Benjamin Franklin once remarked that only two things were inevitable: Death and taxes.
For many people, preparing one’s taxes can be a challenging, confusing, or expensive endeavor. Those challenges increase when you’re in the military as you introduce multiple types of pay and frequent relocations to the equation.
Fortunately, due to advances in technology, it is now possible to use tax software to help you with this process. It is affordable, time-saving, and lowers the risk of mistakes significantly.
There are many tax software products to choose from. In this article, we’ll be taking a look at Liberty Tax.
Table of Contents
How Liberty Tax Works
Liberty Tax offers preparation and filing services to both private individuals and businesses.
Liberty Tax’s interface uses a step-by-step interview approach. You will have to answer questions about the property you own, your dependents, your residency throughout the year, and so forth.
The software uses your answers to determine your filing status, the schedules and forms you must import to complete your return. The platform will also detect which software version most applies to your tax situation to make a recommendation.
After selecting your plan, you must choose the schedules and forms to fill out. If you are unsure of which form to pick, you can use the “Learn More” buttons to provide you with more information on each option.
The interface is relatively simple, and should allow you to smoothly prepare and file your taxes. If you have experience with the eSmart tax platform, you will notice many similarities and find the process quite easy.
Liberty Tax Features
Audit Support
If there’s one word that you don’t want to hear about your taxes, it has to be “audit.” Liberty provides an audit support service to help you if you’re unlucky enough to be audited.
When you receive an audit notification from the IRS, Liberty Tax will review all correspondence you receive from the IRS and provide you with assistance in responding to them.
This service is free if you submit your tax return via Liberty’s platform, but it doesn’t include representation during the audit process.
Enhanced Audit Assistance
Enhanced audit assistance is an add-on package that you can purchase, which includes pre-audit aid with the documents that the IRS may request from you, assistance in responding to the IRS’s correspondence, and post-audit advice on your options.
This add-on package doesn’t include representation during the audit process.
Maximum Refund Guarantee
Liberty Tax provides their clients with a maximum refund guarantee.
Liberty Tax will refund the money you paid if you submit the same return to the IRS with competitor software and receive a higher refund or lower federal tax liability.
Help Sidebar
A valuable feature that Liberty Tax offers is a help sidebar that you can use to:
- Locate and contact the nearest Liberty Tax office
- Access the platform’s FAQ section to troubleshoot issues
- Start a live chat session with one of the support team members
- Get tax help if this is included in your plan
- Real-time refund display
In the upper right corner of the screen is your tax refund. This amount changes in real time as you enter information and make changes.
Tax Estimator
Liberty Tax’s tax estimator is a mini tax return that you can use to estimate the size of your refund or tax liability before you file.
Additional Features and Benefits
There are quite a few features available to Liberty Tax users.
- Credit Maximizer: You want to be able to get back every cent you’re allowed. The Credit Maximizer feature will go through the details you’ve provided and find as many legal deductions and credits as possible.
- Import forms: With this feature, you can download your W-2 and previous tax return, and the relevant information will automatically populate into the new form. There’s no need to worry about missing anything or transcription errors.
- Tons of online calculators and tools: Aside from the fun value of these tools, they are also extremely useful. When you’ve finished playing around with how much tax you’d pay if you earned a million dollars a month, there are some useful organizational tools here.
- Expert advice: As a client, you have access to a team of tax experts. They can help you deal with any questions you might have when completing your return.
- Free amendments: You might think most tax software would allow you to file amendments for free. It turns out that, in most cases, you pay close to full price for an amendment, but not with Liberty.
- Idiot-proof interface: With so many online services, you hit a wall regarding interface usability. In this case, the interface is so simple you won’t need a kid to help you navigate it. It’s pared down and purely functional.
- Plenty of support: If you have a query, you can phone in, email, drop into one of the 4,000 branches, hit the company up on social media, or use the instant chat option. There are tons of ways to get the help that you need.
- In-person assistance: If the online app isn’t working out for you, you can transfer over to one of the branches for in-person assistance.
- Advance on your refund: If you can’t wait to get your hands on all that tax money, the company may be able to help you out with an advance. It works similarly to a payday loan – when the refund comes in, you pay back the advance plus interest.
Liberty Tax Versions
Start for Free
Liberty Tax doesn’t offer a free plan to file even the simplest returns.
What it does offer is the ability to start filling out your tax forms for free without needing to pay until you actually file them.
This allows you to take advantage of their maximum refund guarantee if you find a higher refund or lower liability with a different program.
Basic
If you have a moderately complex tax situation that includes itemized deductions and a health savings account, you can prepare and file your tax return with this version.
If you are the owner of a sole proprietorship or receive income from investments, this plan will not be suitable as it doesn’t support the relevant forms, for example, Schedule C.
Features of this plan include the following:
- Schedule A support: Allows for itemized deductions.
- Schedule B support: If you made more than $1,500 in interest and dividend income throughout the year.
- Form support: For the necessary forms for health savings accounts as an alternative to an insurance plan.
Deluxe
The Deluxe plan offers all the features of the previous versions and support for Schedule C filing, which allows you to claim income from self-employment business activities, which could be ideal for military spouses with freelance income.
This plan does not accommodate complex tax situations like income from property, and it is unsuitable for filing capital gains or losses.
If you select this plan, Liberty Tax will provide you with Pro Tax Support without requiring you to pay the prescribed fee that other clients pay.
Premium
The Premium version is geared toward allowing people with complex tax situations to prepare and file their tax returns.
This plan supports filing for capital gains and losses from small business activities and property sales, as well as income from rental property and farming.
This version also supports Schedule K-1, which allows you to report business income as a shareholder in an S-corporation or private partnership.
Cost
Unlike its competitors, Liberty Tax offers low-cost tax preparation and filing services. This does not mean that their services are limited, however.
State filing costs for all plans start at $36.95.
Federal filing costs, however, vary:
- Basic: $45.95
- Deluxe: $65.95
- Premium: $85.95
Should You File with Liberty Tax?
Let’s walk through some of the pros and cons of filing your taxes with Liberty Tax.
Pros
- Usability: Software features a straightforward interface.
- Locations: Access to more than 4,000 brick-and-mortar Liberty Tax branches.
- Mobility: Complete mobility through Liberty Online return with the help of tabs.
- Refund amount: Features real-time refund reveal.
- Form imports: Ability to import W-2 and other forms from employer and competitor platforms.
- Audit aid: High-quality audit assistance.
- Advanced options: Higher-tier versions allow for Schedule C filing and small business income reporting.
Cons
- No free filing: Liberty Tax offers no free filing option.
- Cost: Liberty Tax plans cost around 50% more than those of similar platforms.
- Limitations: Low-priced versions are not suitable for complex tax filing.
- Logout time: The platform automatically logs out after a short time.
- Support Hours: If you do your taxes after hours, you may have difficulty reaching the support team.
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