Free Tax Filing with Credit Karma

Starting this year, Credit Karma will be offering free federal and state tax submission. Mostly known as a free credit score Web site, Credit Karma wants to expand its offerings and grow by capitalizing on the more than 150 million tax payers that need to file their taxes each year. The company doesn’t expect to turn a profit on processing tax returns in the short term, but to grow their customer base.

My brother turned me on to Credit Karma’s free federal and state tax filing service. He is not the kind of person who likes to play games, at least not when he is doing his taxes. His experience was a great one. No up sells and no gimmicks. That is exactly what Credit Karma promises with no surprises with extra fees.

Not everyone will be able to use Credit Karma, but 90% of taxpayers should be able to use the service. Unlike the IRS Free File program that allows people who have adjusted gross incomes of $62,000 or less to have their taxes filed electronically for free, Credit Karma’s free tax preparation program will be available to all regardless of income. The service is also open to owners of small businesses. Credit Karma will offer the full 1040 form in addition to the 1040EZ or 1040A.

As we mentioned, Credit Karma’s tax service won’t be available to everyone. Here some items Credit Karma doesn’t support:
• Non-resident federal filing
• Multiple state filing or non-resident state returns
• State filings without a federal return
• Married filing separately (in common law states)
• Foreign earned income exclusions
• Non-dependent earned income credit
The real profit will come from matching Credit Karma’s new tax filer customers with their potential needs for credit cards and loans Credit Karma offers. This may be a tradeoff that some filers are not willing to make. For others, they will find a free, easy to use site to help file their federal taxes. If online security is a concern to you, Credit Karma will provide 128-git encryption and two-factor authentication.
The free tax prep software has built in help tools to avoid contacting support altogether, however, if you do need assistance contacting Credit Karma over the phone may prove difficult. You may find yourself contacting the company by email support.

Though not perfect, Credit Karma’s new free tax preparation service is a great new addition to the other free electronic tax filing services. This new service can’t handle all tax filing situations, but more than just basic 1040EZ or 1040A processing. If you decide to give Credit Karma a try, lets us know what you think.