Liberty Tax Service Review: File Your Income Taxes Online

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Liberty Tax Service is an online tax preparation website that lets you file simple and complex federal and state tax returns. It is best known for its in-person tax preparation services, which are available across the United States. Many people aren’t aware that Liberty also offers online tax preparation, too.

Liberty offers multiple versions of its software that can handle a wide variety of tax situations. Whether you are single or married filing jointly, Liberty Tax Service has solutions to fit most people’s needs. It also offers a premium service geared toward people who are self-employed.

While Liberty has most of the features you would want in an online tax software, is it enough to justify the cost of its online tax products? Or can you find a similar or better service from its competitors? Let’s find out how Liberty stacks up.

Liberty Tax Service at a Glance

• Originally U&R Tax Depot, the company was acquired by John Hewitt in 1997
• More than 3,000 offices across the U.S. and Canada
• Tax prep solutions for almost every tax situation
• Authorized e-file provider by the IRS
• Simple pricing structure with no hidden fees

Services Provided by Liberty Tax Service

• Customer support through chat, email, phone, and in-person help
• Maximum refund guarantee
• Accuracy guarantee
• Multiple refund options
• Free competitor import
• Audit assistance

What is Liberty Tax Service?

Liberty Tax Service is a tax preparation service with over 3,000 physical locations and 12,000 tax professionals spread across the United States and Canada.

Along with in-person tax services, Liberty also offers online tax preparation software for people who want to file on their own. The software is easy to use and is offered in several versions, each based on different tax filing needs. Along with filing software, Liberty provides various tax tools to help you estimate and file your taxes.

Let’s look at options available through Liberty Tax Service to see if one fits your needs.

Liberty Tax Service Online Products

Liberty Tax Service offers three editions of its online tax solutions for consumers at different price points: Basic, Deluxe, and Premium. Here’s a closer look at what’s included with each version.

Basic Tax Return

Liberty’s Basic Tax Return service is designed for people with simple tax situations. To qualify, you’ll need to have an income of less than $100,000 and no dependents.

Features included with Liberty’s Basic Edition are:

• Standard deduction
• Earned Income Credit
• W-2 wages, salaries, unemployment income, or taxable interest under $1,500
• Taxable scholarships, fellowship grants, tips, or Alaska Permanent Fund dividends

Pricing for the Basic Tax Return is well above what you would pay for similar packages from other online tax services. It supports forms 1040 and 8853, as well as schedules A and B.

Deluxe Tax Return

For those with a more complicated tax situation, you’ll need Liberty’s Deluxe plan. This version is for people with kids, investments, and real estate. It allows for itemized deductions such as property taxes, state income taxes, charitable donations, mortgage interest, and medical expenses.

Other features of Liberty’s Deluxe Tax Return include:

• Children and other dependent deductions and credits
• Investment and retirement income
• Tax credit for retirement accounts
• Childcare and education tax breaks
• Educator expense deductions
• IRA deductions
• Alimony paid deductions

Almost all tax situations are covered with Liberty’s Deluxe Tax Return. This includes forms 1040, 4562, 8829, 4136, 8839, and 8853 and schedules A, B, and C.

Premium Tax Return

Liberty also offers a Premium edition of its software, designed for people who are self-employed or have uncommon forms of income. If you’re a freelancer or independent contractor, this is the option you’ll need to choose.

The Premium Tax Return includes self-employment income and business deductions. As mentioned, use this version for less common income sources, like:

• Rental income
• Farming income
• Beneficiary income
• Partner or shareholder income
• Taxable income over $100,000
• Unreported tips

The Premium Tax Return from Liberty is the service’s most expensive offering by far. Because of its price, make sure you need this version before purchasing it. Liberty’s Premium Tax Return supports forms 1040, 4562, 8829, 4136, 4684, 4835, 8839, and 8853 and schedules A, B, C, E, F, and K-1.

Other Liberty Tax Service Features

Besides its online tax software, other helpful tools and features make Liberty Tax Service a top choice for DIY tax filing. Here’s a list of some of their finest features.

State Tax Returns

For an additional fee, customers can also file state returns through Liberty Tax Service.

Tax School

Liberty Tax Service offers people the chance to learn more about tax preparation. Whether you’re interested in learning about the topic for your own benefit or as a way to make extra income through tax preparation, Liberty has educational opportunities to fit your needs. Both in-person and online classes are available.

Students who attend Liberty’s Tax School will learn how to prepare taxes online and on paper forms. Tax courses last 6-8 weeks and are available in the morning or evenings. Online courses provide the same instruction, but the flexibility to learn at your own pace.

Topics covered include tax schedules, credits, tax forms, and tax preparation. If interested, contact your local Liberty Tax Service office. All classes through Liberty are free, but may charge a small fee for books.

Customer Support

Liberty Tax Service offers thorough support for all its online tax filing products. Customers have access to tax help from Liberty in several ways, including live chat support, email, social media, and in person.

Liberty also has a knowledge database on its website to answer general tax questions. It’s not the most extensive support I’ve seen, but it still provides quick answers for your tax questions.

IRS Resources

You can also find several IRS tax resources on Liberty’s website. Navigating the IRS website isn’t easy, so having quick links to helpful IRS tools can simplify your tax preparation. Resources include free tax forms, instructions, refund tracking, and current income-tax tables.

Tax Tools

As you navigate through your tax return, you may need some extra help. Liberty offers several tools that can help you through the process. Available tools from Liberty Tax Service include:

• Tax return and refund calculator
• W-4 withholding calculator
• Mileage reimbursement calculator
• W-2 download
• Mileage log
• Tax return downloader
• Tax organizer

Having access to tools like these can make doing your own taxes less intimidating.

Tax Return Import

Tax returns you filed with competitors in previous years can be uploaded into Liberty’s system for free. This will save time by auto-populating details into your current filing.

Double-Check Service

One of the benefits of using a tax service with online filing and physical locations is being able to use both together. After you finish your online tax return, you can head to your local Liberty Tax office and have them double-check it for free.

Audit Assistance

Liberty Tax Service will advise you on potential audits or inquiries that may come from either the IRS or your state. Keep in mind this is strictly an advisory role. Liberty doesn’t provide representation in front of the IRS.

Liberty Tax Service Refund Options

Tax refund options through Liberty Tax Service are fairly straightforward. You’ll have access to many of the standard options, such as:

• Paper check
• Direct deposit
• Savings bond
• Prepaid Mastercard

Liberty also offers “Easy Advance,” a tax refund loan. Offered by Liberty via Republic Bank & Trust, loans range from $500 up to $6,250. There are fees and finance charges attached to Easy Advance loans.

After filing your tax return, Liberty helps you track your refund by directing you to the IRS’ Where’s My Refund? tool. Tracking is available 24 hours after e-filing. To check the status of your refund, you’ll need your social security number, your filing status, and your exact refund amount.

Liberty customers can also download the IRS2Go mobile app to check refund status.

Liberty Tax Service Guarantees

Like most of its competitors, Liberty Tax Service offers guarantees on its online tax solutions.

With the Maximum Refund Guarantee, if you use a competitor and get a bigger refund for the same return, Liberty will refund your preparation fees.

Liberty also guarantees that your return will be correct. With its Accuracy Guarantee, if there’s an error that results in interest charges or penalties, Liberty will reimburse you for those charges.

While some competitors may have stronger guarantees, it’s nice to know that Liberty has your best interests in mind with its services.

Where Does Liberty Tax Service Shine?

While it’s not the most extensive online tax service, you might not need all that help. Plus, it does have an easy-to-use interface that most users will enjoy.

Having local branches across America is great, especially if you are new to filing your own taxes. If you get stuck, you can just head to your local Liberty office and get help. It’s nice to know you have a local resource like that.

Liberty’s tax tools shine, as well. Extra tools might not justify paying more for its services, but they are still helpful.

Where Does Liberty Tax Service Fall Short?

The company doesn’t have a free tax filing option, which is relatively standard among its competitors (FreeTaxUSA comes to mind). Liberty also costs more than many other tax services.

That would be fine if you were getting more value from its service, but in many cases, Liberty offers less than other online tax software. In fact, Liberty’s basic solution costs more than many other tax services’ premium offerings. It’s hard to justify spending the money on Liberty’s basic package when you can get the same service for free.

If you’re a beginner when it comes to DIY tax preparation, Liberty doesn’t offer all of the extra help that online tax services provide. Its knowledge base is ok, but not as extensive as you would like to see if this was your first time filing on your own.

Another feature missing from Liberty’s arsenal is a mobile app. Having the ability to file your taxes on your phone is becoming a more important feature. Many of Liberty’s competitors have well-developed mobile apps that allow you to snap a picture of your W-2 during the process. Liberty will need to catch up with technology as people spend more of their time on their mobile devices.

While they offer support in the form of chat, email, social media, and in-person conversations, one notable exception is phone support. While you can probably get all your questions answered in other ways, it would be nice to be able to talk to someone in real time, even if you’re not at a Liberty Tax office.

Who Should Use Liberty Tax Service?

Liberty Tax Service is great for experienced tax filers who don’t need all of the extra help features available with other tax services. It’s an all-around good tax service with enough tools to make it a viable option for most tax needs.

You might want to go with Liberty if you’re someone who likes the idea of having both online and in-person access. Not only does Liberty offer to double-check your online tax return in person if you get stuck online, but Liberty will also transfer all your information to a local office. You’ll receive help from a local professional to finish your return.

Liberty Tax Service isn’t for you if you are looking for a free online tax solution. It’s also not the ideal service if you are nervous about being audited. Liberty’s auditing service is limited to advice only, not representation in front of the IRS.

Is Liberty Tax Service Worth It?

Liberty Tax Service is a solid choice for online tax filing if your needs are beyond a simple tax return and you aren’t worried about your budget. Liberty doesn’t have all the bells and whistles that other online software programs have, though. That’s not surprising considering most of the company’s business revolves around its in-person services.

If you think having access to local help is worth it, Liberty Tax Service may be a good option. However, it is not the cheapest or most robust online tax service on the market. Chances are you can find similar or better service from one of its competitors and pay less for it.