Is Free Tax Preparation Really Free?

Once again, tax season is upon us. And with it comes the endless documents, the confusing forms and the endless thumping of the impending deadline.

Adding insult to injury, he days of sitting down with pen, paper and the IRS instruction book are long gone. Now, even those with the simplest returns need the help of a trained tax preparer or tax software to correctly and efficiently file their returns, sometimes adding hundreds of dollars in expenses to your annual tax burden.

The good news: Every major tax preparation software company now offers an online version that can make doing your taxes faster and easier than ever before. Better still, many offer a completely free version too! But beware, free versions are often severely limited in what they can handle so make sure you understand what you need before free tax preparation winds up costing you $100 or more!

TurboTax is the #1 rated tax preparation software as well as the undisputed market leader. Its GPS-style interview helps you easily navigate through even the most complex tax issues.

What's Free: 1040EZ and simple 1040 returns as well as free federal e-file. If you have very simple taxes, TurboTax Online Free Edition can help you complete your taxes in less than an hour and have your refund in your account in just 8 days!

What's Not: Add just a little complexity to your return, and the Free Edition won't suit your needs. If you have investment income, own your home or a business, or make substantial charitable contributions, you'll need to upgrade to a more advanced version of TurboTax. Plus, state tax return preparation and filing costs extra as well, starting at $27.95.

Tax Act offers genuinely free tax preparation for nearly everyone.  It offers full featured tax software that doesn't charge extra for incorporating more complex schedules or situations into your return.

What's Free:  You can prepare any kind of federal return and e-file absolutely free.

What's Not:  If you want to import data, want analysis on tax-saving strategies, or need much assistance at all, you'll need to upgrade to the Deluxe version for $9.95.  State returns cost an additional $8.00 (including e-file) which is perhaps the best deal around for state tax preparation.

The long-time leader in tax preparation now overs powerful online tax services as well.  If you're looking for in-depth and personalized advice, H&R Block is the service to turn to, with online tax advice supplemented by phone and in-person support from experienced tax preparers.

What's Free: Once again, you'll need a pretty basic return to qualify for the free product. If you qualify to file the 1040EZ, H&R Block at Home will help you do it very quickly and easily.

What's Not:  If you own a home or have any investment income, you'll need to upgrade to the $29.95 Deluxe Edition.  People who are self-employed or have real estate investments require the $49.95 Premium Edition, which does include a valuable live tax advice session with a trained advisor.  State tax returns will cost an additional $29.95 too.