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.