Free & Cheap Tax Software

The free-and-cheap US tax-software landscape changed materially 2024–26: IRS Direct File went from pilot to a multi-state program; FreeTaxUSA kept its quiet dominance among power users; Cash App Taxes continued offering free federal + free state. TurboTax lost its Free File partnership in 2021 and pricing got worse. For estate / inheritance tax see Inheritance & Tax Planning; for crypto-tax interactions see Rotki & Crypto Tracking; for self-employed bookkeeping see Freelance Bookkeeping (Wave); for the broader OSS personal-finance index see Self-Hosted Personal Apps; for SMB-business accounting see Accounting & Bookkeeping; for the budget side see Actual Budget.

The 2026 free / cheap tier

• ★ ★ FreeTaxUSA — free federal; cheap state (~$15); the power-user free pick for 2026; supports Schedule C, D, E, K-1, multi-state, AMT, ISO/RSU, foreign-tax credit, prior-year amendments. Quietly the best deal in tax software.
• ★ IRS Direct File — free federal; expanding 2024–26 from 12 to 25+ states; check coverage for your state for current year. Limited income types (W-2, SS, unemployment, simple investments); no Schedule C / E support yet. Best for simple W-2 households.
• ★ Cash App Taxes — free federal + free state; broader form support than Direct File; iffy UX on edge cases; owned by Block (Square).
• TaxSlayer Simply Free — free federal + state for basic returns only.
• H&R Block Free Online — free federal + state for basic returns; upsells aggressively.
• TurboTax Free Edition — free federal + state for simple returns; historically aggressive about pushing users to paid tier; FTC settled with Intuit in 2024 over deceptive "free" advertising.
• TaxAct Free — free federal; paid state.
• VITA (Volunteer Income Tax Assistance) — free in-person tax help for income < ~$64K; IRS-trained volunteers.
• TCE (Tax Counseling for the Elderly) — free; AARP Foundation Tax-Aide.
• MilTax (Military OneSource) — free for service members + recent veterans.

OSS / self-host tax tooling

• ★ OpenTaxSolver — free OSS; open-source US tax-form solver; reads input file, fills out federal + selected state forms; for CLI-comfortable advanced filers who want to understand their return at the line level.
  • http://opentaxsolver.sourceforge.net/
• PyTaxPrep — free OSS; smaller; less mature.
• DIY paper filing — free; the IRS publishes every form as a free PDF; mail it in. Slow but viable for very simple returns.

Paid tier (when paid is right)

• TurboTax Premium / Self-Employed / Live — paid (~$120–400+); polished UI; expensive; probably overkill for most.
• H&R Block paid — paid; cheaper than TurboTax; in-person option.
• TaxAct paid — paid; sometimes the cost / feature sweet spot.
• CPA / EA — paid (~$300–1,500+ for 1040; more for business). The right answer for: business owners, partnerships, multi-state with depreciation, big inheritance year, complex stock comp / RSU / ESPP.

When FreeTaxUSA is the right pick (★)

• ★ W-2 + Schedule C side income.
• ★ Investment income (Schedule D + B + 1099-DIV).
• ★ Rental property (Schedule E).
• ★ K-1 from a partnership or S-corp.
• ★ ISO / NSO / RSU / ESPP — handled cleanly.
• ★ Multi-state filing.
• ★ Itemized deductions (Schedule A).
• ★ Backdoor Roth (Form 8606).
• ★ Foreign-tax credit + 1116 / 2555.
• ★ Amended returns (1040-X).

When Direct File works (limited)

• ★ Single state, fully covered.
• ★ W-2 only or W-2 + simple 1099-INT/DIV.
• ★ Standard deduction.
• ★ Common credits (EITC, CTC, Saver's, premium tax credit).
• Not yet for: Schedule C self-employment, Schedule E rentals, complex investments, AMT, K-1.

Crypto-tax interaction

• Koinly / CoinTracker / Rotki (Rotki & Crypto Tracking) export Form 8949 + Schedule D.
• ★ FreeTaxUSA + TurboTax + H&R Block all import 8949 from Koinly / CoinTracker.
• ★ Direct File does not yet support crypto as of early 2026 — verify coverage.

Self-employed / freelance flow (★)

1. Track income + expenses through the year — GnuCash, Wave, Akaunting, Beancount (see Freelance Bookkeeping (Wave) and Accounting & Bookkeeping).
2. Export Schedule C-shape income/expense by category.
3. FreeTaxUSA handles Schedule C cleanly; itemize home office, mileage, depreciation.
4. Pay quarterly estimated taxes via IRS Direct Pay (free) or EFTPS (free).

State + local

• State income tax — state-by-state; FreeTaxUSA / Cash App Taxes / Direct File-supported states cover most.
• State estimated taxes — varies; many states have free e-pay portals.
• City + local taxes — Philadelphia, NYC, San Francisco, Detroit, etc.; sometimes need separate filing.
• Sales / use tax — small-business / online-seller territory; not a 1040 issue.

Year-round tax-prep practices

• ★ Quarterly check-in — re-estimate liability each quarter; adjust withholding or estimateds.
• ★ Document trail — receipts in Self-Hosted Vital Docs (Paperless-ngx); 1099s + W-2s land in the same place.
• ★ Roth conversion modeling — see Inheritance & Tax Planning.
• ★ Tax-loss harvesting — late-year; track wash-sale rule.
• ★ HSA + 401(k) + IRA contributions — confirm before April 15.

License / pricing

• FreeTaxUSA: free federal; ~$15 state.
• IRS Direct File, Cash App Taxes, TaxSlayer Simply Free, H&R Block Free Online, TurboTax Free Edition (basic), VITA / TCE / MilTax: free.
• TurboTax / H&R Block / TaxAct paid: paid.
• OpenTaxSolver, PyTaxPrep: free OSS.
• Paper filing: free.

Pick this if…

• Default 2026 free / cheap pick: FreeTaxUSA.
• Simple W-2 single-state: IRS Direct File (check state coverage).
• Free federal AND free state, simple-ish return: Cash App Taxes.
• In-person help, low income: VITA.
• Senior, low income: TCE / AARP Tax-Aide.
• Service member / veteran: MilTax.
• Want to understand the return at the line level: OpenTaxSolver + paper or e-file via FreeTaxUSA.
• Self-employed: track all year (Wave / GnuCash / Beancount), file with FreeTaxUSA.
• Complex (business, K-1, multi-state with depreciation, big inheritance year): CPA or EA.
• Polish-over-cost: TurboTax (eyes open about pricing).