For those of you curious about filing your taxes, I thought you might be interested to hear about my experiences filing my Federal income taxes using Credit Karma's free income tax service, known as Credit Karma Tax. http://ift.tt/2gbc1Pr
I have no affiliation with Credit Karma except as a user of their site.
For many years I had used the Web edition of TurboTax for free because I was a State Farm customer, but they stopped offering that this year. I have had good experiences with Credit Karma, so I decided to see what their tax filing offering was like. It is also a browser-based app.
Unlike most "free income tax" apps, Credit Karma Tax is free for everyone: not just if you only need certain forms, not just if you have an income below a certain limit, but literally everyone, for Federal and state taxes. This is the first year they have offered this service, so only time will tell if they can continue to offer it for free to everyone in years to come, but they seem like they intend to.
Our income taxes are middlin' in complexity. I am married, but my wife did not work in 2016, so we have just my income. However, she is finishing up a bachelor's degree, so we have some deductions and credits related to that. We own a home, and so have interest and property tax on that (and it does exceed the standard deduction, so it pays to itemize). Finally, we had some long-term capital gains on some stock we sold last year, and some interest income from the savings account we established to pay for living expenses while my wife is in school. We also received a cash gift from my mother after my father passed away this past year.
The Credit Karma Tax UI is a lot like TurboTax, using an interview-style format that is easy to walk through, with an alternate view that divides your tax information into categories and subcategories. Even though I had to enter some information all over again, whereas TurboTax would have had it for last year, it was less information (and less hassle) than I feared it would be.
The app is not quite as smart as TurboTax, however. For example, if you itemize, you can deduct taxes you have paid to the state you live in. Usually this is your state income tax, but the state I live in does not have a state income tax. I knew from using TurboTax that you could deduct sales tax instead, and that you could use an income-based estimate of sales tax paid in lieu of the actual amount (which would require you keeping all your receipts). Tip: if you bought a car, you probably have the receipt for it in your glove box, and if the sales tax on that is bigger than the estimate, you should claim that instead.
Credit Karma, while it recognized that my state did not have an income tax, did not automatically give me the estimated sales tax deduction. Maybe I misread one of the questions and thought it was asking specifically about sales tax. In any event, I used the IRS Web site to calculate the sales tax estimate and went back into Credit Karma Tax and entered it in the appropriate spot, which was easy to find. Still, if I hadn't already been through this with TurboTax several times I probably would have missed this deduction.
Like TurboTax, Credit Karma Tax shows your anticipated refund (or amount owed) on every screen, based on the information you have entered so far. However, there were a couple times I tried a couple of different options to see which was better for me, and the app didn't update the displayed refund after I had made the decision and switched back to the most favorable one. I had to go back and walk through that section of the interview again to get it to update.
There are little help buttons for most fields in the program, and I found these informative when I needed a reminder of what a particular question was really asking, or what an option actually meant.
One thing TurboTax has is a community of users asking questions about taxes, usually with authoritative answers by tax experts. They also have lots of FAQs. Fortunately, this help is available even if you're not using TurboTax—if you Google a tax question, TurboTax's communities or FAQs are usually among the top results. So nice of TurboTax to make this available to everyone, including customers of other tax software! :-)
Overall I was pleased with Credit Karma Tax, especially at the price. It took me about two hours to do my taxes, and most of that was spent logging into Web sites to get my documents. The application is pretty easy to use, though it's not quite as smart as TurboTax (nor does it offer "audit defense" service, where they represent you in case of an audit). But whaddaya expect for nothing, a rrrrubber biscuit? If you have some experience doing your taxes, and/or they are not too complicated, you'll be fine.
I will be using it to do my mom's taxes as well. She lives in a state with state income tax, so I'll have a chance to try that part out.
February 03, 2017 at 07:08PM
