Pros / There’s no cost for federal or state returns.
Cons / Audit support is not available.
Verdict / Credit Karma’s tax software is truly free for federal and state returns, no matter the complexity. It may not be ideal for some filers since it lacks other add-ons, like professional help with preparing your return.
If price is your main concern, Credit Karma is the best choice. This is our pick for the best value tax software. While many other programs have free options for basic returns, Credit Karma doesn’t charge a thing, no matter how complex your taxes are. It’s also the only software that lets you file your state taxes for free. Other programs, like Turbo Tax and H&R Block charge to file. The other companies charge between $12.95 and $37 to file state returns.
In order to file your taxes, you’ll need to sign up for an account with Credit Karma and its credit report service. This is another free service that lets you track your credit scores and learn how to improve them. If you’ve put a freeze on any of your credit files through Experian, Equifax or TransUnion, you’ll have to lift those before signing up.
Our reviewers filled out a sample return using Credit Karma. We found it to be among the most user-friendly programs we used. Like the best programs it lets you import your W-2. You’ll just enter the Employee Identification Number (EIN) listed in box b of your W-2. Credit Karma then auto-fills the forms with your income information. It’s a good idea to double check and make sure everything was imported accurately.
Once this information has been added, Credit Karma uses it along with your profile information to make recommendations for tax deductions and credits you may be eligible for. It also asks you a series of questions about home ownership, investment income and medical expenses to see what else needs to be added to your return.
Navigating through the program is easy. Each section is clearly marked and backtracking to add or correct something is simple. An important thing we looked at for each of these programs is how well they notify you about errors in the return. Before you file, Credit Karma shows you any errors and walks you through the steps necessary to correct them.
One nice aspect of being a free service is the lack of upselling. Some of the other programs we used were very intrusive with screens trying to sell us audit protection and other services.
Credit Karma did not allow us to complete a state return because the state forms were not available yet. This wasn’t uncommon as several other programs wouldn’t let us submit state returns. But Credit Karma was the only one that didn’t let us fill out our state return and wait to submit it later.
There’s no audit protection plan or audit support available through Credit Karma. Protection plans include representation and assistance gathering documents. Audit support usually means that the company offers guidance and answer questions if you’re selected by the IRS for an audit. This isn’t a deal breaker – audits are very rare. Most returns that don’t have a lot of self-reported income won’t be audited.
You can elect to receive your refund through direct deposit or a check. Direct deposit is the quickest way to get your money, and a check usually takes several weeks to arrive.
Credit Karma offers an Earlybird Advance that can give you access to your refund immediately. You apply when you’re filing your return. If you’re found eligible, you’ll receive the amount you’re approved for loaded onto an American Express Serve card. When you get your federal refund, the advance will be deducted from it. There’s no interest or fee for this advance, although the card does have fees if you use out-of-network ATMs.
Credit Karma is the tax software with the best value. There’s no cost for federal or state returns. Unlike the free filing services other program have, you can file free with Credit Karma no matter how complex the return. You’ll need to sign up for a Credit Karma account, which includes credit monitoring.