Report: Has TurboTax Tricked you?

If you make less than $66,000 a year, you can prep and file your taxes for free using commercial software on popular tax preparation sites.

But there’s a good chance you didn’t know that. You can thank some of the makers of tax preparation software for that.

These companies have spent millions lobbying in order to prevent the IRS from providing its own free, tax preparation software.

If you look hard enough, you might be able to find a “free file” option on websites like TurboTax, but it’s not easy.

ProPublica investigated and walked through the maddening process of trying to use the “free” software option with TurboTax.

Did you know that if you make less than $66,000 a year, you can prepare and file your taxes for free?

No? That’s no accident. Companies that make tax preparation software, like Intuit, the maker of TurboTax, would rather you didn’t know.

Intuit and other tax software companies have spent millions lobbying to make sure that the IRS doesn’t offer its own tax preparation and filing service. In exchange, the companies have entered into an agreement with the IRS to offer a “Free File” product to most Americans — but good luck finding it.

Consumer groups have long argued that the IRS should offer its own free, online tax preparation and filing, as many other countries do.

But Congress is now moving to put the Free File program into law, including its restriction on the IRS creating its own free service. We wrote about that earlier this month and the opposition to this provision by freshman Democratic Reps. Katie Hill, Katie Porter, Alexandria Ocasio-Cortez and others. The House ultimately passed the bipartisan Taxpayer First Act, which also contains some provisions that consumer advocates support, such as restrictions on private debt collection of unpaid taxes.

Now the Senate is considering the bill. Its sponsors have argued that it doesn’t tie the IRS’ hands, but outside legal experts we’ve spoken to disagree. The text in the bill codifying the Free File program has long been sought by lobbyists for Intuit. (continued)

You can find out more about this and where to find the “free file” options here: Here’s How TurboTax Just Tricked You Into Paying to File Your Taxes

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4 thoughts on “Report: Has TurboTax Tricked you?”

  1. Tried Turbotax but when I entered my Interest for US saving bond they asked for over $100 to file. Went back to Credit Karma and did for free.

  2. Sheryl,

    Used Credit Karma for the first time this year for taxes. I make over $66,000 per year and process was smooth and electronic filing for State and Federal was free. I am not endorsing them but it was a good experience. I also did my taxes by hand as a check (I have an accounting degree and several tax courses over the years) and things were correct.

  3. Helping a friend do hers and she only made $12,000 but had a 401k contribution on her pay stub and so when I entered it Turbo Tax said they will charge me $59 to file that form and I couldn’t figure out how to go back and take it out!

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