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Things to Know About Free Tax Filing Services

Updated: Jul 15, 2021

Is anything really free in America?

Most of us should know that in commerce, anything that is offered free already has the cost factored somewhere on the back end. Or the cost is covered by other means. For example, BOGO deals in the grocery story normally means you are really paying for both items but at a reduced retail price. Or in the cases of cash back, the cash given back to you is added back to another product or service without you realizing it.

The Sell and Use of your information

Companies that offer free tax prep are not doing so out of the kindness of their hearts. It is a marketing tool. All businesses are in business to generate a profit, so you are paying for this cost in other ways. Companies, like Credit Karma, get paid for the credit card and loan recommendations it makes to you in the main Credit Karma service. You give permission when you sign up to use the service by acknowledging the terms and conditions. So, you have voluntarily given up your household size, household demographics, and made it very easy for banks to verify your household income.

And because the primary objective is not tax prep or financial health, some of these companies focus very little attntention on their software leaving you vulnerable to missing tax forms, inaccurate or missing tax law information, or not asking enough questions on their applications.

Hidden Costs

Basic tax prep is free, but what happens when your tax situation becomes complex? You now have to pay for other services like representation for audits, business tax filing, or for having a professional. There is also the factor of some companies charging you a fee for accessing tax returns for previous years when you can get an IRS copy for FREE.

Always read the fine print.

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