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Q: Do an online tax service for free (TaxAct) as well as purchasing a program like TurboTax
a: TurboTax, H & R Block and TaxAct all offer different packages online, including a free option, very basic for filing a federal return and the physical software. (Comments on NextAdvisor.com are for online services only.) If you only need to file a 1040EZ, you can use one of the free options. If a 1040EZ is not suitable for your tax needs, but you still want to file your federal return for free, online service TaxAct is your best option. All these services will charge you a fee if you also need to file a return of the state. If you prefer a physical software to an online service, you can download a tax program or control software on a CD-ROM TurboTax, H & R Block or TurboTax. This software will be more or less the same as the tax preparation package equivalent line.
So, yes, an online service is just as good as a physical program. But no, a free service is not as good as you pay for, as it will include a very basic federal return, not a return of the state. The tax preparation package you choose should match the complexity of your financial situation. If you own a home business, for example, there are tax preparation packages specifically tailored to your needs, but they will be more expensive.
For more information on online tax preparation services, check our reviews and comparison chart.