FreeTaxUSA
FreeTaxUSA is an online tax preparation service offering free federal tax filing and $14.99 state returns. Owned by TaxHawk, Inc., a private Utah-based company founded in 2001, it supports a wide range of tax situations including self-employment, rental income, and investment income without requiring tier upgrades. It is an original member of the IRS Free File Alliance, offering free filing for taxpayers with AGI of $48,000 or less.
Score generated by AI agents based on publicly cited evidence and reviewed by the project maintainer. Not independently validated.
Score History
Timeline events are AI-curated from public reporting. Score trajectory is derived from documented events.
TaxHawk was founded in Provo, Utah by Dane Kimber and a CPA colleague with the mission of making tax filing affordable. The company launched FreeTaxUSA.com with free federal filing and low-cost state returns, establishing a straightforward consumer-aligned business model from day one. As a tiny private startup with no outside investors, the company had minimal structural incentive for extraction.
TaxHawk joined the IRS Free File Alliance as one of 17 original members, agreeing to offer free filing to low-income taxpayers through IRS.gov. This formalized FreeTaxUSA's dual model: free federal filing for everyone on its own site, plus Free File program access for qualifying taxpayers. The Alliance arrangement included an IRS non-compete clause that gave all members, including TaxHawk, structural benefit from blocking government competition.
FreeTaxUSA grew to the fourth-largest DIY tax preparation software in the United States, having filed over 7 million federal returns. TaxHawk testified in the DOJ's antitrust case against H&R Block's proposed acquisition of TaxAct, with the court citing TaxHawk as a competitive maverick. The company remained privately held with no acquisitions, maintaining its low-cost consumer-aligned model while the broader industry consolidated around Intuit and H&R Block.
TaxHawk joined the IRS Security Summit coalition, investing in identity theft prevention and fraud detection alongside the IRS and state agencies. The partnership contributed to a 50% reduction in identity theft on federal returns by 2016. FreeTaxUSA added optional paid services including Deluxe support and audit defense, modestly expanding its monetization while keeping the core federal product free. The company continued operating as a small private firm in Provo, Utah.
ProPublica's investigation exposed that multiple Free File Alliance members, including TaxHawk, had used code to hide their Free File landing pages from search engines, steering eligible low-income taxpayers toward paid services. This was the most significant blemish on TaxHawk's record. The 2019 IRS addendum banned deindexing and dropped the IRS non-compete clause, leading to Intuit and H&R Block departing the Alliance while TaxHawk remained as a participating member.
FreeTaxUSA remains a healthy, low-cost alternative in the tax preparation market. The company won the Kiplinger Readers' Choice Award three years running, added W-2 photo import and 1099-B upload features, and continued free federal filing for all complexity levels. State filing increased modestly from $14.99 to $15.99. With IRS Direct File shuttered and the Free File program strengthened, TaxHawk's position as a remaining Alliance member providing genuine free service is more important than ever.
Alternatives
The IRS's own free federal tax filing tool, available in 25 states as of 2025. Easy switch — completely free for both federal and state filing in supported states with no upsells, no paywalls for complex situations, and no data shared with private companies. Only valid if your state is supported and your return is relatively straightforward.
Low-cost alternative with free federal filing for simple returns and $24.95 for complex situations including self-employment. Easy switch — supports prior-year data import and has comparable UI simplicity to FreeTaxUSA. A reasonable option if you need guided interview-style filing with audit support.
Dimensional Breakdown
Summaries below were written by AI agents based on the cited evidence. They are editorial interpretations, not independent research findings.
Dimension History
Timeline (28 events)
TaxHawk Inc. Founded in Provo, Utah
Dane Kimber and a CPA co-founded TaxHawk, Inc. in Provo, Utah, building tax preparation software with the goal of making tax filing fast, easy, and affordable. The company would launch FreeTaxUSA.com as its consumer brand, offering free federal tax filing regardless of return complexity.
IRS and Free File Alliance Sign Original Agreement
The IRS signed a public-private partnership agreement with 17 tax software companies, including TaxHawk, forming the Free File Alliance. The agreement required members to collectively offer free online tax preparation to at least 60% of taxpayers ranked by AGI. Critically, the IRS agreed not to compete with the private sector by building its own free filing system.
IRS Free File Program Launches for 2003 Filing Season
The Free File Program launched through IRS.gov, offering free electronic tax preparation and filing to eligible taxpayers for the first time. TaxHawk's FreeTaxUSA was among the original providers. Over 2.8 million returns were filed through the program in its first year, establishing the public-private partnership model for free tax filing.
Free File Agreement Renewed with Expanded 70% Coverage
The IRS and Free File Alliance extended their partnership for four additional years through 2009. The renewed agreement expanded coverage from 60% to 70% of taxpayers, making approximately 93 million taxpayers eligible for free filing in the first year. No single alliance member could cover more than 50% of total taxpayers.
DOJ Files Antitrust Suit to Block H&R Block-TaxAct Merger
The Department of Justice filed suit to prevent H&R Block's $287.6 million acquisition of TaxAct maker 2SS Holdings. The DOJ argued the merger would leave only two significant competitors controlling 90% of the online DIY tax market. TaxHawk provided testimony during trial, with the court noting TaxHawk was 'every bit as much, if not more' of a competitive maverick as TaxAct.
Federal Court Blocks H&R Block-TaxAct Merger
U.S. District Judge Beryl Howell issued a permanent injunction blocking H&R Block's proposed acquisition of TaxAct. The ruling preserved competition in the online DIY tax preparation market. H&R Block announced on November 15 it would not appeal, protecting smaller competitors including TaxHawk/FreeTaxUSA from market consolidation.
FreeTaxUSA Announces 7 Million Federal Returns Filed
TaxHawk issued a press release for its 2011 tax season software, noting that over 7 million federal tax returns had been filed through FreeTaxUSA. The company described itself as one of the fastest-growing tax preparation websites and was identified as the fourth-largest DIY tax preparation software in the United States.
IRS Convenes Security Summit to Combat Identity Theft Fraud
The IRS convened the Security Summit, a public-private partnership with CEOs of leading tax preparation firms, software developers, payroll processors, and state tax administrators to combat the growing epidemic of identity theft refund fraud. The summit established data-sharing protocols where software providers shared approximately 20 data elements from tax returns to identify fraud.
TaxHawk Formally Joins IRS Security Summit Coalition
TaxHawk CEO Scott Rasmussen announced the company's commitment to the IRS Security Summit coalition, pledging to invest in detecting and preventing identity theft tax fraud. TaxHawk committed to working closely with the IRS on sharing fraud indicators and implementing stronger authentication measures for FreeTaxUSA users.
Security Summit Efforts Reduce Identity Theft by 50%
The IRS reported that Security Summit partnership efforts, including contributions from TaxHawk, led to a 50% reduction in new reports of stolen identities on federal tax returns compared to 2015. The IRS stopped $1.1 billion in fraudulent refunds claimed by identity thieves on over 171,000 returns between January and April 2016, up from $754 million the prior year.
IRS Free File Agreement Strengthened for 2019 Season
The IRS and Free File Alliance announced a renewed agreement that strengthened taxpayer protections. Key changes included removing 'value-add' buttons from Free File landing pages, requiring returning taxpayers to see the Free File option first, and providing an easy return path to IRS.gov. The agreement extended through October 2021.
ProPublica Reveals Free File Companies Hiding Pages from Search Engines
ProPublica reported that TurboTax deliberately added 'noindex' code to hide its Free File landing page from Google and other search engines. A subsequent Congressional investigation revealed that FreeTaxUSA, TaxSlayer, and 1040.com used similar code to deindex their Free File pages, steering eligible taxpayers toward paid services instead.
Senators Call for Investigation of Free File Abuses
Senators Elizabeth Warren, Richard Blumenthal, and others sent a letter to the IRS calling for refunds and investigations into Free File Alliance members. Congressional staff had found that FreeTaxUSA, TaxSlayer, and 1040.com were hiding Free File landing pages from search engines, similar to Intuit and H&R Block. The senators argued this practice undermined the program's purpose of helping low-income taxpayers.
IRS Drops Non-Compete Clause and Bans Search Engine Deindexing
The IRS and Free File Alliance signed a landmark addendum to their agreement with two major changes: the IRS removed the longstanding provision that barred it from building its own free filing system, and the addendum expressly prohibited Alliance members from 'engaging in any practice' that would exclude Free File offerings from organic internet search results. This directly addressed the deindexing practices revealed by ProPublica.
TIGTA Audit Finds 14 Million Taxpayers Paid for Services That Should Have Been Free
The Treasury Inspector General for Tax Administration published an audit finding that at least five of 12 Free File Alliance companies used code to hide free services from search results, and that 14 million taxpayers paid fees when they were eligible for free filing. The audit concluded the IRS did not provide adequate oversight of the Free File Program.
H&R Block Exits Free File Alliance
H&R Block withdrew from the IRS Free File Alliance after the 2019 reforms banned deindexing and lifted the IRS non-compete clause. The departure left smaller companies like TaxHawk with greater responsibility for serving low-income taxpayers through the program.
NY DFS Report Confirms TaxHawk Among Companies That Deindexed Free File
The New York Department of Financial Services published a year-long investigation finding that five tax preparers, including TaxHawk, 'deliberately edited the code in their landing pages under the program to hide those landing pages from taxpayers from search engine results.' The report noted that only 2.5 million of 100 million eligible taxpayers used Free File that year.
Intuit Exits Free File Alliance
Intuit announced TurboTax would no longer participate in the Free File Program, following H&R Block's 2020 departure. The two largest tax software companies had both left the Alliance after the 2019 reforms banned deindexing and opened the door for IRS competition. TaxHawk remained as one of eight participating companies serving eligible low-income taxpayers.
Intuit Agrees to $141 Million Settlement for Deceptive 'Free' TurboTax Advertising
All 50 states and DC signed a $141 million settlement with Intuit for deceiving millions of low-income Americans into paying for TurboTax services that should have been free under the Free File Program. Approximately 4.4 million consumers received payments. TaxHawk/FreeTaxUSA was not implicated in this settlement, as its free federal filing was genuinely available to all users regardless of income.
Inflation Reduction Act Mandates IRS Direct File Feasibility Study
President Biden signed the Inflation Reduction Act, which included $15 million for the IRS to study the feasibility of a government-run direct e-file system. The study found that over 70% of taxpayers would be interested in using an IRS filing tool. This represented the first concrete step toward government competition with the tax preparation industry, including Free File Alliance members like TaxHawk.
The Markup Reveals Tax Prep Sites Shared Data with Facebook via Meta Pixel
The Markup's investigation found that TaxAct, TaxSlayer, and H&R Block had been sending taxpayer financial data to Meta (Facebook) through tracking pixels embedded on their websites. The data included filing status, income, and refund amounts. Notably, TaxHawk/FreeTaxUSA was not among the companies found to be sharing data with Meta or Google, consistent with its privacy policy of not selling personal information.
IRS Launches Direct File Pilot in 12 States
The IRS launched its Direct File pilot program, offering free federal tax filing directly through the government in 12 states. Over 140,000 Americans filed in the first five weeks, saving an estimated $5.6 million in tax preparation fees. This represented the first time the IRS competed directly with private tax software companies including Free File Alliance members like TaxHawk.
FreeTaxUSA Wins Kiplinger Readers' Choice Award Second Consecutive Year
FreeTaxUSA was named the top choice among tax software programs for the second consecutive year in the 2024 Kiplinger Readers' Choice Awards. Readers praised the program's ease of use for complicated returns and its unmatched value, with one reader noting 'It is just as good as TurboTax at a fraction of the cost.'
FreeTaxUSA Adds W-2 Photo Upload and 1099-B Import Features
For the 2024 tax year, FreeTaxUSA added the ability for users to snap a photo of their W-2 form and have it auto-filled via OCR, along with support for uploading Form 1099-B and Form 8949 for stock and cryptocurrency transactions. These features reduced manual data entry while maintaining the free federal filing model.
IRS Direct File Expands to 25 States, 296,000 Returns Filed
The IRS expanded Direct File to 25 states for the 2025 filing season, covering a broader range of tax situations. Approximately 296,531 taxpayers successfully filed through the program for tax year 2024. The expansion brought direct government competition to more Free File Alliance members, though Direct File was limited to simpler return types.
FreeTaxUSA Wins Kiplinger Readers' Choice Award Third Consecutive Year
FreeTaxUSA was named the top choice among tax software programs for the third consecutive year in the 2025 Kiplinger Readers' Choice Awards, reinforcing its reputation as the best value in online tax preparation. The company's continued recognition reflected stable product quality and user satisfaction.
IRS Shutters Direct File Program, Shifts Focus to Free File
The IRS announced Direct File would not be available for the 2026 filing season, citing low participation (296,531 users) and high costs ($41 million, or $138 per return). Treasury Secretary Scott Bessent stated 'the private sector can do a better job.' The IRS said it would focus on strengthening the Free File program, benefiting remaining Alliance members including TaxHawk.
IRS Free File Opens for 2026 with Raised AGI Limit of $89,000
The IRS Free File program opened with eight participating partners including TaxHawk/FreeTaxUSA, with the AGI eligibility limit raised to $89,000 — a $5,000 increase from the prior year and one of the largest annual increases in the program's history. FreeTaxUSA offered free state filing for all states through the Free File program, with the standard state filing price outside the program at $15.99.