7 Ways to File Your Taxes Free

Most do-it-yourself filers prepare their own taxes for one and only one reason: They want to save money. But tax software isn’t cheap, and hidden costs can sometimes blindside you. You might be forced to upgrade to another product midway through your tax return or to pay extra to file your state tax return.

Fortunately, the tax software business is fiercely competitive, and in an effort to attract new customers, software providers have expanded their free offerings. Depending on your circumstances, you may be able to prepare and e-file your federal and state tax return without paying a dime.

Make sure you read the fine print and disclaimers before you start plugging numbers into an online program. Otherwise, you could discover that you don’t qualify for the free product, forcing you to switch to a paid version or to abandon your tax return midway through a program. Neither option makes for a satisfying taxpaying experience.

And keep information security in mind throughout your tax prep and filing. Use a strong password for your software log-in (not “password” or your dog’s name). Be wary of e-mails purporting to be from your software provider; so-called phishing e-mails are used by scammers to obtain your personal information. Don’t click on links included in e-mails. If you need to communicate with the software provider, do it through the provider’s website.

H&R Block More Zero

Who can use it: Taxpayers who file 1040EZ or 1040A, and itemizers who claim the most common deductions on Form 1040

State tax return included: Yes

In an audacious move to attract new online customers, H&R Block has significantly expanded eligibility for its free online program. Taxpayers who deduct mortgage interest, charitable contributions and/or medical expenses on Schedule A of Form 1040 can file a federal and state tax return free. Block estimates that 87 million taxpayers will be eligible to use the new product.

Users can electronically import last year’s tax return, whether it was prepared using H&R Block’s program or a competitor’s product.

You can use More Zero if you have income from interest and dividends. However, if you need to report capital gains and/or losses on Schedule D, or if you have self-employment income, you’ll need to pay to upgrade to H&R Block Deluxe or H&R Block Premium.

TurboTax Absolute Zero

Who can use it: Taxpayers who file 1040EZ or 1040A

State tax return included: Yes

This is a good option for taxpayers with simple tax returns; you’ll have to pay to upgrade to TurboTax Deluxe if you have investment or self-employment income or if you contributed to a health savings account last year.

The free Absolute Zero product lacks some of the features that have made TurboTax the most popular tax prep program. For example, you can’t electronically import last year’s return, even if you used TurboTax to prepare and file your return.

Credit Karma Tax

Who can use it: Most taxpayers, including those with self-employment and/or investment income

State tax return included: Yes

Unlike many other free tax prep programs, Credit Karma Tax isn’t restricted to users with simple tax returns. Taxpayers with income from investments or self-employment can use this program. There are a few limitations—the program won’t handle income from estates, for example—but 90% of taxpayers will be eligible to use the product, says Bethy Hardeman, chief consumer advocate for Credit Karma.

As it does with its offer of free credit scores, the company plans to market related products to taxpayers based on the personal information they provide when filling out tax forms. For example, Credit Karma could use your income to trigger an offer for a specific credit card. If you sign up for the credit card, Credit Karma receives a fee. If that makes you uncomfortable, you can opt out and still use the tax-filing product.

DIY Tax

Who can use it: All taxpayers

State tax return included: Yes

This program, offered by tax preparation company Liberty Tax, is available to all taxpayers, even those with complex forms. So why would Liberty Tax, which has more than 4,300 tax preparation offices in the U.S. and Canada, offer this giveaway? It’s counting on DIY fatigue. A “find an office” link is always visible when you use this program, and a Liberty tax preparer can pick up where you left off—for a fee, of course.

But if you don’t need help, this utilitarian program will help you get the job done free. It’s not as flashy as other online programs, but it does offer online support, and you won’t discover midway through the process that you have to upgrade to a paid product.