TurboTax Actually Still Has a Free Edition — But It’s Very Limited

We all know how burdensome filing taxes can be, but since when did it get so expensive? Take TurboTax for instance, which charges up to $119 and higher for do-it-yourself filing, and even more if you want tax assistance. Add business income and expenses, and you’re looking at paying nearly $200 or more.

It’s costly enough to cover taxes annually via paychecks, with many still left with a tax bill they have to satisfy when they file taxes, so why doesn’t TurboTax longer offer the option to file for free? Well, it actually does, but there are a lot of limits in terms of what qualifies you for a free return.

Here’s a breakdown of the types of situations where TurboTax will allow you to file your return for free, and the more common ones that block you from the Free Edition.

While TurboTax opted out of the Free File Program, which is a partnership between the IRS and tax preparers, it still offers its own free filing service.

For context, TurboTax announced via its website back in July 2021 that it was no longer part of the Free File Program “due to limitations within the program and conflicting demands from those outside the program.”

Under that program, select filers, typically based on income limits, could file federal and sometimes state tax returns for free. While it did offer broader access to free filing, TurboTax didn’t completely do away with the option to file returns for free, but it did set quite a few limits on who can take advantage of it.

Under the TurboTax Free Edition, only basic returns can be filed for free.

That means you can only have W-2 income, interest, dividends, or original issue discounts like a 1099-INT that doesn’t require a Schedule B, and you’re taking the IRS standard deduction. It also allows filers to claim select credits, with the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) as the two acceptable ones.

If you have student loan interest deductions and are filing a Schedule 1-A, that’s also allowed.

But that’s the extent TurboTax will let you go if you want to file your tax return for free. If your situation involves self-employment income or itemized deductions, you’ll likely be placed into a tiered pricing structure based on the forms you need to file.

While many people assume their tax returns are basic considering they don’t have a complex situation like running multiple businesses or investing in tons of stocks, they quickly find they don’t qualify for TurboTax Free Edition. This can be because they are self-employed or want to itemize their deductions, such as listing medical expenses or charitable contributions.

Some of the other reasons a person won’t qualify to file their taxes for free with TurboTax include having to report unemployment income on a 1099-G, having business or 1099-NEC income (this includes self-employed workers, freelancers, or gig workers), or having stock sales, as noted on TurboTax’s website.

Other reasons include income from rental property or property sales, or credits, deductions, or other types of income that can’t be filed using the forms listed under the Free Edition qualifications we mentioned above.