Preparing your taxes can be complicated. And if your math is off, you could get hit with fees. That’s why it’s important to choose your preparer carefully. Liberty Tax promises to get the math right the first time and if you get slapped with any penalties or interest from the IRS, they’ll reimburse you. We’ll tell you how it compares to competitors in our Liberty Tax review.
Liberty Tax
Pros
- Clean web interface
- Receive a refund on filing fees if you file with and receive a larger refund from a competitor
- Appointments available at branch locations
- Get an advance on your tax return
Cons
- No free filing option
- Customer Service hours are not ideal
- Additional cost for help from a tax professional
- Online filing can be complicated
Table of Contents
Have you tried TurboTax or H&R Block and weren’t completely satisfied?
It might be time to try a new tax preparer.
Enter, Liberty Tax. The company was founded in 1997 and has both physical branches and online tax preparation offerings.
In this article, I’ll review Liberty Tax so you can see how their services compare to TurboTax or other similar online competitors. Let’s start with the key features.
Liberty Tax Features
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| Price | $19.95 | $29.95 | $49.95 | $74.95 |
| Best For | Simple Returns | Families | Investors | Small Business Owners |
| Includes: | ACA Forms Free Chat Free Tech Support Prior Year Return Access W-2 Download Credit Maximizer Child & Dependent Care Competitor Import Import Last Year's Info State Tax Preparation Tax Return Amendments Create Prior Year Returns Non-Resident, Partial Year State Return Preparation |
Everything from the EZ package plus: Itemized Deductions Health Savings Accounts Interest & Ordinary Income Self Employment Income Business Expenses |
Everything from the EZ and Basic package plus: Depreciation Sole Proprietor Income Home Office Deductions |
Everything from the EZ, Basic, and Deluxe package plus: Income from Rental/Real Estate Gains, Profit and Loss, S Corporation Sale of Home |
| Forms Supported | Form 1040EZ | Form 1040, 8853 | Form 1040, 4562, 8829, 4136, 8839, 8853 | Form 1040, 4562, 8829, 4136, 4684, 4835, 8839, 8853 |
| Schedules Supported | Schedule B | Schedule A, B | Schedule A, B, C | Schedule A, B, C, E, F, K-1 |
Each of the packages from Liberty Tax has unique features, so I’ll break down each one.
EZ Plan
EZ is most useful if you have a basic tax return, filing either the 1040EZ or Schedule B. Remember, this is basic, so you can’t do things like itemized deductions. Here are some of the key features:
- Prior year access and filing – you can access your previous year’s return if you filed with Liberty Tax in the past and you can also file past year’s returns if you’ve failed to do so for any reason.
- Competitor importing – if your prior year tax returns are in PDF form, you can import them from a competitor like TurboTax.
- Amended returns – if you missed any information on your tax return, you can file an amended return with the EZ package and correct any mistakes.
- W2 importing – you can import your W2 directly from your employer rather than manually keying in all the information.
- EITC and Affordable Care Act support – if you qualify for EITC (Earned Income Tax Credit) you can file that form with the EZ package (Schedule EIC). You’ll also have support for any Affordable Care Act documentation, such as Hardship forms.
Forms supported: Form 1040EZ
Schedules supported: Schedule B
Basic Plan
The Basic plan is for those who need more than the EZ plan but don’t have overly-complex tax scenarios. You get everything that the EZ plan offers, plus:
- HSA support – if you have a Health Savings Account (HSA) you’ll need to consider special tax deductions and implications, so you’ll need to use this plan to get the appropriate forms.
- Interest income – if you’ve earned more than $1,500 from interest, most likely you’ll have to file Schedule B. Many people who have investment accounts need this form, and the Basic plan supports it.
- Itemized deductions – many people filing taxes need to itemize their deductions, which comes on Schedule A. The Basic plan supports this form.
- Self-employment support – if you’re a freelancer, small business owner, or another type of independent professional, you’ll most likely need to file Schedule C. The Basic plan has you covered with all the necessary documentation, as well as deductions for things like general business expenses.
Forms supported:
- Form 1040
- Form 8853
Schedules supported:
- Schedule A
- Schedule B
Deluxe plan
As your tax situation becomes more complex, you’ll need more features and access to more types of documents when you file your taxes. It’s best for investors and people who have a sole proprietorship. This comes with everything that both the EZ and Basic plans offer, plus:
- Depreciation – if you own assets that need to be depreciated, you’ll get the necessary forms and support with this plan.
- Sole proprietor income – if you have a business that is structured as a sole proprietorship, you will need the Deluxe plan to provide you with the proper forms.
- Home office deductions – if your business is run out of your home, you can deduct certain home office expenses. Because this can get tricky, this plan will help walk you through the process of deducting expenses specific to your home office.
- Free Pro Tax Support – on the lower plans, you’ll have to pay $4.95 to get support from a tax professional. The Deluxe plan includes professional tax support for free (and it’s unlimited).
Forms supported:
- Form 1040
- Form 4562
- Form 8829
- Form 4136
- Form 8839
- Form 8853
Schedules supported:
- Schedule A
- Schedule B
- Schedule C
Premium plan
The Premium plan is for the most complicated tax situations and is best for small business owners who have a diversified set of income sources. Features include everything from the EZ, Basic, and Deluxe plans, plus:
- Income from a rental/real estate – if you have rental properties or other real estate, you’ll need to file certain forms for taxes and deductions, which are supported in the Premium plan.
- Gains, profit and loss, S Corp – the Premium plan supports Schedule D, which determines your gains, profits, and losses for business purposes. If your business is structured as an S Corporation, you’ll also need these accompanying forms.
- Sale of home – if you sold your home during the year, you’ll need the Premium plan, which accounts for the home sale on your taxes.
Forms supported:
- Form 1040
- Form 4562
- Form 8829
- Form 4136
- Form 4684
- Form 4835
- Form 8839
- Form 8853
Schedules supported:
- Schedule A
- Schedule B
- Schedule C
- Schedule D
- Schedule E
- Schedule F
- Schedule K-1
You can view a full breakdown of all four plans on Liberty Tax’s website.
Pricing
The pricing is pretty straightforward with Liberty Tax:
- EZ: $19.95 (Federal), $35.95 (State)
- Basic: $29.95 (Federal), $39.95 (State)
- Deluxe: $49.95 (Federal), $39.95 (State)
- Premium: $74.95 (Federal), $39.95 (State)
Signing Up
Registering and getting started with Liberty Tax is a breeze. Simply click the “Get Started” button on their homepage and you’ll be taken to a screen that looks like this:
Liberty Tax Signup Screen
From there, you’ll fill out all the required information and get started with your taxes. While their online tax filing system overall isn’t as sleek as some of the bigger names (like TaxAct or TurboTax), it’s no-frills set up does the job and you can get in to start filing within a matter of minutes.
Security
Like all other tax preparation sites these days, Liberty Tax is a secured site. So you don’t have to worry about your information being easily leaked out into the internet.
With that being said, you should always read a company’s privacy policy if you’re unsure on how they conduct their business. Thankfully I took the liberty (pun intended!) of scanning it for you and I learned a few things.
First, they have some affiliated companies: www.esmarttax.com, www.esmarttax.com/ffa, www.freetax.com, www.libertytax.com, www.taxbrain.com, and https://ift.tt/2RLQ4db. Since they’re all the same company, your information will be shared within those domains.
The second and most important thing I learned was that Liberty Tax won’t sell your information unless required by law to do so. According to their privacy statement:
“We do not sell your personal information to third parties….Affiliated and non-affiliated third parties may be given access to your information only as permitted by law or upon your express authorization to process the transactions in which you have engaged us to perform.”
This is all pretty common legal jargon, but the bottom line is that you can feel safe and secure with using Liberty Tax. Plus, you have the option of going into one of their 3,000 locations to work with a physical person instead if doing your taxes online makes you uneasy.
Mobile Support
Unlike some of the big players such as TurboTax, Liberty Tax does not have a mobile app for you to do your taxes on the go. You can, however, access their site from a mobile device, and it’s 100% responsive. It’s just ugly. The mobile site reminded me of something that you would have seen 10 years ago when iPhones made their first appearance. If you’re a mobile-first person, Liberty Tax will frustrate you.
Customer Service
You’ll get free support from Liberty Tax via email, phone, or live chat. Their hours of operation are regular business hours (9 AM – 5 PM EST, Monday through Friday) and you can get help with anything related to your tax preparation. If you need a tax professional, you can add Pro Tax Support for just $4.95.
Liberty Tax Pros and Cons
Pros:
- Interface. Liberty Tax has a clean interface with no ads or junk filling up your screen. It features a tax estimator and real-time refund display, which allow you to estimate your return as you go. The help sidebar is also handy if you run into a situation where you don’t know what you do–you can search for answers immediately.
- Maximum refund guarantee. This is common with online tax-prep services, but Liberty Tax will refund your filing fees if you file identically with a competitor and get a larger federal refund.
- Physical branches. You can schedule an appointment online, so you don’t have to worry about the additional hassle. The branches will do a “double check” of your return for you, too.
- Tax return advances. If you’re in need of a loan, you can get an advance on your tax return–called Easy Advance with Liberty Tax. They typically offer this through February and as of 2018 you could get up to $3,250 if your expected return (minus fees) is greater than $5,095.
Cons:
- There’s no way to file for free. Many competitors offer a free filing option (which is usually very basic), but Liberty doesn’t.
- Customer service. Not only does Liberty Tax have shorter hours, but you have to pay extra for a tax professional to help you. I guess this makes sense, but when there are physical branches located around the country, you’d think that Liberty would place a heavier focus on customer service. The shortened hours can become especially frustrating during tax season if you have a question in the evening or on the weekend (when many of us do our taxes online) and can’t get anyone to help.
- Questions and support aren’t great. When you compare Liberty Tax’s walkthrough to something like TurboTax, it leaves a lot to be desired. TurboTax has perfected the process of walking you through and filling out your tax form–but Liberty Still has a ways to go. For example, the questions don’t seem interconnected or dependent on answers to one another in certain circumstances.
Liberty Tax Alternatives
The obvious alternatives are TurboTax and H&R Block. Both have a better reputation and a more significant customer base. In most cases, both TurboTax and H&R Block will be more expensive for a similar product, but they have brand recognition. TurboTax offers a much better filing process, but it’s more expensive for comparable plans. H&R Block does have physical branch locations, and their prices are competitive with Liberty Tax so you may not find a lot of difference. It all comes down to which brand you prefer and how much work you want to do to save a little money.
Who It’s For
Liberty Tax is for anyone looking to file their taxes online quickly and efficiently. For those of you looking to try something other than TurboTax and H&R Block, Liberty Tax may be a new option. They also have the value proposition of having in-person branches (over 4,000 country-wide) to assist you, should you need it.
Bottom Line
Overall, Liberty Tax has had some harsh reviews. While they have some nice features, you won’t find anything that stands out from what other major tax preparers offer. Aside from a slight price advantage, I can’t see why most people wouldn’t go with a more popular TurboTax or H&R Block. If you’ve tried them both, though, and are unhappy, give Liberty Tax a shot–maybe it will work for you. Some of their customers have been very pleased.
Topics: Reviews • TaxesThe post Liberty Tax Review – Quick Option for Filing Your Taxes Online appeared first on The Dough Roller.
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