Credit Karma Tax – How You Can ACTUALLY File Your Taxes for Free This Year
Are you tired of spending money to file your taxes online every year?
Do you wish that there was a FREE tax preparation software that made the process easy?
Would you be shocked if I told you that something that great already exists?
Read on to learn about Credit Karma Tax, how it works, how it compares to its big competition, and how to file your taxes for free this year!
What is Credit Karma Tax?
But if you’ve logged into Credit Karma any time since 2016, you’ve probably noticed that they’ve branched out into tax preparation as well.
Credit Karma Tax is a tierless, free tax software that is accessible through your free Credit Karma account.
Credit Karma Tax has features to ease your pain, including Smart File.
Smart File streamlines your tax process by only showing you the tax forms that you actually NEED.
And instead of typing in each line of your W-2, you can just upload it by taking a picture.
Like other tax preparation companies, Credit Karma Tax has helpful guarantees to make sure you’re taken care of.
They have a Maximum Refund Guarantee and an Accurate Calculations Guarantee and will represent you if you undergo an tax audit.
Can You ACTUALLY File Your Taxes for Free with Credit Karma Tax?
Credit Karma is truly a unicorn: it is an entirely FREE tax software.
It is FREE- and free doesn’t mean low-quality.
You can use Credit Karma Tax to file both your federal and state returns, with no upsells or fees.
And while there are always some drawbacks to free tax filing software, Credit Karma Tax supports more unique tax situations than most free softwares.
If you have income from a rental property, student loan interest, or make income as an independent contractor with a 1099, Credit Karma tax supports you for FREE.
Plus, you can file your taxes straight from your smartphone.
Alright, What’s the Catch?
While I wish that there was truly a perfect free tax software, Credit Karma Tax does have a few limitations.
First, you will have to sign up for a Credit Karma account to get access to Credit Karma Tax, which may be a turnoff for you.
(Frankly, I’ve had a Credit Karma account for checking my free credit score for years, so this isn’t a con for me personally.)
Second, Credit Karma Tax is not available everywhere.
Credit Karma Tax supports e-filing in 40 states and the District of Columbia.
And if you have a super complex tax situation, Credit Karma Tax is probably not for you.
But What About TurboTax?
Both Credit Karma and TurboTax offer free tax filing options.
BUT there’s one big difference: TurboTax’s free product can only handle simple tax returns.
If you have a more complex tax situation, you’ll have to pay somewhere between $60 and $200.
I’ve used Credit Karma Tax since 2016, and every year I’ve compared my potential return to TurboTax.
And each year, Credit Karma has offered me a higher income tax return.
Since I can’t justify the price of TurboTax (and the lawsuits against TurboTax make me nervous), I’m sticking with Credit Karma.
Note: Intuit, which owns TurboTax, acquired Credit Karma in December 2020. It isn’t clear how Credit Karma Tax and TurboTax will interact in the future.
How Can I Sign Up for Credit Karma Tax?
You can start filing your taxes with Credit Karma Tax in 4 easy steps:
- Create a Credit Karma account. Make sure you have the last 4 digits of your Social Security number easily accessible.
- Log into your account.
- Click on the “Tax” thumbnail or click on the “Tax” button in the menu.
- Answer questions about your tax situation.
And you’re on your way to filing your taxes for FREE!
BONUS: Free Printable Download! Your Ultimate Simple Tax Preparation Checklist
*I am not a tax professional. Consult your tax professional to confirm if additional items are required for your specific tax situation.*
How are you planning on filing your taxes this year? Are you filing your own taxes online with Credit Karma Tax or Turbotax? Or are you planning on hiring a tax professional?
Share your answer in the comments!