Free Tax software that isn’t lying about being free
Credit Karma Tax is very different than the the other online free tax services in that it actually is free, and isn’t just pretending to be free. Lots of other services claim to be free but then they charge you for your state return, charge you if you want to get a copy of your return later, and charge you for anything else they think they can get away with.
Credit Karma Tax really is free with no hidden costs. This needs to be investigated. As a CPA, former professional tax preparer, and guy that loves free stuff I am just the right person to do it. So I did my rather complex tax return which included a rental property, a couple of regular jobs, moving expenses, and several side business to see what I thought.
How can Credit Karma Tax be free?
Advertisements of course. Credit Karma makes it’s living selling credit cards and they are going to use what they learn about you from your tax information to try to sell you even more credit cards.
So just how bad are the advertisements going to be? I’m willing to live with a few advertisements to get free tax software, but I don’t want to be buried in junk mail. To see just how bad the advertisements were going to be I read the privacy policy. No, really, I did.
Privacy Policy
We all know your not going to read the privacy policy so I read it. Here are the points I thought was interesting.
- They will use your information to send you advertisements. Oh, there’s going to be advertisements, that’s how they can afford to give away tax software for free.
- They may let 3rd parties see your information but those 3rd parties are bound to the same privacy rules as Credit Karma.
- They will not share your information for advertising purposes except for “affiliated 3rd parties”.
- Credit Karma will share your information to “affiliated 3rd parties”. The term “Affiliated 3rd parties” is not defined so who knows what it means.
Security
You REALLY don’t want all your tax information being hacked so I did the best I could at examining their security. My review was very limited because for obvious reasons nobody is going to tell you what their real security controls are. I searched the web to see if I could find evidence that an IT audit was performed and couldn’t find anything. The fact Credit Karma keeps this information private is to be expected.
The levels of encryption appear to be strong. Their login uses multifactor authentication, which meets the standards used by the banking industry for internet banking authentication. Not enough to prove your not going to get hacked, but I don’t see anything that concerns me I guess.
Doing Your Taxes
I was really impressed by the Credit Karma Tax software. I would go so far as to say it is my favorite tax software I have ever used, and not just because it was free. The web page was simple and easy to understand. The page loads were fast and smooth. It was easy to enter information. Overall, as good of an experience as can be expected.
I do have a couple of complaints about the experience. For one thing you can’t import your tax return from last year and have it auto fill all your information. That means going through the drudgery of entering names, addresses, social security numbers, and business information that you have already entered in previous years. This is Credit Karma Tax’s first year, and I assume I won’t have to enter it again last year. For the price of free, I guess it is worth entering all that information one more time.
My second complaint is that Credit Karma Tax refused to show me what my final forms looked like. After you enter all your information it summarizes it all for you but it doesn’t show you your actual forms until after you are completely done. I found this pretty obnoxious as I wanted to put my 1040 side by side with last years just to make sure I didn’t miss anything and it didn’t allow me to do this. I found it a little scary to have to hit the submit button without seeing the form. I am going to categorize this as the software’s only significant flaw.
A tip or two
There are two options for entering your information, the easy interview and the manual option. I preferred the manual entry option because I found it to be faster and easy enough it shouldn’t confuse anybody who has done taxes before.
When doing the manual option on the upper right hand corner your are going to see an option to View Full Form. Your going to want to select that. The default option is to break each form you enter into small pieces so you are only asked a few options at a time. View Full Form allows you to enter the whole form all on one screen which is much faster.
Summary
The pros are that its fast, easy to use, and free. The cons are that your gonna get advertised on. You can find Credit Karma Tax here.
Disclaimer
I received no compensation of any kind for this review. I mean, I did get free tax preparation software but they give that to everybody, so that doesn’t count.
