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Plain Talk About Tax Software: Why Things that Start “Free” Don’t Always Stay Free

Tax Information
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“Free” is a powerful word in the business of… well, nearly everything. Everyone wants something for nothing. After all, we work hard for the money we earn, and if we can keep more of it, then why not jump at the chance to get a product or service we need for free?

Take these situations, for example:

  • A billboard banner in bright, bold letters promises a “Free breakfast sandwich!” from your favorite fast food joint — except the fine print says you have to buy an additional combo meal to qualify. Cool deal, bro.
  • Your new credit card states that you’ll pay 0% interest for a full 12 months on all purchases! Unless, that is, if you’re even 2 minutes late on a single payment. Say hello to 24.99% APR. Forever.
  • An enticing “Buy-one, Get-one on everything!” offer lures you into a shop, and you’re looking for the perfect pair of shoes. Score! You find the ones you like, and they’re included in the promotion. You ask the clerk for a pair in your size, and she says they just went out of stock — but wait! She can show you three other options that are, of course, not part of the BOGO deal. Of course.

Feeling like you’ve been duped by a company has to be one of the most frustrating experiences out there, and we are 100% against the bait-and-switch tactics that many businesses employ to increase their profits. That’s because we’re consumers and customers, too — and we have all been there. That’s exactly why we take measures to stay transparent and honest with our pricing, as well as with why the “free” things in life aren’t always free.

The importance of value and price transparency

If you’re reading this, chances are good that you’ve either already started your return for this year, or you’re just about ready to do so. Here’s a brief breakdown of how something that starts out free may not stay that way in the end.

Example: TaxAct’s Free Edition includes everything that taxpayers need to complete and file a simple tax return. It features the forms required to report retirement income and W-2 income, and it allows filers to claim dependents, child tax credits, and the earned income tax credit. For many, this simple solution is all they need to confidently complete their 1040 return, and the $0 price tag is a welcome bonus.

However, more complex returns do require different types of forms, and the tax return software needed to enter additional information costs more to develop and to support. This is why TaxAct Deluxe, for instance, isn’t free — but it does include all of these extras on top of what’s featured in Free:

  • Child and dependent care
  • Student loan interest
  • Adoption credits
  • Health Savings Accounts (HSA)
  • Itemized deductions
    • Medical expenses
    • State and local taxes paid
    • Mortgage interest
    • Real estate taxes
    • Gifts to charity

The truth is that everyone wants to pay as little as possible for nearly everything in life. That’s why we shop around for the best deals before making a big purchase — it’s the smart thing to do. And we know that you’ve got choices when it comes to the tax preparation software you trust to file, so we’re focused on keeping prices as transparent as possible.

How do we do that? For one, our website is always updated when prices increase, and our software lets you know upfront when your return requires a paid version of TaxAct instead of Free. If you are prompted to upgrade at any point in your return, it’s only because the Free edition doesn’t cover one or more of your individual tax needs. Of course, if you ever have any questions about what is included in any of our products, you can view a full list of forms and features by clicking the “Benefits” and “Forms” tabs here.

The bottom line when it comes to “You get what you pay for.”

Millions of people pay nearly $120 per year for a subscription to Amazon Prime, all so they can take advantage of “free” next-day or two-day shipping on their purchases. “Free two-day shipping” is a perfect example of how all of this works: Nothing is really free — there is a cost for every product or service out there, even if it’s not obvious on the surface.

TaxAct strives to provide a consistently reliable service for taxpayers from all walks of life, whether they’re filing a simple federal return or their situation requires dozens of additional forms — even those with pages upon pages of deductions. Our ultimate goal is to supply every taxpayer with the value they expect and deserve. We hope to continue serving your needs for years to come, and who knows? Your next tax return might just be free, too.

This article is for informational purposes only and not legal or financial advice.
All TaxAct offers, products and services are subject to applicable terms and conditions.
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