Liberty Tax Review

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Benjamin Franklin once remarked that only two things were inevitable in life: death and taxes. For many people, preparing one’s own 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…

Benjamin Franklin once remarked that only two things were inevitable in life: death and taxes.

For many people, preparing one’s own 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.

There are a number of benefits to using software to prepare and file your taxes. It is affordable and time-saving, and it lowers the risk for mistakes significantly.

There are many tax software products to choose from. In this article, we’ll be taking a look at Liberty Tax, one of the most reputable and popular products available.

How it Works

Liberty Tax logoLiberty Tax offers preparation and filing services to both private individuals and businesses. To help you prepare your tax return, Liberty Tax’s interface uses a step-by-step interview approach.

You will have to answer questions about property that you own, your dependents, your residency throughout the year, and so forth.

Liberty Tax will then use your answers to determine your filing status as well as the schedules and forms you have to import to complete your return.

The platform will also determine which software version is most applicable to your tax situation to make a recommendation.

After you have selected your plan, you have to 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.

As you work on your return preparation, you can go to different sections with tabs to make changes and complete information fields.

The interface is relatively simple, and even if you have no prior experience with taxes, you will be able to prepare and file your taxes without experiencing any issues.

If you have experience with eSmart tax’s platform, you will notice a lot of similarities and find the process quite easy.

Liberty Tax Features

Audit Support

When you receive an audit notification from the IRS, Liberty Online 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 regards to 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.

If you submit the same return to the IRS with competitor software and receive a higher refund or lower federal tax liability, Liberty Tax will refund the money you paid for their tax preparation services.

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 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.

File your taxes with Liberty Tax here>>

Versions

Start for Free

Unfortunately, Liberty Tax doesn’t offer a completely free plan to file even the simplest of 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.

Simple (EZ)

This version doesn’t support schedules for investments or small business income, and it isn’t suitable for deduction itemizers either. It does, however, include several high-value features that are listed below.

  • Access top prior year tax returns
  • W-2 import directly from your employer
  • Import from competitor software
  • Professional tax support at an additional fee
  • Schedule EIC support that will enable you to claim for earned income tax credit
  • Ability to amend an existing tax return to rectify issues
  • Free chat, email, and phone support

Basic

If you have a moderately complex tax situation that includes itemized deductions and a health savings account, you will be able to 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 over $1500 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 as well as 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 not suitable 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

In comparison with 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:

  • Simple (EZ): $29.95
  • Basic: $39.95
  • Deluxe: $34.95
  • Premium: $34.95

Federal filing costs:

  • Simple (EZ): $34.95
  • Basic: $44.95
  • Deluxe: $64.95
  • Premium: $89.95

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 over 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.

Bottom Line

Unlike most of its competitors, Liberty Tax doesn’t offer a free option. However, its four paid tiers offer fairly comprehensive support for a variety of financial situations.

And for some people, the appeal of driving to a physical location and speaking to a real tax expert (albeit for an additional cost) cannot be overestimated.

Whether you’re serving abroad or at home, you have a variety of options at your disposal with Liberty Tax. You should also know that there are a number of free tax filing options available to military members.

File with Liberty Tax today>>

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About Ryan Guina

Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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