You most likely know Credit score Karma as one of many nation’s hottest locations to examine your credit score rating without cost. Maybe you’re amongst its millions-strong membership cohort.Loads of Credit score Karma members examine their accounts occasionally, if in any respect. If it’s been some time because you’ve been again on the positioning, you’d be forgiven for lacking certainly one of its most enjoyable additions in reminiscence: a very free tax prep platform that caters to frugal, self-confident filers with conditions starting from the useless easy to the very advanced.Credit score Karma Tax shares a lot in frequent with fellow DIY on-line tax prep applications like FreeTaxUSA and TaxAct. Nevertheless it has sufficient idiosyncrasies to warrant an in depth overview – and, resulting from some limitations that we’ll discover intimately beneath, a pre-filing examine to make sure that you meet its suitability standards.Right here’s what it is advisable to learn about Credit score Karma Tax’s prep course of, main options, limitations, benefits, and disadvantages.Key FeaturesTax PacketsCredit Karma Tax’s prep interface is constructed round your individualized Tax Packet: the entire set of types it is advisable to full your return.To construct your Tax Packet, Credit score Karma Tax makes use of your solutions to a collection of primary questions on your life and funds. Should you’ve ready your taxes on-line prior to now, you’re accustomed to the gist of those questions – they cowl your marital standing, homeownership standing, employment, investments, charitable contributions, healthcare, miscellaneous sources of earnings, and extra.When you’ve answered all these questions, you’re transported to your Tax Packet dashboard. It lists in sequential order all of the steps you’ll want to finish earlier than you’ll be able to file your return. Every part is damaged into smaller subsections: “I owned a house” subdivided into “mortgage curiosity paid,” “actual property taxes paid,” and extra. Solely the most typical subsections are proven, however you’ll be able to click on the “Present much less frequent gadgets” dropdown on the backside of every part to show the total retinue. Credit score Karma Tax assumes you’ll take the usual deduction, however the software program tracks your deduction entries and prompts you to modify to itemizing if and when your cumulative itemized deductions exceed the usual deduction.You may work on any subsection you select, in any order, as long as you full it earlier than exiting. In any other case, you might lose information. There’s no must manually save your progress once you step away out of your account, so long as you’ve accomplished your most up-to-date subsection.If you’re performed filling out your whole subsections, you’ll be able to transfer straight on to your state tax return. The identical primary course of applies right here: You fill out the sections and subsections that apply to your return, with Credit score Karma routinely populating redundant fields to avoid wasting time. Earlier than you file, the system opinions your entries and flags for errors and inefficiencies. Right these at your leisure, ship in your return, and also you’re good to go.Prior-12 months ImportingCredit Karma Tax permits prior-year return importing (PDF) from 4 platforms: Credit score Karma Tax, TurboTax, H&R Block, and TaxAct. Should you didn’t put together final 12 months’s return with a type of applications, you’ll must manually enter all of your private data to get began.W-2 ImportingCredit Karma Tax has a photographic W-2 importing system. Merely snap a transparent image of your W-2, add it by your account dashboard, and overview the transcribed data field-by-field to substantiate its accuracy. It is a useful gizmo for taxpayers prepping their returns on smartphones or tablets with built-in cameras.Refund DisplayLike most on-line tax prep applications, Credit score Karma Tax has a real-time refund show that exhibits you precisely how a lot you’ll be able to count on to get again from state and federal authorities – or, conversely, how a lot you owe. The quantity modifications with every new little bit of related data.Free State ReturnsCredit Karma Tax doesn’t cost for state tax submitting – a serious benefit over rivals, the overwhelming majority of which cost for state returns in all however essentially the most easy of tax conditions. You’re entitled to at least one free state tax return per 12 months. Should you lived in or earned earnings in a number of states through the tax 12 months, it is advisable to search for one other tax prep program.DIY Tax Assist CenterCredit Karma Tax’s Tax Assist Middle is a one-stop store for technical help and primary tax prep assist. It’s basically a searchable, user-friendly information base and FAQ trove with quick articles and paragraph-length solutions to only about each frequent tax query conceivable. In my restricted expertise, the search operate is considerably higher than some rivals’ assist sections, which means much less slogging by rows of questions to seek out the solutions you search.24/7 SupportCredit Karma Tax has 24/7 human assist obtainable by dwell chat. To provoke a assist session, it is advisable to fill out a assist ticket within the Tax Assist Middle. Help staffers are certified to deal with technical questions associated to your account and platform expertise, plus primary questions on your tax return itself. Credit score Karma Tax doesn’t make use of credentialed tax consultants, comparable to CPAs, so that you’ll must deliver actually advanced questions elsewhere. Additionally, count on to attend in line for a while throughout peak intervals. On my most up-to-date go to, a weekday afternoon early in tax season, Credit score Karma was already warning of unusually excessive chat volumes.Most Refund GuaranteeLike most rivals, Credit score Karma Tax has a most refund assure. If an equivalent return filed with one other tax prep supplier produces a bigger IRS refund, you’ll obtain as much as $100 from Credit score Karma. This provide solely applies to filers entitled to federal tax refunds, not those that owe taxes to the IRS. The present card’s worth stays the identical whatever the dimension of the discrepancy or refund.Platform LimitationsAs a comparatively new on-line tax prep platform, Credit score Karma Tax isn’t as expansive or well-developed as extra established rivals, comparable to TurboTax and Liberty Tax On-line. It’s not acceptable for filers to whom any of those conditions apply:Married couples submitting individually in group property states: Washington State, Idaho, Nevada, California, Arizona, New Mexico, Texas, Louisiana, or WisconsinFilers who must file a couple of state returnFilers who must report overseas earned incomeState returns not accompanied by a federal returnAdvantages1. All the time Free for All UsersCredit Karma Tax is all the time free for all customers. Anybody who can file a return with Credit score Karma Tax does so at no out-of-pocket price. Whereas the platform’s software program limitations exclude sure forms of filers, comparable to married couples submitting individually in group property states, the overwhelming majority of U.S. taxpayers qualify. That’s a giant deal in an internet tax prep world that’s inexorably shifting towards paid service for all however the easiest conditions.2. Free State ReturnsUnlike most rivals, Credit score Karma Tax doesn’t cost for state returns. Your state return is included in your federal return’s “value” – in different phrases, it’s completely free.three. Can Deal with Nearly Any Tax SituationCredit Karma Tax is acceptable for just about any tax state of affairs. The software program helps all frequent IRS and state types, even these pertaining to much less frequent conditions, comparable to farming, rental property earnings, and the like. I’ve outlined some essential exceptions to this basic rule within the Disadvantages part beneath, however the takeaway is that this: Not like most rivals, Credit score Karma Tax is free for the overwhelming majority of U.S. taxpayers.four. Prefilled Varieties for Present Credit score Karma UsersIf you have already got a Credit score Karma account, you’ll be able to breeze by the demographic data portion of your return, due to the platform’s useful data import. Because it’s quick and free to create a Credit score Karma account, there’s no actual motive to not take this step forward of time. Simply make sure you examine that your transferred data is right earlier than shifting on.5. 24/7 Buyer SupportCredit Karma Tax has 24/7 buyer assist. That is nice information for busy filers who must carve out time later within the night or on weekends, lest tax season move them by. Most low-cost rivals restrict dwell assist to prolonged weekday enterprise hours.6. Person-Pleasant Prep InterfaceCredit Karma Tax has a user-friendly prep interface that appears nice on smartphones and tablets. The super-clean design guides your eyes precisely the place they should go. I didn’t get caught or confused as soon as, which is a fairly spectacular feat for me personally. (The platform does have some minor navigation points, outlined beneath.) General, I’m hard-pressed to recall a extra nice first-time tax prep expertise.Disadvantages1. Restrict One State Return Per FilingCredit Karma Tax solely helps one state return per submitting at current. That is clearly an issue for filers who moved throughout state traces or earned reportable earnings in a number of states through the tax 12 months. Credit score Karma says it’s engaged on a repair for this limitation, however there’s no timetable for its rollout.2. No Knowledgeable-Stage Help AvailableCredit Karma Tax doesn’t provide entry to credentialed tax consultants, comparable to CPAs. Full-service on-line rivals, comparable to TurboTax, do provide CPA and EA (IRS Enrolled Agent) assist. Opponents with bodily department areas, comparable to H&R Block and Jackson Hewitt On-line, additionally provide expert-level assist at no additional price. Should you’re not assured in your skill to navigate a fancy return with out leaning on an skilled, you might wish to go along with a type of alternate options.three. Restricted Importing Capabilities for Prior-12 months ReturnsCredit Karma Tax has restricted prior-year return importing capabilities. You may solely switch your prior-year data in case you beforehand filed with Credit score Karma Tax, H&R Block, TaxAct, or TurboTax. Some competing applications enable prior-year return importing from any platform, as long as the return is transformed to PDF or one other acceptable format.four. Married Submitting Individually Not Out there EverywhereMarried couples opting to file individually can solely achieve this in non-community property states. As of 2018, there are 9 group property states, together with the 2 most populous: Washington, Idaho, Nevada, California, Arizona, New Mexico, Texas, Louisiana, and Wisconsin. Should you’re married and dwell in any of those jurisdictions, you’ll be able to’t use Credit score Karma Tax until you intend to file collectively together with your partner – which, to be truthful, is the default possibility for many couples.5. No Help for International Earned IncomeYou can’t report earnings earned from overseas sources with Credit score Karma Tax. Whereas it’s not significantly frequent for U.S. individuals to earn earnings that technically qualifies as “overseas,” it’s definitely not unheard-of. I do know not less than two households who lease out second houses in Canada, as an illustration. Apparently, they’ll’t file their taxes with Credit score Karma Tax!6. Inside Navigation IssuesCredit Karma Tax has some minor inner navigation points that adversely impacted my prep expertise. Essentially the most noticeable was the disconnect between the Assist Middle and the prep interface. From the assist ticket web page, I couldn’t navigate immediately again to my return. As a substitute, I needed to click on the Credit score Karma Tax emblem on the prime of the web page. That took me again to the Credit score Karma Tax homepage, reasonably than my account dashboard.To entry my account dashboard, I then needed to click on the “Get my refund” button to re-enter the system – an pointless step that, thankfully, didn’t lead to any data loss. (Credit score Karma Tax properly saves every time you full and exit a type or part.)It is a comparatively simple subject for Credit score Karma to repair – I’m no developer or UX skilled, however I really feel like including a primary prime or aspect navigation bar to the Assist Middle would do the trick. Nevertheless it underscores Credit score Karma Tax’s greenness. Potential customers, set your expectations accordingly.Ultimate WordAt first blush, Credit score Karma Tax looks like it truly is for everybody. Its single plan consists of all frequent IRS types, which means it’s relevant to tax conditions of just about any complexity. That alone is massive information, as most competing on-line tax prep suppliers restrict their free federal submitting packages to filers with easy to reasonably advanced conditions. Although it’s not best for novice filers resulting from restricted expert-level assist, Credit score Karma is without doubt one of the few applications that permits tax-savvy small enterprise homeowners to file at no out-of-pocket price.The fact is a bit much less sweeping. On account of software program limitations, Credit score Karma Tax is unsuitable for small however essential segments of the U.S. taxpaying inhabitants: filers with earnings in a number of states, filers with overseas earnings, and married couples submitting individually in a group property state. Should you fall into any of these classes, you’ll must look elsewhere in your tax prep wants. In any other case, Credit score Karma Tax is unquestionably price a detailed look.Are you planning to make use of Credit score Karma Tax to do your taxes without cost this 12 months?