Credit Karma Tax review: A free prep service that covers almost any tax situation

  • Credit Karma Tax is free for everyone, though it doesn’t support a few specific tax situations.
  • There’s also no option to connect with a tax expert and technical support is limited.
  • But the interface is simple and clear, and doesn’t make you click through prompts that don’t apply to you.
  • Learn more about Credit Karma Tax »

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.

Credit Karma offers a free, online tax preparation program that you can access from your web browser or phone. All you need is a Credit Karma account. It’s a worthy competitor to popular services like TurboTax and H&R Block, especially since it costs $0 to file a federal and state return. But there are some limitations.

Here’s a look at how Credit Karma works and who it’s best for.

 
Editor’s rating 3.7 / 5
Review summary

Credit Karma Tax offers a free and easy way to prepare your tax return, but doesn’t support multiple state returns, part-year state returns, or foreign earned income.

Cost of DIY filing

$0

Details
  • Free federal and state filing
  • Clear and easy-to-navigate interface
  • No option to connect with a tax expert
  • Limited customer support

Free version covers

Most tax situations

 

Learn more about Credit Karma Tax »

Who should use Credit Karma Tax?

Filers who crave simplicity and want to save money on tax preparation will get the most out of Credit Karma Tax.

Because the platform doesn’t have separate packages for specific tax situations, like self-employment or investment income, it relies on the user to find the tax forms they need beyond the most basic ones. It’s a true do-it-yourself experience. That said, the interface is clear and easy to navigate, even for novices. 

Credit Karma Tax is best for someone who doesn’t anticipate needing expert help to complete their tax return.

You might like filing with Credit Karma Tax if you:

  • Already have a Credit Karma account
  • Are looking for the cheapest way to file taxes
  • Have filed your own taxes before
  • Appreciate a simple user interface

 

You might not like filing with Credit Karma Tax if you:

  • Earned income in more than one state in 2020
  • Moved to a new state in 2020
  • Appreciate time-saving features like document upload
  • Want the option to consult a tax expert
  • Don’t have experience filing taxes and qualify for free filing elsewhere

How does Credit Karma Tax work?

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.

While a few less-common circumstances are not covered by Credit Karma Tax, most filers are able to use the online tool to prepare and submit federal and state tax returns for free. Unlike other services, which may offer some level of free preparation depending on your income or tax situation, Credit Karma Tax is always free.

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.

What do you get with Credit Karma Tax?

  • Simple interface. After answering a few questions about your tax situation, you’ll only see prompts to enter information that is relevant to you.
  • Mobile version. Work on your taxes on the mobile or web versions, or switch back and forth.
  • Audit defense: Most tax prep services give you audit support for free. Audit defense goes a step further, and provides you with assistance and representation, among other things, if you’re audited.
  • Accuracy guarantee: For any calculation errors made by Credit Karma Tax’s service that result in penalties and/or interest, the company will reimburse you up to $1,000 in the form of gift cards.
  • A Credit Karma account: With a Credit Karma account, you’ll be able to access your credit score and credit reports for free, plus a solid savings account and personalized loan and credit card recommendations and offers.

Is Credit Karma Tax really 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. 

The company also offers Credit Karma Savings, a high-yield account with no monthly fees or minimum balance and a competitive APY. Filers who use Credit Karma Tax can choose to deposit their refund directly into an existing Credit Karma Savings account or open a new one.

Is Credit Karma Tax as good as TurboTax?

In a head-to-head comparison of free plans, Credit Karma’s covers far more situations than TurboTax’s.

But if you’re looking for moment-to-moment guidance while preparing your tax return, would like the option to pay more and get help from a professional, or want a package designed specifically for your needs, TurboTax will be a better choice than Credit Karma. 

Are there any downsides to using Credit Karma?

If you lived in multiple states, earned foreign income during the tax year, or are claiming the earned income tax credit (EITC) with no dependents, Credit Karma Tax does not support your tax-filing needs. There are also a few other, less-common forms and schedules that are not supported.

Also, Credit Karma’s simple tax preparation interface doesn’t walk you through every tax form. This can be good for people who want a streamlined experience and don’t want to spend time clicking through non-relevant forms, but it can cause non-experienced filers to miss some deductions or important data entry.

Lastly, Credit Karma Tax doesn’t connect filers with tax experts for personalized help. H&R Block, TurboTax, and TaxAct all offer this feature for an additional cost.

Tanza Loudenback, CFP®, is the personal-finance correspondent at Business Insider. She writes most frequently about saving money, planning for retirement, taxes, debt management, and strategies for building wealth. Have a money question for Tanza? Fill out this anonymous form. 

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