Deciding how to file taxes can be complicated, given the many options out there. But the good news is that you don't have to handle the IRS forms without any help. The best tax software walks you through the process and makes it simple and easy to submit your returns.
There are many different tax software options out there. This Liberty Tax review will help you decide whether this company's online filing service is the best one to help you complete your 1040 forms and submit them to the government.
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Liberty Tax: the basics
Liberty Tax is headquartered in Virginia Beach, Virginia, but the full-service income tax preparation company has more than 2,700 offices in the U.S. and Canada to provide in-person help with the filing process.
Liberty Tax started as a Canadian tax franchise company called U&R Tax Depot, but the company was acquired in 1997 and renamed Liberty Tax Service the subsequent year when it opened five offices in the U.S.
It now offers both in-person help and online filing services, and Liberty Tax serves more than 2 million customers.
How much does Liberty Tax cost?
Liberty Tax offers three different options for online tax filers, including a basic plan, a deluxe plan, and a premium plan designed for those who have more complicated situations such as the self-employed, small business owners, those who need to file a Schedule C, or real estate investors.
Liberty's most expensive tier is only $85.95, so even those with unusual income sources won't have to pay an exorbitant amount to file. This reasonable pricing sets Liberty apart from most other online filing programs, where taxpayers pay quite a bit more to file returns with more complexity. However, you will have to pay extra for state returns regardless of which program you choose.
The chart below shows the different product options, including the prices to submit a federal tax return, as well as for state tax filing.
|Basic||$45.95 for a federal return
$36.95 for state returns
|Single or married filers with no dependents who are claiming the standard deduction|
|Deluxe||$65.95 for a federal tax return
$36.95 for state returns
|Tax filers who need to claim dependents, who owe capital gains taxes, or who plan to itemize|
|Premium||$85.95 for a federal tax return
$36.95 for state returns
|Small business owners or individuals with self-employment income or other uncommon types of income|
Basic tax filing services
Liberty's Basic tax filing service costs $45.95 for federal returns and $36.95 to submit a state return. It includes Forms 1040 and 8853 as well as Schedule A and Schedule B. It does not allow you to itemize deductions or claim either investment or retirement income.
If you are a single filer or are married with no dependents and you have only W-2 income, unemployment income, or interest income under $1,500, this option could work for you. The good news is, you can claim the earned income tax credit using this service, and you can use this entry-level tier even if you have received a taxable scholarship or fellowship grant; if you earn tips; or if you receive dividends from the Alaska Permanent Fund.
Your income must be under $100,000, though.
Deluxe tax filing services
Liberty's Deluxe service is $65.95 for federal returns, and the price for a state return is $36.95. You'll be able to submit more forms with this upgraded program including Forms 1040, 4562, 8829, 4136, 8839, and 8853 as well as Schedules A, B, and C.
If you have capital gains from investments or retirement income, this could be the right program for you. You can also use this program to claim education tax breaks or deductions for IRA contributions, alimony payments, or retirement expenses.
You can itemize your deductions with the Deluxe service as well, which makes this the ideal choice if you have a lot of medical expenses, high mortgage interest payments, or enough other deductible expenses to exceed the standard deduction.
Premium tax filing services
If your situation is especially complicated, you'll appreciate Liberty's Premium service. Available for $85.95 for federal returns and $36.95 per state return, the Premium service allows you to file a wide variety of forms and schedules including Forms 1040, 4562, 8829, 4136, 4684, 4835, 8839, and 8853, and Schedules A, B, C, E, F, K-1.
This tax filing service could work for you if you have income from self-employment; business deductions; rental or farming income; income from an estate; unreported tips; and income from other uncommon sources. If you'll owe income tax on more than $100,000 in income, you should also opt for the premium tax filing service.
How does Liberty Tax work?
Liberty Tax aims to eliminate the hassle for tax filers by offering multiple different online options for submitting your tax return. Whether you have a simple return, a family that necessitates claiming the child care tax credit, or a complicated return with self-employment income, you won't pay much more when you use Liberty to file your returns.
This company stands apart from other tax filing services not only because they don't charge a high amount for complex returns, but also because they have more than 3,000 different locations where you can get in-person help. The best part is, if you want a tax expert to review your returns, you won't pay extra because Liberty offers free double-check services at participating locations.
Other key features include audit help if you need it, a 100% accuracy guarantee, and the ability to import previous years’ returns filed with competitors for free to save time on this tax year's filing. Liberty promises it will cover penalties and interest from the IRS if there are math errors or provide a refund of the tax prep fees if another service would've got you a larger refund.
And Liberty's software aims to make online tax preparation easy — it's possible to get your paperwork done in as few as 15 minutes.
Liberty Tax advantages
Liberty offers some significant advantages, especially for people who have complex tax situations. Here are some of the key benefits.
- Free double-check: If you take your tax return to one of more than 3,000 participating locations, a tax professional will review it for free.
- In-person assistance: If you get stuck during the filing process, Liberty online can transfer all of your forms and information to a Liberty Tax office where a professional can help you complete the filing process.
- Simple hassle-free software. Liberty can import past returns to make filing easier, and the software will ask you questions to help you complete your tax forms. According to the Liberty website, it's possible to get your forms done in as few as 15 minutes, thanks to the streamlined process.
- Multiple guarantees: Liberty Tax Online promises that if a side-by-side comparison of your return with another online service shows that they didn't get you the biggest tax refund, you'll get your filing prep fees back. The company also offers an accuracy guarantee and may reimburse you for penalties and interest if its math is incorrect and the IRS charges you.
Drawbacks to Liberty Tax
Unfortunately, there are also some downsides to using Liberty Tax as well. Here are some of the biggest disadvantages.
- No free option: Unlike some online filing services, Liberty does not offer an option to file taxes for free. If you have an income less than $72,000 and qualify for free e-file, you may want to consider another service.
- State tax returns are expensive: You'll have to pay $36.95 for each state tax return that you file.
- Poor service reviews: Liberty Tax has a F rating from the Better Business Bureau, is not BBB accredited, and has received several consumer complaints. Many of the complaints relate to the in-person filing services rather than online, but this may still be a concern — especially if you plan to visit a Liberty branch for help.
How to contact Liberty Tax
You can contact Liberty Tax via phone at 866-871-1040 if you want help finding a local office, or you can call its headquarters toll free at 800-790-3863. You can also email Liberty at firstname.lastname@example.org if you need help with its online services or email@example.com if you're hoping to find a local office.
There is no online chat feature available from Liberty Tax, but you do have the option to visit one of more than 3,000 local offices and talk with a tax preparer if you need support.
FAQs about Liberty Tax
Does Liberty Tax do rapid refunds?
Liberty Tax does not offer a rapid refund option. You can choose to receive your refund via paper check; direct deposit; or a Liberty Tax Prepaid Mastercard — but additional fees will apply if you choose the card option. You can also opt for a Refund Transfer, which allows you to avoid paying an upfront fee for tax preparation services.
Rapid refunds are generally a costly option, and using them could be a big tax mistake. It's best to request a refund via direct deposit from the IRS after e-filing if you want to avoid owing fees while still getting your money as quickly as possible.
Which is better, Liberty Tax or H&R Block?
Liberty Tax and H&R; Block both offer the option of filing your taxes online or getting help with your tax planning from a tax professional at an in-person location. When choosing between them, the best option will depend on your personal situation.
H&R; Block offers the opportunity for those with simple returns to file for free, which makes it a better choice if you're eligible to submit a no-cost return. However, if you are self-employed or have other uncommon income sources, H&R; Block's online filing for self-employed individuals is more expensive than the option Liberty Tax offers.
Which is cheaper, Liberty Tax or Jackson Hewitt?
When comparing the cost of filing your taxes with Liberty Tax vs. Jackson Hewitt, the cheapest option depends on what type of filing service you need. Jackson Hewitt offers a free e-filing service, as well as a Premier service for self-employed filers for $49.99. These two are both less expensive than Liberty's services.
What is the best tax preparation company?
The best tax preparation company depends on your needs.
For qualifying taxpayers with simple tax returns only, TurboTax offers an incredibly easy-to-use program.1 Credit Karma also offers the opportunity to file both state and federal taxes for free, which sets it apart from almost all other competitors that charge for state returns. TaxAct also provides a free option, which includes some features that other competitors don't allow, such as declaring retirement income and claiming dependents. And Liberty Tax offers free double-check, which most competitors don't. However, it charges to file any return.
Ultimately, you'll need to compare the features that each company offers to decide which is the best tax software or service for your needs. If you plan to pay your taxes with a credit card, you may also want to look into programs that facilitate that option.
The bottom line
Deciding how to file your taxes can be one of the trickiest parts of learning how to manage your money, but Liberty Tax could make it simpler. If you qualify for free or basic services with other tax prep providers, it could be an expensive option, but it’s a more affordable choice for those with complex tax situations. If you want a professional to double-check your return at no cost or you think you may need in-person help, Liberty can be a great choice for the upcoming tax season.
If it doesn’t sound like the best option for you, check out our picks for the best tax software.