I used Credit Karma to file my taxes for free last year and loved it. Here’s why I didn’t use it again, but who I think should.

Credit Karma Tax is free to use. The author is not pictured.

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Credit Karma Tax is free to use. The author is not pictured.
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Flickr / John Loo

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  • Credit Karma Tax is an online tax software that guides you through a set of recommended steps to submit your federal and state tax returns for free, regardless of your income.
  • To use Credit Karma Tax, you’ll have to sign up for a Credit Karma account, which provides you with a free credit score and credit report tools.
  • I used it last year and was very happy with it, but this year I got a better result with TurboTax due to a change in my business taxes.
  • For most people who have a straightforward tax return, Credit Karma Tax is still a very good option.

Most people know Credit Karma for its free credit score and credit report tools, but the company can help you with a lot more than your credit. A few years ago, Credit Karma launched a free, online tax preparation program that runs from your web browser.

I used Credit Karma Tax to submit my own taxes last year and was very happy with the experience. Plus, it didn’t cost a thing! Even owning multiple businesses, I was able to do my taxes for free using this program. Here’s how it works, and which type of tax filer will benefit most from using it.

What is Credit Karma Tax?

Credit Karma Tax is a web-based tax preparation software from Credit Karma. While a few less-common circumstances are not covered by Credit Karma Tax, most filers are able to use the online tool to submit federal and state tax returns for free.

Credit Karma Tax does not offer a dedicated mobile app or downloadable version, as is possible with some competing programs. However, you can’t beat the price. Unlike others, which may offer some level of free preparation depending on your income, Credit Karma Tax is always free.

How Credit Karma offers tax prep for free

Most tax preparation companies make money by charging you a fee to download the app or submit your taxes. Credit Karma Tax is really free, there is no charge for filing a federal or state return regardless of your income.

Credit Karma makes money by offering financial products like credit cards to its users. Because Credit Karma Tax requires a Credit Karma account, you may see some of these offers on the way to your tax preparation. You are by no means required to take any of these offers. If you do sign up, Credit Karma may receive a referral fee.

How to use Credit Karma Tax

Credit Karma Tax is an easy-to-use web application that guides you through a set of recommended steps to complete your tax return. You can also jump around from form to form on your own as you go through your stack of paper and digital tax forms for the year.

Entry forms are easy to understand and navigate

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Entry forms are easy to understand and navigate
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Credit Karma

Outside of a limited list of unsupported forms, you can find just about any tax form with a few clicks. The income, deductions, and credits sections at both the federal and state levels are intuitive and easy to navigate. If you have a form in hand and don’t know where it goes, you can just type the form name into the search bar, for example, 1099-INT or W-2, and navigate to that form with just a click.

Why I didn’t use Credit Karma Tax again this year

If you have the most common tax forms and situations, like a full-time job with a few 1099 forms from banking and investments, you can enter your taxes with Credit Karma Tax in just a few minutes. My sister, who is not a finance pro, was able to easily do her own taxes with Credit Karma Tax this year.

In my personal situation, where I operate a pass-through business, I actually had a better final result this year with TurboTax Premier + State (I got it on Amazon for $39 plus another $24.99 for my state filing). I narrowed down the difference to how Credit Karma treated the new pass-through deduction for business owners.

Knowing my own taxes are not typical, I would expect most people to have the best possible tax result no matter what tax service they choose. Having used it myself, I regularly recommend Credit Karma Tax to friends, family, and anyone else who has a straightforward financial situation and is looking to save money while doing their taxes.

The summary explains how much tax you owe and breaks out credits to show your final results.

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The summary explains how much tax you owe and breaks out credits to show your final results.
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Credit Karma

Will Credit Karma Tax work for you?

If you lived in multiple states or earned foreign income during the tax year, Credit Karma Tax does not support your tax filing needs. There are also a few other forms and scenarios that are not supported by Credit Karma Tax. But if your taxes are relatively straightforward and you have all of your forms and documents ready to go, you should be just fine using Credit Karma Tax.

If you have any doubt, you can always do your taxes with multiple services, like Credit Karma Tax, TurboTax and H&R Block, and compare the results before submitting your return. But most likely, they will be exactly the same no matter where you look.

Ready to file your taxes? Click here to use Credit Karma Tax for free »