to anything other than the “Free” edition, you can’t undo it. You have to apply for a one-time downgrade code (that’s right… apply… and there’s even a blurb on their website stating that if you’re denied, they’ll give you a reason for it), and next year you’ll be stuck using whatever it was that you upgraded to this year (be it Basic at $20, Deluxe at $30, or upward).
If you want to go back to the Free edition the year after, you’ll have to start a new account (which ends your all-in-one-spot access to prior year documents).
I am currently rather irritated (I cleared my return and started from scratch a whopping FOUR times trying to “reset” to the Free edition before I figured out I wasn’t losing my mind and contacted customer service). Despite my frustration, I decided to Google the difference between Free and Freedom Editions, and I’m glad I came across your article. I didn’t mind doing my state taxes out by hand (because I’m not going to pay $37 to file them!), but knowing that the Freedom Edition will file them for me (my state participates) will relieve some of the urge to kick people that I’m feeling right now.
Whoops. I lied. My state doesn’t participate, but it’s only $14.95 to file through Freedom Edition, vs $27.95 (or $36.95 in the Deluxe Edition!) on the regular website.
That’s okay, I can take the extra ten minutes and go to my state’s website and e-file there for free ;)
If your state is one of the free ones, access the tax programs through your state income tax website. Go to the free efile and it should show you the various companies that are free. We could only get a free state efile if we accessed turbotax from here. I did my son’s taxes using freedom edition, and it was going to charge 39.95. He said if he had the money he’d do it. So I thought it was a way for them to make money instead of being able to select the states that are free, like last year.
I knew it was supposed to be free and was rather mad that they were going to charge, so I read on their website that you have to access through your state. Once I did that it came to state, it was free to efile and I was able to send both federal and state at the same time. Please let your readers know!!!! Thanks!
Also, if anyone goes to have their tax prepared, tell them to be aware of getting your refund right away. If you efile, you’ll get your refund the same amount of time as say, H&R Block with their fast or rapid refund. Except they will charge you for it. So be sure to efile without their rapid refund loan program!!! A friend of mine filed with them last year and they charged him $400 to get his taxes done and with the loan. Otherwise, he would have been able to free file and would have gotten the full 1100… Hate companies that prey on the masses.
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