What Is 1040.com?
1040.com is a tax filing website with three different filing packages ranging from $0 to $44.95. For every tax return filed through their site, the company donates $2 to clean water initiatives.
The company has been around since 1999 and their user-friendly software is a consumer version of professional tax software created by Drake Software. You may not have heard of Drake, but their software is highly-rated by the American Institute of Certified Public Accountants.
While the website isn’t mentioned among the popular tax sites like Turbo Tax, H&R Block and Tax Slayer, the site does have a solid software history and the donations to clean water initiatives are an interesting perk.
They also claim to provide 100%-accurate calculations and the maximum refund possible.
To understand if the site is right for you, we’re going to walk you through the different types of tax packages 1040.com offers as well as what those packages entail, how much they cost and how their plans compare to other tax sites.
1040.com’s Three Tax Packages
The website provides you with three different filing plans based on price and features:
Free Filing: No Kids, No Itemized Deductions
You can file for free on 1040.com but you have to fit into a very specific category of a taxpayer to do so.
First, you can’t have any children or dependents on your tax return, making this option ideal for single people or couples without kids.
The second main requirement for filing free is that your taxable income is less than $100,000. This is significant because there’s actually a large portion of taxpayers who earn more than $100K; just about 20%.
If you meet these two requirements, you’ll also have to keep in mind that you can’t itemize your deductions.
Another important point: 1040.com isn’t the only site offering free tax returns, though other sites have different qualification standards.
Based on our research, we found that 1040.com’s income limit of $100,000 is the best of all the free filing sites listed above.
Pro tip: If you’re a homeowner or freelancer, you’ll most likely need the next two filing packages.
$24.95 Filing: Good for Families
This level of tax filing is, based on our review of the three packages, best suited for someone who earns a W-2 income and has children and/or dependents. The reason we say that is that this level of service provides you the various tools you’ll need to navigate your tax situation, tools that the free version doesn’t provide.
While the next level up, $44.95, offers these tools, it also provides tools for freelancer and small-business income. This functionality isn’t needed if you don’t fall into those two categories. Therefore, this middle tier is probably the best fit.
The fact that this package allows you to claim children and dependents on your tax return is key because it works on your behalf to find tax credits and deductions. For example, the $24.95 package gets you tax breaks for certain child care or education payments you’ve made.
Homeowners will love this version, too, because it allows you to enter all the necessary-tax related homeowner information like interest paid on your mortgage, property taxes and any mortgage credits for which you are eligible.
Other situations this tier covers include deductions for the following:
- Educator expenses
- Moving expenses
- IRA contributions
$44.95 Filing: Freelancers and Small-Business Owners
This is 1040.com’s most expensive level of tax filing but it’s also the site’s most powerful tier. As we mentioned earlier, this tier is a good fit for freelancers or small business owners who are trying to maximize their deductions.
This level of filing also includes those who’ve earned more than $100,000 in taxable income. Other features it offers include all the necessary forms for rental properties, farming income and any K-1 income you’ve received as a partner in a business.
How 1040.com’s Pricing Compares to TurboTax, H&R Block, TaxSlayer and TaxAct
While 1040.com may not be as popular as the king of online tax returns, TurboTax, it’s prices are very competitive and, in many cases, better than the competition:
|Deluxe: $39.99||Plus: $27||Classic: $17||Deluxe: $34.99||Families: $24.95|
|Premier: $59.99||Freelancer: $39||Premium: $35||Premium: $54.99||N/A|
|Self-employed: $89.99||Premium: $5||Self-employed: $55||Self-Employed: $74.99||Self-employed: $44.95|
It’s hard to do a true comparison based on pricing because each site offers something a little different in each of their packages.
However, one of the best ways to do a solid comparison is by looking at how much the site is charging you for the most complex returns, which would be a self-employed taxpayer or a small business.
1040.com’s $44.95 fee for these types of labor-intense returns is the second-best of the bunch, finishing around $6 behind TaxAct’s $39.
Tools and Features Available on 1040.com
The website is home to a variety of resources to help you navigate your taxes. Their Tax Guide section acts as an instruction manual for your tax return, walking you step-by-step through entering information.
This section also gives you explanations of what each section of your taxes mean and tells you what some of the tax-specific jargon means, too.
Based on what we saw on the page when we did our research, 1040.com seems to provide you the information you need for just about every tax situation you’d encounter when you file for them.
For example, they have entire sections dedicated to important topics like Taxes for Family. In fact, the Taxes for Family section has 12 sub-sections that cover pretty much everything you’d need to know about filing as a head of household or as a member of a household.
This impressive series of educational resources could be an advantage for you if you get confused by some of the language you encounter while filing your taxes.
In many cases, the software will do all the behind-the-scenes calculations. However, you’re responsible for entering the right information. If you have any doubt as to what something means or which information you should enter, consult 1040.com’s Tax Guide.
Pro tip: 1040.com’s tax guides can be downloaded in PDF form.
Our Final Thoughts About 1040.com: Pros and Cons
Filing your taxes can become a headache if you’ve got a complex tax situation that includes a mortgage, property taxes, mortgage credits, self-employment income, marketplace insurance and kids.
Online tax software brings some peace of mind because it’s created with the consumer in mind. These platforms provide enough information to where you can understand what’s happening a lot better than you could if you were thumbing through the IRS’ pamphlets and workbooks.
That’s one of the advantages specific to online tax software like 1040.com. Another advantage this site has that’s unique to the site is that they’ll donate to clean water initiatives when you do your taxes with them.
Based on our research, we’d say that the site’s affordable rates for more complex tax returns are its greatest strength. Their prices for self-employed tax returns are better than H&R Block, TaxSlayer and TurboTax.
The downside to the site is that, in our opinion, there isn’t much feedback about their mobile apps so it’s very hard to tell how well they perform. As more and more consumers use their phones and tablets to do their taxes, 1040.com’s iOS and Android apps will be crucial.
If you’re having a hard time figuring out which tax software is right for you, take a look at our Best Tax Software Guide. We do an in-depth analysis of TurboTax, H&R Block, TaxSlayer and TaxAct. You’ll be able to see exactly what each pricing tier offers.
Also, you may want to read what we wrote about using a tax accountant versus using tax software. We talk with several tax experts to help you know when it may be a wise choice to pay more for an accountant and when online software is the best fit.