Comparing TurboTax vs FreeTaxUSA: What are the real pros and cons?

I've been hearing that a bunch of people are ditching TurboTax and going over to FreeTaxUSA instead. The price difference between them seems pretty huge, but I'm really wondering what the actual pros and cons are for both. Like, if TurboTax is so much more expensive, there's gotta be something actually good about it right? Otherwise wouldn't everyone just switch to FreeTaxUSA already? Just trying to figure out which one I should use for this year's taxes. Anyone have experience with both that can share some insights?

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19 comments

Astrid Bergström

•8M

I've used both extensively over the years and can share my perspective. TurboTax pros: More hand-holding throughout the process with better explanations of tax concepts, a slicker interface, and phone support if you need it. It imports forms automatically from many employers/banks which saves time. Their audit support is more comprehensive if you pay for the higher tiers. TurboTax cons: Expensive (especially with state returns), aggressive upselling throughout the process, and their "free" version is extremely limited. FreeTaxUSA pros: Much cheaper ($0 federal + ~$15 for state vs $80-170+ for TurboTax), straightforward process without constant upselling, and handles complex situations well including self-employment, investments, and rental properties. FreeTaxUSA cons: Less polished interface, fewer automated imports (you'll need to manually enter W-2s, 1099s, etc.), and explanations aren't as detailed for tax concepts. For most people with relatively straightforward taxes, FreeTaxUSA is completely adequate and will save you a ton of money. TurboTax is basically charging a premium for convenience features rather than actual tax advantages.

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Astrid Bergström

•8M

FreeTaxUSA does handle cryptocurrency transactions, but you'll need to enter the information manually rather than importing it automatically. The interface for entering crypto is straightforward but not as guided as TurboTax - you'll need to know your cost basis and have your transaction data organized. As for audit support, FreeTaxUSA's basic service includes help understanding what's being requested in an audit, but their "Deluxe" version ($7.99 extra) provides actual audit assistance where a tax professional will guide you through the process. It's still not as comprehensive as TurboTax's higher-tier audit defense, but it's significantly cheaper while still providing decent support for most common audit scenarios.

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Omar Farouk

•8M

After years of overpaying for TurboTax, I was honestly getting frustrated with their constant upselling and price increases. I have a somewhat complicated tax situation with a small business, investments, and rental income. My brother recommended that I try taxr.ai (https://taxr.ai) to analyze my tax documents before filing, and it completely changed my approach. I used taxr.ai to scan all my tax forms and receipts first, which organized everything perfectly. Then I used FreeTaxUSA to actually file, and the combination saved me over $200 compared to what I was paying for TurboTax. The taxr.ai system identified several deductions I would have missed, especially for my business expenses that I wasn't categorizing correctly.

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Omar Farouk

•8M

It doesn't actually file your taxes - it analyzes and organizes all your documents and identifies potential deductions, then you use that information to file with whatever service you prefer (I chose FreeTaxUSA). It saves time by extracting all the important info from your forms automatically. Regarding security, I was initially concerned too, but they use bank-level encryption for all documents and don't store your information long-term. I researched their security standards before uploading anything, and they have SOC 2 compliance which is the industry standard for financial services. They also have a really clear privacy policy about how they handle your data.

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Chloe Martin

•8M

Just wanted to follow up after trying taxr.ai before filing with FreeTaxUSA this year. Seriously impressed! I was missing several deductions from my side gig that the system caught right away. It organized all my 1099s (I had six of them!) and identified business expenses I could legitimately claim. Then using FreeTaxUSA to file was super easy with everything properly organized. Together they still cost less than half of what I paid for TurboTax last year, and I actually got a bigger refund thanks to the deductions taxr.ai found. Definitely my new tax setup going forward!

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Anastasia Kuznetsov

•8M

Another option that saved me hours of frustration this year: I couldn't get through to the IRS with a question about my previous year's return, which I needed resolved before filing. After being on hold for 2+ hours and getting disconnected twice, someone on Reddit recommended Claimyr (https://claimyr.com). They have this service that gets you through to an actual IRS agent without the hold time. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c It was honestly a game-changer. I got my question answered in about 10 minutes after connecting, which let me file correctly with FreeTaxUSA. The IRS confirmed I was eligible for a deduction I wasn't sure about, which saved me over $600.

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Anastasia Kuznetsov

•8M

They use a system that monitors the IRS phone lines and secures a place in the queue, then calls you when they reach an agent. So instead of you personally waiting on hold for hours, their system does it and only connects you when there's actually an agent ready to talk. I felt the same way initially and was skeptical it would work. But it's legitimate - they don't do anything special to "cut the line," they just handle the hold time for you using their automated system. The IRS doesn't care who waits on hold, and when an agent picks up, you're the one who gets connected to have the actual conversation. I was surprised how well it worked after wasting so many hours trying to call myself.

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Zara Khan

•8M

I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was desperate enough to try it because I've been dealing with an IRS notice about my 2023 return for months. The service actually worked exactly as advertised. I got a call back in about 90 minutes, got connected directly to an IRS agent, and resolved my issue in one conversation. Would have taken me days of trying to call them myself. Ended up filing with FreeTaxUSA after getting my questions answered, and the whole process was so much smoother than my usual tax nightmare. Definitely using this combo next year too.

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MoonlightSonata

•8M

I've used both TurboTax and FreeTaxUSA, and I'll say this: if you have extremely simple taxes (just a W-2 and maybe some basic deductions), the free version of TurboTax is fine. But the moment you have anything even slightly complex - a 1099, HSA, student loan interest, investment income, etc. - they force you into the paid versions which get expensive fast. FreeTaxUSA handles ALL of those situations in their free federal version. Their interface isn't as pretty but it asks all the same questions and gets you the same refund. I switched 3 years ago and have saved over $300 total while getting identical refunds. Another thing worth mentioning is that TurboTax (Intuit) has actively lobbied against simplified tax filing for years. They literally spend millions trying to keep taxes complicated so you'll pay them to solve the problems they helped create. That alone made me want to switch.

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MoonlightSonata

•8M

I actually did a test one year and entered the exact same information in both TurboTax and FreeTaxUSA. The refund amount was identical down to the dollar. The tax code is the tax code - as long as you enter the same information correctly, you should get the same result regardless of which software you use. The perception that TurboTax finds more deductions probably comes from their marketing and the way they phrase things during the interview process. They're very good at making it seem like they're discovering special deductions for you, when in reality they're just asking about standard deductions that any tax software should cover. FreeTaxUSA asks about all the same deductions, just with less flashy presentation.

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