In 2020, Liberty Tax Online made significant upgrades to its interface. However, the upgrades may not have been engineered by Liberty Tax itself. The software that powers Liberty Tax Online is identical to software from the Drake Tax Company (1040.com). Since Liberty Tax Online costs more than 1040.com, it may seem silly to consider it. However, Liberty Tax offers important extras that may make the software worthy of your consideration.Should you use it to file in 2020? Here’s what we think. See how they compare to the other best tax software options this year.
Liberty Tax Online does not advertise free filing for users. Users will need to pay for both state and Federal filing. However, different tiers offer support from tax professionals which may make it worthwhile.It’s worth noting that despite the advertising, we found that users earning less than $100,000 (from W-2 jobs or interest), with no dependents could qualify for free filing. This could be an error that may be closed later on.
Liberty Tax has very different pricing structures compared to most companies. The basic tier is very robust, allowing for itemizing and a variety of income types.For reference, it does appear they raised their prices significantly over prior years. However, this level doesn’t come with tax support, but the other two levels do. This is the advertised pricing structure.
However, actual pricing may not match the advertised prices. During user testing we noticed that the real pricing doesn’t match the advertised pricing. As of the point of testing, users will pay $25 for Federal filing and state filing is included for free (this matches the 1040.com pricing currently). Additionally, users earning less than $100,000 who don’t have dependents can file for free.Also note, that in prior years, Liberty Tax has offered a variety of promotions that significantly discounted the price.
Liberty Tax Online uses a combination of simple questions and self-guidance to get users through the tax software as efficiently as possible. The interface is clean and fairly-streamlined.It’s not quite as easy to navigate as H&R Block, TurboTax or TaxSlayer, but it is a decent option.The one exception to this is if you own rental property. The software does not automatically have a form for “Schedule E”. It does allow you to input income and expenses, but you have to search for the information yourself. It’s not worth the hassle at all.
Given the higher prices for Liberty Tax Online, we had high expectations for the ease of use. However, the software doesn’t allow users to import any information or forms. Aside from the requirement to enter all information yourself, the software is fairly easy to use. The inputs required for “depreciation” calculators or other complex tax things were easy to understand.
Although the Liberty Tax Online software isn’t particularly easy to use, it has one important draw that’s unique to it. Liberty Tax online has Double Check Guarantee.Users who complete their filing online can visit participating Liberty Tax retail locations and have a tax professional review their forms before filing. This guarantee is unique to Liberty Tax Online.Since the Double Check Guarantee is included with your purchase price, Liberty Tax Online becomes significantly cheaper than comparable offers from competitors.
Liberty Tax has details scattered throughout the software. These details make it easy for users to avoid having to look up information. However, if you’re stuck, Liberty Tax has some decent articles built into the software. Additionally, users of the Deluxe or Premium tiers have the option to email a tax professional specific questions. That’s even better than an article in my opinion.
The biggest “extra” for Liberty Tax Online users is the free in-office double check for Premium users. Historically, Liberty Tax Online has offered refund advances for online users, but the offers this year specify that you must visit the office.
Liberty Tax Online does not offer special guidance on filing crypto trades. However, it does have all the necessary forms for filing.
Liberty Tax Online allows users to set up multi-factor authentication using email. It always requests a new code when you log in.
In 2020, Liberty Tax Online made some important improvements to the software. The usability of the software has dramatically improved, and the software still comes with help from tax professionals.However, I think it’s rare that someone will find a use case for Liberty Tax Online. TaxSlayer costs less and offers a better interface and more upgrades. Active traders and other investors may prefer to pay a bit more for a service like TurboTax that can connect to your brokerage and calculate your tax burden for you. If you’re looking for a bargain, Credit Karma Tax will allow you to file for free in 2020. Unless you really value that look over from a real person, it seems silly to pay the high price associated with Liberty Tax Online.