CLEVELAND - We looked at 40 online tax programs, and read all the fine print in search of tax software that will help you file your federal and state taxes for less than $20.
"You almost feel like the $15-25 ones aren't going to be as good," Mary Beth Wagner explained.
Last year, Wagner spent more than $70 self-preparing her return online. We found nine programs online that charge less than $20 for most returns. Wagner agreed to try two.
"The lower-priced ones I feel like I'm going to have to do more work trying to figure out if I have everything filled in," Wagner said.
More work is definitely not what Wagner needs as a working mom of two young children. The family's tax form isn't complex but there's a lot to itemize. They have an HSA, 401-K, daycare expenses, charitable donations, and mortgage interest.
Plus, Wagner is taking the tax credit for new energy efficient windows.
Tax Act put to the test
Minutes after Wagner opened the programs, she found a handy tool on TaxAct's free federal software.
"I was able to import from a pdf file previous years returns," Wagner explained.
That's a time saver, and it works even if you didn't file with TaxAct last year. Wagner said she also found a time killer.
"The questions were hard to follow. It was just the way it was phrased. It kept prompting me to upgrade to deluxe for more tax tips and help," Wagner explained.
After an hour, Wagner gave up and upgraded for $9.95. With the federal upgrade and state return, TaxAct cost still cost only $17.95.
"Absolutely worth the upgrade," Wagner said. "As soon as I upgraded, it was prompting me for things I had missed."
A Tax Act spokeswoman said the TaxAct Online Free Federal Edition and Deluxe have the same interview questions. The extra tools are the difference like Donation Assistant and TaxTutor Guidance.
FreeTaxUSA put to the test
Next up, FreeTaxUSA. It also offers a free federal return. Wagner liked this free version.
"The questions were simplistic it was step by step as easy as you could ask for," Wagner explained.
The total for FreeTaxUSA was $9.95.
Self-prepared returns compared with CPA return
We know both returns are right for your budget, but are they factually right?
Howard Kass is a certified public account with 30 years experience. He's a partner with Zinner & Co., LLP . He's also a member of the Ohio Society of CPAs . He prepared an independent return and then we shared the two self-prepared returns with Kass so he could compare all three.
"I think she did a pretty good job," Kass explained. "It certainly gave me more respect for some of the self-prep options on the market."
With FreeTaxUSA, Wagner got the state return right, but her federal refund was $50 less than it should have been.
"She failed to enter the prior year state income tax payment," Kass said.
A FreeTaxUSA spokesman said taxpayers get free audit assistance, but in this case the audit did not pick up the income tax mistake because it's possible someone would have $0 of income tax.
Kass found a few other minor mistakes on the return, but nothing that would have changed the refund.
Wagner only made one mistake with TaxAct, and it would have cost her just a dollar. She was prepared to pay the state a dollar too much, which Kass said is due to an issue with rounding.
"I can't tell you when I saw his number I was like I have the same number," Wagner remarked comparing her returns with the CPA prepared returns.
We looked at 40 tax preparation software programs to find you the cheapest programs. While cheap is important, make sure you check out the program before you select it. Every one is made differently and offers different features. Most don't charge a fee until you are ready to print or file, so you can always switch providers if you start one you don't like.
If your adjusted gross income is $58,000 or less, you may be able to file your federal return for free. Free Filing is made available by the IRS and its partners. There are age requirements as well with many of these free options, and the state is extra in Ohio. In some states, the state is free. In Ohio, the cheapest Free File provider charges nothing for the federal return and just $4.95 for the state return.
Once you find a software program you like, type the company's name and "coupons" or "deals" or "discounts" into a search engine to see if there are more ways to save. Some sites even give you a discount if you friend them on Facebook.
Reduce your digital footprint
Before you file, make sure you set your browser to "private" browsing so you reduce your digital footprint . Our investigation in November showed it's easy to leave behind a digital footrpint. SecureState analyzed an average computer user's system, and found the family's social security number and tax