Scholarships are one of the best ways to pay for college - it's free money. It's why we list scholarships as our #1 option on our list of Ways To Pay For College.

But trying to find college scholarships is no easy task. With tuition prices being so high many local scholarships have stiff competition and when looking for scholarships online you have to weed through layers of junk to find the legitimate ones to apply for.

Even though trying to find scholarships can be a pain it’s something you should most definitely do. You might be surprised - the competition might not really be as tough as you think. And if you systematize your application process, you can apply for a lot of scholarships in a little time.

Here's what you need to know about finding college scholarships.

What Kind of Scholarships Are Available and How Do I Find Them?

There are several different type of scholarships. Some scholarships are merit based, meaning your grades need to be kept to a certain level to receive them or you need to show exceptional performance in something such as a sport or extra-curricular.

Other types are awarded based on location, income, demographic (such as being a certain age), or degree based. While trying to find scholarships it’s important that you look for the ones in which you actually qualify for.

Here are some of the best strategies for finding college scholarships.

Like this infographic? You can find a printable version here: Infographic Download.

Have Your Parents Check with Their Employer

There are many employers that will award scholarships to the children of their employees. Have your parents check in with the HR department at work.

Here are just a few places that do have scholarship programs for children of their employees:

• Federal Offices
• Verizon
• Intel
  

If you’re currently employed it’s also a good idea to check in with your employer to see if scholarships are offered.

Try Your Financial Aid Office

Your financial aid office will be able to give you information on different types of scholarships from federal agencies, state agencies, work study, and other campus scholarships.

After checking with your parents’ employer your financial aid office should be the next step.

Note: your school's financial aid office is typically first-come, first-serve. It's important that you apply early, and fill out the FAFSA. If you don't fill out the FAFSA, you won't be eligible for any scholarships from your school.

Also, if you're declined early on, you might check back in the summer after people have made their decisions to enroll. Some people who were offered scholarships may decline enrollment, opening up access to more funds which you could be awarded.

Check with Community and Religious Organizations

Many community and religious organizations offer scholarships locally. This includes sport teams, churches, and even local restaurants. While the sums of these scholarships might be low they still help and are worth applying to.

Use the U.S. Department of Labor’s Free Scholarship Search Tool

When it comes to finding scholarships online scams are plentiful. One way to prevent getting scammed is to use the US Department of Labor’s Free Scholarship Search Tool.

You can use this website to search for scholarships based on state, study level, and affiliation. This makes finding more scholarships you might be eligible for easy.

Check with Professional Organizations

If you are going into college with a specific career in mind then it might be worth it to go ahead and join the professional organization in your niche. Almost every career field has a professional organization and most are free or inexpensive to join. And best of all, a lot of professional organizations award scholarships!

Here are just a few professional organizations that offer scholarships:

• The American Bar Association
• The American Marketing Association Foundation
• The National Women’s Study Association
• The National Society of Professional Engineers

Also, make sure you check out these massive lists:

• Best Scholarships For Women
• Best Scholarships For Math, Science, and Engineering

Search on Scholarship Sites

Bold.org is a free website where you can find scholarships, internships and more. When you create an account you’ll be able to search for scholarships based on your interest, degree, location, and skills. Since you can customize your searches you’ll be far more likely to find scholarships that you actually qualify for.

Check out this list of other Scholarship Search Websites.

Try State Based Grants

You can find state based scholarships and grants in our guide here: Student Loans and Financial Aid by State. Just click on your state and see if there is anything available for you.

State based grants come in the form of free financial aid. Some states will require that you complete the FAFSA to see if you qualify to receive a grant. Other states will require that you complete a different application. You should be able to get more information on the requirements at your college’s financial aid office.

Here are some of the different types of state based grants available:

Needs Based Grants – These are awarded based on financial need.

Merits Based Grants – These type of grants are awarded to those who exhibit above average performance. This could be in the form of extra-curricular activities, such as being a star athlete, or academic performance.

Some states also award a hybrid of needs/merit based grants.

High Need Fields of Study – Your state may award grants to students studying in high need STEM fields.

Student with Disabilities – You may also find special state grants, and even scholarships, if you have a disability.

It’s important to note that most state grants are awarded on a first come, first serve basis so make sure you get your application in on time.

Make Sure You Fill Out a FAFSA

The Free Application for Federal Student Aid, better known as the FAFSA, should be one of the first things you worry about. The FAFSA can help you get college grants and can be used as an application for certain state grants as well.

With the FAFSA you may be able to qualify for the following federal grants:

• Federal Pell Grants
• (FSEOG) Federal Supplemental Educational Opportunity Grants
• (TEACH Grants) Teacher Education Assistance for College and Higher Education
• Iraq and Afghanistan Service Grants

What to Watch Out For

There are tons of legitimate scholarships and grants you can apply for. While you should take your time and apply for as many scholarships as possible you also want to be on the lookout for scams. As a general rule of thumb you should never pay an application fee and be wary of scholarships services that guarantee success. You also shouldn’t pay for a list of scholarships. If you look in the right places you can find scholarships yourself.

If after applying for scholarships you’re still left with a hefty tuition bill be sure to check out our Ultimate Guide to Student Loan Debt for everything you need to know to make intelligent student financing decisions. And you also may be eligible for student loan forgiveness based on your degree so be sure to check that out too.

529 Plans are tax-advantaged investment accounts designed to help parents (and grandparents and other caring adults) pay for educational expenses.

The plans offer an ideal account for parents who want to save money for a child’s college expenses, but they also work for other educational expenses too!

After years of diligent saving and investing, you can take tax-free distributions money from a 529 account as long as the money is spent on qualified educational expenses. Though the plans have some complications, we've broken down how 529 plans work into simple terms.

What Is A 529 Plan?

A 529 plan is a government-sponsored education savings account that offers federal tax benefits. Each state creates and sets up the rules for its' own plan. Investment growth inside of a 529 plan isn’t taxed as long as the money is used for a qualified educational expense. Most people who invest in 529 plans intend to use the money to help pay for college, but they are growing in popularity for other qualified expenses too.

One unique feature of 529 plans is that each state offers its version of the 529 plan. Technically, you can open a 529 plan in any state (or multiple plans across states too). But before you start comparing features of each plan, you will want to review the tax incentives in your state. You may need to contribute to the 529 plan from your state to qualify for the tax incentives. 

There are two major types of 529 plans. The first is a prepaid tuition plan. Under this plan, you can buy college credits at today’s prices, and your beneficiary can use those credits in the future. Nine states (Florida, Maryland, Michigan, Mississippi, Nevada, Pennsylvania, Texas, and Washington) offer prepaid tuition plans. Prepaid tuition plans allow you to lock in higher education for today’s prices. Unfortunately, these plans tend to offer less flexibility than the second type of 529 plan.

The second type of 529 plan is an education savings account. These plans allow you to open an investment account on behalf of a designated beneficiary (usually your child). Investment options vary from plan to plan. However, most plans allow you to invest in mutual funds or low-cost index funds. 

How A 529 Plan Works

Now that you know what a 529 plan is, how does it work specifically?

First, you open a 529 plan - typically your state's plan.  

Second, you have an account owner (you - the parent or grandparent), and a beneficiary (the child you're using the plan for in the future). Note: you can also setup a plan to have yourself be both the plan owner and beneficiary.

Third, you deposit money into the plan - ideally you qualify for some tax incentives for your contributions. See this guide to which states offer tax incentives for 529 plan contributions. 

Fourth, you invest the money over time.

Finally, you withdraw the needed funds for qualified expenses tax-free!

One of the drawbacks of a 529 plan is that if you don't use the money for a qualified expense, you could face taxes and penalties on the money. Here's a full guide on how to avoid the 529 plan penalty.

Using 529 Plan Funds For Qualified Expenses

529 plans were originally designed to help parents save and invest for college expenses. But the accounts can now be used to pay for an array of qualified expenses including K-12 private education expenses, apprenticeship programs, student loans and higher education.

Today, qualified expenses can include:

• Tuition
• Room and board (including on-campus meal plans)
• Required technology items
• Textbooks and other required supplies
• Up to $10,000 per year of K-12 tuition.
• Up to $10,000 to repay student loans.

If a designated beneficiary doesn’t use all the funds in their 529 plan for educational expenses, the funds can be transferred to another family member (including the beneficiary’s siblings or the beneficiary’s children).

When that option doesn’t make sense, up to $35,000 can be contributed to the beneficiary’s Roth IRA account.

Tax Advantages For 529 Plan Contributions

The primary advantage of 529 plan contributions is tax-free growth and income inside the account. Neither the Federal government nor states tax investment income as long as the investments are inside of the account. Additionally, you will not have to pay taxes on the distributions as long as the money is used for a qualified expense. If the money is used for an unqualified purpose, the growth in the account is subject to a 10% penalty.

The Federal government doesn’t offer tax deductions or credits for contributing to a 529 plan. But many states offer tax credits or deductions when a person contributes to a 529 plan. These state tax incentives can make saving for college even more appealing. Contributing enough to claim your state’s tax incentive can put you well on your way towards saving for college for your child.

529 Plan FAQs

What are the contribution limits for a 529 plan?

Contributions to the 529 plan are based on the gift tax limits. In 2023, an individual can contribute up to $17,000 per beneficiary.

A couple can contribute up to $34,000 per individual. However, the $17,000 limit isn’t a “hard cap” on contributions. A person can “super-fund” an account with up to 5 years of contributions at one time. In 2023, the individual super-funding limit is $85,000 per beneficiary.

There are also limits on the total amount of money that can be contributed to a 529 plan per beneficiary. Lifetime contribution limits range from $235,000 to $531,000 depending on the plan being used.

Custodians who are concerned with lifetime contribution limits should carefully review a plan’s limits before signing up for that plan.

Should I use the 529 Plan offered by my state?

Most of the time, states that offer tax deductions or credits require you to open a 529 plan sponsored by your state. In that case, you should open the 529 plan offered by your state.

If you live in a state that offers no tax advantages for contributions (including in states with no State income tax), you can open a 529 plan wherever you want.

For example, you may choose a Nevada 529 plan which is sponsored by Wealthfront or Vanguard.

There are seven states (Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana, and Pennsylvania) that extend their credits to contributions in any 529 plan (not just the plan offered by that state). People living in these states can also choose whichever plan they like the most.

What are the alternatives to 529 Plan accounts?

A 529 plan is an ideal account to help parents save for their child’s college education. However, it’s not the most flexible account available.

When the funds in the account aren’t used for qualified expenses, the account owner will pay taxes on the investment growth. On top of that, you’ll pay a 10% penalty on all the growth in the account.

If you’re looking for a more flexible account for your child, a UGMA or UTMA may make more sense in your case. Parents looking to save for a disabled child may prefer to use an ABLE account which has more qualified expenses and different contribution limits.

Getting your MBA can be a big career and life goal. And figuring out the MBA admissions process can be tough.

Graduating from college doesn’t mean you’re completely done with school. Some college grads may go straight into graduate school after graduation while others may opt to work a few years to get some professional experience under their belt.

Going to business school after college is a popular route for a lot of young professionals. It provides valuable skills and experience that can lead to a variety of good jobs. With so many people competing for spots in top business schools, getting in can be more challenging than business school itself.

If you’re considering going to business school, there are a few things you’ll need to include in your application. Aside from test scores, MBA admissions committees look for softer skills that demonstrate whether or not someone is a well-rounded candidate who can add value to the school.

This MBA admissions guide will cover everything you need to consider before applying to business school.

What Does the MBA Admissions Process Involve

The MBA admissions process is a bit different from other admissions processes. Instead of focusing solely on test scores or essays, MBA programs want to find individuals who are well-rounded and will add value to each incoming cohort.

Think of it like the draft for your favorite sports team. The goal during the draft is to select the best players to build a high-performing team. MBA admissions committees approach MBA programs with a similar mindset.

The application process typically involves three rounds. Each round is an opportunity to gain admission into the school of your choice. While the application deadline can vary by school, many business schools follow the same schedule:

• Round 1: finishes in the fall
• Round 2: finishes around New Year’s
• Round 3: finishes in the spring

As each round progresses, spots for the incoming class fill up. While applying in the first round won’t guarantee you’ll get admitted, it may increase your odds.

That being said, applying in the first round may not be ideal for all candidates. If you didn’t get an ideal GMAT score or you’re an international student, applying in a later round might be better suited for you.

What Do MBA Admissions Programs Look at From Applicants?

When you’re ready to apply you’ll need to assemble all of your application materials together. This includes test scores, your transcript from undergrad, an updated resume, essays, and acing the interview. You'll also want to get letters of recommendation from mentors, employers, or advisors who can attest to your bona fides.

Standardized Test Scores

The Graduate Management Admission Test – or GMAT – is one of the most common standardized tests required for admission into an MBA program. Depending on the school, a GRE test score may also be acceptable.

While test scores aren’t necessarily the most important component of an MBA application, it does factor into how admissions decisions are made. Admissions officers use test scores to determine whether or not an applicant can handle the coursework associated with the MBA program.

Each school has its own test score standards but the top business schools usually look for candidates that have a GMAT score of 700 or higher. This won’t guarantee admission but it can be a useful benchmark, especially if you think you can retake the GMAT to boost your score, increasing your odds of getting in.

Aside from admissions, test scores for MBA programs are also correlated with national rankings. Outlets like the U.S. News & World Report are authorities on business school admissions. A program that wants to increase its rankings may seek out candidates with higher test scores in order to do so.

Preparing for the GMAT can take a few months, more if you think you might need to retake the test. Consider the score requirement for the schools you intend to apply to and develop a test taking strategy that aligns with your timeline for applying.

Related: GMAT vs GRE: Which Test Do You Need?

Undergraduate Transcript

Another score you might need to provide is your transcript from undergrad. Admissions officers are not only interested in your overall GPA, but they want to know if you’ve taken any quantitative courses and how well you performed in those courses.

This is important to consider if you’re still in college and anticipate applying to an MBA program later on. If you haven’t taken any quantitative courses – like calc or stats – consider adding a few to your course load to get them on your transcript. Again, these courses won’t guarantee admissions but they can help demonstrate your potential to succeed in an MBA program down the road.

Resume

Admissions officers aren’t just looking for candidates who do well on tests or get good grades. They want candidates who will contribute in a meaningful way too. Diverse professional experience is one thing admissions officers strive to provide in MBA cohorts.

Your resume is a place to demonstrate what you bring to the table. It not only shows which projects you’ve worked on and things you’ve accomplished in your career but it also reflects your potential to operate as a leader and work within a team.

Essays

Like most admissions applications, you’ll need to write and submit an essay to get into an MBA program. This is an opportunity for you to make a case to the admissions committee telling them why they should pick you out of hundreds of other applicants.

Business schools look for your strengths as a potential member of an incoming cohort and the value you bring to a school. The essay topic will vary by school and is usually chosen by the admissions committee. Be sure to write a succinct, well-written narrative answering the prompt while articulating why you want to be admitted into the particular program you’re applying to.

Interview

An MBA interview is usually part of the admissions process. This is another qualitative screening mechanism to filter out candidates. If the other parts of your application put you on the cusp of being accepted, acing the interview can be a way for you to seal the deal.

Each school may have a different interview process. Some schools may ask you to dive into your professional experience or explain different decisions you made during your career. Others may entail group interviews to evaluate how you interact with other candidates and demonstrate the value you could add to the program.

Related: Mastering The College Admissions Interview

Letters of Recommendation

The final part of the application package is obtaining letters of recommendation. These should be professional or academic in nature and be able to attest to your performance whether that’s at school or on the job.

It’s good practice to share your application materials ahead of time with the individuals you’ve asked to write your letters of recommendation. This ensures they are mindful to highlight your strengths. Keep your recommenders apprised of your application timeline so they have enough time to craft a well-written letter for you.

Tips for Getting into a Top MBA Program

If you’re considering applying to business school there’s a good chance you’re eyeing a spot at a top school like the Wharton School at the University of Pennsylvania or Harvard Business School. These schools churn out a large number of business professionals who have gone on to become CEOs of Fortune 500 companies or hold other prominent roles.

Aside from the formal application process, there are a couple of other things you can do to improve your application and increase your odds of getting into a top school.

If you can, make an effort to visit the school you want to attend. Walk around campus and visualize being a student there. This creates a setting for you to write your essay from. That can help you craft a more compelling narrative about why you want to attend that school specifically and why you should be considered for admission there.

You should also network with current students or alumni of the schools you’re applying to. Ask questions about their experience as a student. If you have a mentor who is an alumnus of the same program you’re applying to, ask for feedback on your application package.

Is an MBA Worth It?

Getting into business school is a challenge. For many young professionals, it’s worth it. But depending on your goals, it might not make sense for you.

For one, MBAs aren’t cheap. While you might be eligible for scholarships or your employer might cover your tuition bill, that isn’t guaranteed. There’s still a chance you could wind up paying for some – if not all – of your MBA out of pocket. If that’s the case you’ll want to make sure there’s a good ROI on your investment. An MBA can certainly help you get a high-paying job, but it’s never guaranteed.

Your long-term career goals will also help you determine whether or not it makes sense to get an MBA. If you want to get a job at a Fortune 500 company or a prestigious management consulting firm like McKinsey, having an MBA can help you get your foot in the door. But if you want to work for a startup or start a business of your own, you might find that an MBA isn’t very practical. A lot of the skills you’d need to excel in these roles can be acquired on your own without the price tag of an MBA.

Before going through the application process, consider if getting an MBA is actually worth it. Then if you decide it is, follow this MBA admissions guide to help you put together an application package that makes you a compelling candidate for the admissions committee at the school of your choice.

Graduate school is an opportunity to advance your education and further your career. While post-pandemic applications are up, actual enrollments are down, so right now is as good a time as ever to send in your application.

One huge perk of graduate school is that your career earnings are likely to be higher than if you only had a bachelor's degree.

For 2022, the Bureau of Labor Statistics reported an annual median wage difference of $11,908 (or $229 weekly). And that’s just the difference between a bachelor’s and a master’s – other professional or doctoral degrees can lead to even higher annual incomes.

So, what steps should you take to get started? We've got you covered.

In this graduate school admissions guide, we’ll talk about the decision to attend graduate school, the types of graduate programs available, how to choose the right school, and what you need to deliver a stellar application packet.

Should You Pursue Graduate School?

Pursuing graduate school was one of the best decisions I ever made, but it wasn’t a walk in the park. I put in a lot of hours mastering my skill, so to speak. If you’re interested in doing the same, start by asking yourself these questions:

• Why do I want to go to graduate school?
• What do I want to do with my graduate degree after I receive it?
• How will I choose the right program for me?
• How do I apply to graduate school?
• What is the cost of graduate school, and who will foot the bill?
• Will graduate school be worth it?

Finding answers to these questions can help you obtain clarity about your path forward before you invest your time, energy, and money into the application process. Why? Because, regardless of your motivation, you want to be sure the experience will provide a sufficient return on investment. It might even help to draft a pros and cons list to get your thoughts and concerns out and onto a piece of paper.

Will Graduate School Be Worth It Financially?

This is honestly the most important question you need to ask when considering whether to pursue graduate school. Is graduate school worth it?

There are, of course, circumstances that absolutely warrant attending graduate school. For example, entry into professional fields like law and medicine require advanced schooling and credentials - and the payoff can be worthwhile. Conversely, you may be in a unique position of having an employer who is willing to pay for your degree and you simply want to take advantage of that benefit. 

However, there are many graduate programs and degrees that aren't worth it. In fact, a recent study of 14,000 graduate programs found that 40% of masters' degrees had no return or a negative return (meaning you paid more than you'll ever earn back in your lifetime). 

The study found that 97% of master’s degrees in computer science, engineering, and nursing offer at least some positive return.

However, the study also found that 85% of masters degrees in the arts, humanities, and theology had a negative return. Surprisingly, 62% of MBAs also had a negative return. We discuss the MBA return on investment more here.

The bottom line is that before you commit to graduate school, please do your homework on the expected financial outcome of your decision.

Types Of Graduate Degrees

Graduate school typically refers to the work one does in pursuit of a master’s or Ph.D. These degrees may or may not be needed for your chosen career field. Conversely, law and medical school, while technically also graduate studies (meaning students must first earn a bachelor’s degree), are required prerequisites to entering a career in law or medicine. They are often referred to as professional degrees because they prepare students to work in very specific professions, requiring certain academic and licensing attainment.

Master’s Degree

The master’s degree is often referred to as a sprint because it only takes one to two years of full-time enrollment to complete. Common master’s degrees include a Master of Arts (MA) and Master of Science (MS), though specialized master’s programs are also available. This includes a Master of Business Administration (MBA) and a Master of Public Administration (MPA). Master’s degrees provide advanced exposure to a specific field and prepare students for more specialized yet versatile careers.

Doctoral Degree

If a master’s is a sprint, then a doctorate is a marathon. This degree requires several more years of study, typically four to seven years beyond a bachelor’s degree. It provides even more specialized training and prepares students for careers in academic and research-focused fields.

Professional Degree

A professional doctorate is the highest academic credential in its respective field. For example, a Juris Doctor (JD) is the highest academic achievement needed to become a lawyer, or a Doctor of Medicine (MD) to become a health practitioner. Professional degrees vary in length and focus on practical training specific to their field.

Applying To Graduate School

So, you’ve decided to go to graduate school – that’s one key decision out of the way! Now, what are you doing to prepare for the application process ahead? While many pieces of the application packet are general components required by all graduate programs, the degree you pursue will ultimately decide which entrance exam you’ll take and how to tailor your personal statement.

You can use the breakdown of application requirements below to identify your path forward.

Admission Requirements

Aside from the obvious requirement of obtaining a bachelor’s degree, some grad programs will look a bit deeper before admitting you. For example, most MBA programs require a bachelor’s from one of two types of accredited institutions.

Additionally, because graduate school builds on your existing knowledge and skillset, some programs require applicants to have at least some amount of work experience before being accepted. This is especially common for professional degrees.

In general, these are the application requirements to keep in mind:

• Transcripts: Applicants are required to submit transcripts from all previous universities. Not only do transcripts indicate your aptitude for academic success, but they also detail all coursework you completed.
• Minimum GPA: This is of particular importance, as professional degrees typically demand a higher GPA of their prospective students. However, a GPA within the 3.0-4.0 range should put you in a good position with most schools.
• Test Score(s): Applicants are required to submit scores from the respective standardized test taken for their program. (More on this below because this is where program requirements differ the most).
• Letters of Recommendation: Almost all programs ask for at least one letter of recommendation to verify your qualifications and past achievements.
• Personal Statement: Applicants are often asked to submit a personal statement (or “letter of intent”) to demonstrate your personal qualities and characteristics, as well as your interest in and commitment to graduate studies.

Graduate School Exams

Admissions exams deserve their own section because they can be the most anxiety-inducing aspect of the whole process. The test you take will depend on the degree you want to pursue, and there are differences in what these tests look for, so make sure you sign up for the right one.

You’ll typically take the GRE to enter into a standard master’s or doctorate program. The GRE tests critical thinking, reasoning, and analytical writing and is known to be accepted by a wide variety of graduate programs. Here’s an overview of the exam:

The GMAT was created specifically for MBA programs and is accepted by more than 2,400 academic institutions. The GMAT tests your analytical writing- and problem-solving abilities, as well as data sufficiency, logic, and critical reasoning skills. There are subtle differences in how the GRE and GMAT are structured, the types of questions asked, and total test time, but they are typically accepted by schools interchangeably. 

The LSAT is specific to – and a required component of – your law school admissions packet. Unlike the GRE or GMAT, your LSAT score is based on the total number of questions answered correctly. All test questions are weighted the same, so the total number of questions you get right matters more than any you get wrong.

The MCAT is required for acceptance into any medical school in the U.S. and most in Canada. Like the other tests listed, the MCAT assesses your ability to problem-solve and think critically. However, it also tests your knowledge of natural, behavioral, and social science principles that are requisite concepts in the field of medicine. Take a look at the breakdown below:

After Submitting Your Application

After you submit your application packet, it's time to wait. The admissions committee will review your materials along with those of other prospective students. Graduate schools receive hundreds of applications each year, so try to be patient with this part of the process.

Programs that stick to a December or January application deadline often send out acceptance notices by the end of March. However, programs that accept applications on a rolling basis can likely respond with a decision in 8-10 weeks. Some schools like to hold admission interviews, so you could use your down time to prepare for those.

Bringing It All Together

Deciding to pursue a graduate degree is exciting, but the application process can be costly and time-consuming. Focusing on why you want to attend graduate school, what you hope to do after, and how much school you can realistically afford will help narrow your search. Then, switch gears to assembling the items needed for your admissions packet, keeping these pro tips in mind:

• Build out a timeline from present day to the admissions deadline and work backward from that deadline to schedule your testing date.
• Reach out and talk to actual graduate students in the program you’re considering.
• Visit the campus to get a feel for the surrounding community and environment.

Note: The tax prep offers on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear), but it does not impact our independent reviews. The College Investor does not include all tax prep companies or all tax prep offers available in the marketplace, although we always strive to keep our content updated.

Free Tax Software? Companies Can Trick You With "Free" Offers

Most companies on this list offer free federal filing for select taxpayers. The trouble is that each company has different criteria for free filing, and most don't tell you what you have to pay until the end.

Aside from a small list of students and low-income households, almost every major filing service requires you to upgrade to the “Deluxe” tier to claim common credits. It can be frustrating when you don’t realize you have to upgrade until you’re an hour into the process or about to click the submit button. 

Most Americans must file both federal and state returns. Some companies offer free federal filing but require users to pay steep fees for state filing. State filing costs are sometimes hidden on pricing pages, so be careful when choosing that advertise free federal filing.

What about the IRS Free File Website? Yes, you can file for free here. But there are limits, specifically with your income. You must have an AGI of less than $73,000. Given the median household income is $74,580 according to the US Census, not even half of Americans would qualify (and the number is much less when you take into consideration actual tax needs).

What about the new IRS Direct File Program? Yes, this is free too. But it's very limited. You can't have investment income, including dividends. You can't side hustle. And it doesn't do state tax returns - so you may have to use tax software anyway, which would make it a real mess because traditionally tax software doesn't allow you to just do a state tax return only.

What about the IRS Free Fillable Forms? This is totally free and open to anyone. But you literally have to fill out the IRS forms yourself with no guided help, no calculations, nothing. Good luck!

What Companies Offer Free Federal And Free eFile State Tax Returns?

In 2024, Cash App Taxes is the only company offering free state and Federal filing for ALL users. Cash App Taxes (formerly Credit Karma Tax) offers a robust and user-friendly experience, audit support guarantees, and support for most common tax situations. However, there are limitations. For example, multi-state filing isn't supported.

H&R Block also offers a robust free pricing tier. You could qualify for this tier if you:

• Earned only W-2 income and 
• Received only unemployment or Social Security income 

The free tier also supports:

• Student loan interest deductions
• Educational credits
  
• Child tax credits

You'll have to upgrade for any other tax needs, most likely to the Deluxe tier.

Check out H&R Block Online here >>

We’re huge fans of H&R Block’s expanded free pricing and the completely free offering from Cash App Taxes. However, a free product may not fit you best in 2024.

Individuals with complex filing situations looking for a bargain may choose FreeTaxUSA - which offers free federal returns and $14.99 state returns. Active traders or others with complex situations may prefer premium software like H&R Block (higher tiers) or TurboTax.

List Of Free Tax Software Companies

FreeTaxUSA

FreeTaxUSA advertises itself as the best place to file your federal taxes for Free. It captures all forms and all individual tax situations on the Federal side. Unfortunately, it doesn’t include free state filing.

While it isn’t free, we still think FreeTaxUSA offers an excellent option for people with complex tax filing situations who want to save on tax preparation costs. It’s especially useful for K-1 income and multi-state filers who don’t qualify for Cash App Taxes.

Check out our FreeTaxUSA review here.

TaxSlayer

TaxSlayer is open and honest about only supporting simple returns on its free tier. While it doesn’t support Child Tax Credits or HSA contributions on its free tier, it supports student loan interest deductions and other simple needs.

Due to its limitations, we don’t recommend the free version. However, TaxSlayer Classic is a Premium software bargain, even for more complex filers, which earns it a spot on our best tax software list for those who can’t file for free.

You can read our full TaxSlayer Review here.

ezTaxReturn.com

ezTaxReturn only supports free federal filing for a limited subset of people. You must earn less than $50,000 and not have any dependents. You'll have to upgrade if you earn more than $1,500 in interest. All credits and deductions require upgrading to a paid version.

The company always charges for state filing.The free software is incredibly limited, and the software is difficult to use. Since you need to pay for state filing, we recommend skipping ezTaxReturn in 2024. 

Check out our ezTaxReturn review here.

IRS Free Fillable Forms

The IRS offers free fillable forms from mid-January through mid-October (when filing closes). If you’re used to filing your taxes with pen and paper, you might upgrade to these easy-to-use forms, but they’re just a small upgrade from a typewriter.

Generally, we prefer the ease of the tax filing software above. IRS fillable forms could make sense if you have little income and deductible expenses.

Why You Should Trust The College Investor

At The College Investor, we're your trusted guide in navigating financial decisions, including in picking the best free tax software. Founded in 2009, our platform has evolved into a comprehensive resource for personal finance advice.

Our expert team offers objective, carefully fact-checked advice and reviews to help you make informed choices. We focus on helping you understand the financial landscape, from managing student loans to building wealth. With our commitment to accuracy and up-to-date information, you can rely on us for dependable guidance in your financial journey.

Final Reminder About Free Tax Filing

The world of "Free Tax Filing" isn’t exactly free. Use the guide above to help you choose the right software for your situation. Also, don’t opt for free tax filing if it means missing out on big tax deductions.

Those who prefer to use expensive tax filing software do so because it offers more robust tools to help them feel more confident about their filing.

Frequently Asked Questions (FAQs)

Here are the answers to a few of the questions that people ask most often about free tax software:

Is there such a thing as free tax software?

Several companies offer free tax software to some customers. Unfortunately, most companies restrict who can file for free. In 2024, only Cash App Taxes is free for all users. However, H&R Block Free has a comprehensive version of free filing for state and federal filers.

Does free filing have restrictions?

Most companies restrict who qualifies for free filing. These companies need to make money, requiring most users to upgrade. If you choose to pay, make that determination from the get go. It’ll save you time because you won’t find yourself getting stuck with having to upgrade after you spent an hour or two entering all of your financial information.

Are federal and state tax returns free?

The FreeFile Alliance focuses on free federal filing. However, several companies offer free federal and state filing for a limited subset of households. For example, TurboTax, H&R Block, TaxSlayer, TaxAct, and Cash App Taxes offer free federal and state filing. Cash App Taxes is the only company offering free state filing to all qualified users.

Which tax software is free?

Cash App Taxes offers free filing to most filers. H&R Block is an expansive free option that is a bit easier to use than Cash App Taxes, so we recommend it to people who qualify.

FreeTaxUSA, TaxHawk, and OLT.com offer free Federal filing to all users but require people to pay for state filing.

Note: The tax software apps that appear on this site include companies from which The College Investor may receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all tax prep companies or all tax prep offers available in the marketplace, although we are always striving to keep our content updated with fair, in-depth reviews.

Best Overall Tax Software

The best overall tax software category represents the software that best meets the needs of a majority of filers. You’ll have to pay more for premium programs, but they make tax filing faster and more straightforward.

Winner: TurboTax

TurboTax is the easiest tax software to use. It’s pricier than others but makes tax filing easier than most competitors. In many cases, TurboTax users can import PDF and spreadsheet files with tax data or connect directly to your employer, bank, or investment company to automatically download your tax data.

While we don’t love the high price (and the fact they aren't very transparent about what you'll pay up front), TurboTax is the 900-pound gorilla of the industry, and its ability to download financial data is a huge time saver for anyone with multiple bank and investment accounts.

If you're new to preparing your own taxes, TurboTax makes is very easy, and that's worth it.

Runner-Up: H&R Block

Each year, we’re more impressed by H&R Block’s high-quality tax filing experience and functionality. Filers can import most tax PDF forms, so adding W-2 and 1099 forms is fairly painless. H&R Block doesn’t have the same integration functionality as TurboTax. However, it comes with the best option to convert from DIY tax software to in-person human support due to a huge network of physical H&R Block locations.

The clean user interface and question-and-answer guidance make H&R Block an excellent option for most people. H&R Block is a bit less expensive than TurboTax. The forms and features are excellent but fall a little short of our top pick. Nonetheless, most people will have a positive overall experience with H&R Block Online.

Runner-Up: Cash App Taxes

Cash App Taxes offers free federal and state tax filing for all users. The user experience is excellent, and you don’t have to worry about paying for upgrades, even when you have a long list of deductions. This free filing software is ideal for users who need to maximize their refund and have “slightly complicated” finances. If you don’t care about the bells and whistles of TurboTax and can make Cash App Taxes work for you, it’s a solid choice.

Cash App Taxes is our top recommendation for free tax filing too. It supports most tax situations (except K-1 income or multi-state filing). However, if you’re self-employed, moved to a new state, or work and live across state lines, you may need to go with a pricier competitor.

Runner-Up: H&R Block

H&R Block supports student loan interest and other educational credits on its free tier. The easy-to-use software makes tax filing a snap. The free version also includes tuition deductions. 

However, filers need to watch out for limits to the free tier that could trigger a required upgrade. Most credits and deductions aren't supported at the free level. People who contributed to an HSA, a traditional IRA, anyone with dependent care expenses, and those who made charitable contributions will need to upgrade.

Runner-Up: Cash App Taxes

Best Tax Liability Calculators For Crypto And NFT Traders

Cryptocurrency has seen several ups and downs, with major winning streaks and lengthy “crypto winter” losses. While you may want to put crypto losses behind you, getting the taxes right for past crypto investments is still required.

These tax packages aren’t full tax filing tools. Instead, they calculate the tax liability associated with crypto and NFT activity. You then export IRS Form 8949, which is required for calculating capital gains on trades. You can import Form 89490 into TurboTax and other tax software.

Winner: Koinly

Koinly is a great app for tracking all cryptocurrency accounts and wallets year-round for free. When tax season comes around, Koinly offers features to convert that crypto data into tax forms and reports.

The free plan lets you try everything out, but doesn’t generate tax reports. Full tax reporting costs $49 to $179 per tax year, depending on the number of transactions.

It works with nearly all types of trades, automatically matches transactions between accounts and wallets, and downloads from most exchanges via APIs. It also downloads wallet data directly from each blockchain network for self-custody wallets. 

Runner-Up: CoinTracker

CoinTracker is a robust cryptocurrency tracking and tax reporting software. We don’t love the pricing, but it has some of the best features and ease of use of any cryptocurrency tax solution. It also integrates with over 500 exchanges, wallets, and blockchains using a combination of built-in integrations and APIs.

You can connect and track your current holdings for free. Getting more details on your earnings and losses requires upgrading to a subscription plan, which costs up to $99 per month. We don’t recommend the crypto tracking subscription to most typical crypto investors.

Tax prep is free for users with less than 25 transactions. Premium tiers cost $99 to $599 (currently offered with a discount) for added support and tax summaries by wallet.

Best Tax Software For Side Hustlers

We like to separate side hustlers from other small business owners because there’s a difference in how full-time business owners handle taxes from side hustlers. We define side hustlers as people working in the gig economy or who earn a part-time income from small businesses outside of a full-time job.

The interesting thing about side hustlers is that they often use different expense tracking apps (like Everlance) and may be eligible to file a Schedule C-EZ tax form instead of a full Schedule C.

Winner: Cash App Taxes

Don’t Forget About Bookkeeping Apps If You Own A Business

No discussion about tax filing is complete without discussing bookkeeping apps. Filing a Schedule C for your business is easy if you keep good records. Our team uses two apps for side hustle income and expense tracking: Tiller Money (for expense tracking) and Everlance (for mileage tracking). These apps are highly recommended if you don’t use a full bookkeeping suite like Quickbooks, Xero, or Freshbooks.

Last year, we reviewed Keeper Tax for the first time. The text-message-based interface is perfect for people who hate bookkeeping. The $11 monthly subscription includes access to a bookkeeper who manually reviews your expenses. And at tax time, you can pay $39 for a summarized expense report.

Best Tax Software For Small Business Owners

Beyond just entering income and expenses, small business owners need to consider business structure, asset depreciation, individual retirement plans, and more.

While many small business owners would likely benefit from an accountant, those wanting to DIY need to have software that is up for the challenge. 

Winner: TaxSlayer Self-Employed

TaxSlayer offers premium tax filing software at a much lower price point than H&R Block and TurboTax. Small business owners who need to categorize unique expenses can get on the phone with a self-employment expert.

TaxSlayer is about two-thirds the price of our runner-up and offers more valuable perks. It doesn't, however, automatically generate W-2 or 1099-NEC forms for employees. Small business owners who need these forms may need to consider TurboTax instead.

Runner-Up: TurboTax Premium

TurboTax Premium boasts an easy-to-use interface and many supported connections for imports. It also allows self-employed people to figure out the maximum contribution they can make to a solo 401(k) or Roth IRA.

As it’s owned by the same company as Quickbooks, it’s easy to bring your information over from the leading bookkeeping app to the leading tax app.

Best Support From Tax Pros

Tax filing time can be a challenge, especially for filers facing new tax situations. Trying to figure out what you can legally deduct is important, but tax filers can end up overpaying to have pros file their taxes for them.

We’re recommending companies that offer “ask a tax pro” options for their online filers (sometimes called live assist). These companies allow filers to set appointments to get their personalized tax questions answered.

Winner: FreeTaxUSA Pro Support

FreeTaxUSA’s Pro Support tier costs $39.99. It involves unlimited phone, live chat, or screen share support with a tax expert. If you’ve got questions, these experts can give you an answer. For this level of service, FreeTaxUSA’s pricing and support options are tough to beat.

Runner-Up: TaxSlayer Premium

Best Virtual Tax Preparation

Virtual tax prep was rolled out a few years ago by a few of the leading tax software companies. But the service has become increasingly popular since the pandemic began. Here are our two favorite virtual tax prep service providers for 2024.

Winner: H&R Block Virtual

Upload your tax documents to H&R Block through a secure online portal, and a CPA or Enrolled Agent will handle the filing from there. The software will even provide an estimated time until completion when you select your tax professional. You may need to answer a few questions via phone or email, but the process is simple compared with filing yourself.

If you want in-person tax prep, you can also use H&R Block in-person or drop-off services (where instead of uploading your documents, you can just drop them off at a local office). Readers of The College Investor can also get $25 off in-person tax preparation with this coupon >>

Runner-Up: Turbo Tax Full Service

The TurboTax Full Service option gives users the ability to upload tax documents and have a tax expert handle filling in tax forms from there. If you prefer not to file your own taxes but want to stick with the TurboTax brand, consider TurboTax’s Full Service option.

Who Should Use Tax Software (And Who Shouldn't)?

Every American that earned income needs to file a tax return. Even if you had taxes withheld from your paycheck, you still should file a tax return - you never know, you may be owed a tax refund. Filing a tax return is basically "settling up" with the IRS. You should what you earned, calculate how much in taxes you should have paid - and if you overpaid, you get a refund. If you underpaid, you owe.

A lot of people wonder why taxes are so "hard". They're not hard - you just have to know where to report certain things. You have to report all your income - wages, interest from a savings account, investment gains, rental property, cryptocurrency, and more. Depending on your income sources, it could be very easy, or very complicated.

If you just work a job and get a W2, your tax return is very simple.

If you run multiple side gigs, have investments, and own real estate, your tax return can be very complicated.

In general, filing your taxes is just data entry. But you have to know where to enter the data. That's where tax software comes into play. If you have all your tax forms, and you can read questions and follow directions, using tax software makes filing your taxes very easy. You'll get questions that say "Enter Box 1 from your W2", and you enter it. 

If you notice our list above, we break down tax software options into what types of income you have - because the guidance, support, and price you pay is all based on that. For basic returns, you can file your taxes for free with several options.

For more complicated returns, you can still do it yourself, but you can get support if needed.

Who Shouldn't Use Tax Software

Tax software requires you to be organized with your tax forms and information, requires you to read and type, and requires some basic knowledge of personal finances.

If you have a complicated tax situation (maybe a business, real estate, and investments), don't have a great organizational system, or can't read or write, you should hire a tax preparer. There are free tax preparation options for those with low income or disabilities, but business owners and investors are likely going to want to have a CPA or EA prepare their returns. 

The more complicated your tax situation, the more time (and cost) you'll face.

Why Should You Trust Us?

The College Investor team spent years reviewing all of the top tax filing options, and our team has personal experience with the majority of tax software tools. I personally have been the lead tax software reviewer since 2022, and have compared most of the major companies on the marketplace.

Our editor-in-chief Robert Farrington has been trying and testing tax software tools since 2011, and has tested and tried almost every tax filing product. Furthermore, our team has created reviews and video walk-throughs of all of the major tax preparation companies which you can find on our YouTube channel.

We’re tax DIYers and want a good deal, just like you. We work hard to offer informed and honest opinions on every product we test.

How Were These Products Tested?

We went through completed a real-life tax return that included W2 income, self-employment income, rental property income, and investment income. We tried to enter every piece of data and use every feature available. We then compared the result to all the other products we've tested, as well as a tax return prepared by a tax professional. You can see these tests each year on our review YouTube videos.

Final Thoughts

There is no shortage of tax filing options for you to consider. Depending on your situation, you may need a premium tool with advanced features, or you may do fine with a free tax software app. 

With any of these tax preparation tools, you can zero in on what needs are most important to you and confidently move forward with your 2024 tax return.

Also note - prices and deals change all the time during tax season. We try our best to keep up with the changes, but sometimes we don’t catch everything. So, if you see any changes in pricing for any of the apps, please let us know in the comments below.

The IRS Direct File program is a new option from the IRS to file your taxes.

In the United States, you can hire a tax professional to file your taxes, or you can use tax software to help you file online. You can also choose to do your taxes by hand. That involves using paper forms or digital equivalents to complete your taxes.

But starting in 2024, you can also use a free digital tax filing service that is offered directly by the IRS. The service is designed to expand free tax filing to more people.

Here’s what you need to know about the IRS’s free Direct File program.

IRS Direct File Explained

The IRS Direct File program is one option for filing your taxes in 2024. The program is a pilot designed to allow some taxpayers to digitally complete their tax return and file their Federal taxes using a program created and managed by the IRS. The tool works on a computer, a tablet, or a phone. That means you can complete your taxes while riding the bus just as easily as in your home office.

Right now, this tool can only file your federal return. It will not file your state return. 

Who Can Use the IRS Direct File Program?

IRS Direct File isn’t designed for everyone. This year, you can only use the IRS Direct File Program if you live in one of the twelve pilot states:

• Arizona
• California
• Florida
• Massachusetts
• Nevada
• New Hampshire
• New York
• South Dakota
• Tennessee
• Texas
• Washington state
• Wyoming

If you live in one of the states above, you also need to meet certain criteria related to your tax situation. The criteria include:

Qualifying income types. The program supports only the most common income types. For the current tax season, Direct File supports W-2 income, unemployment income, Social Security income, Railroad Retirement Income, and interest income of less than $1,500. 

If you’re self-employed, a stock market or crypto investor (or trader), a landlord, or even a side hustler (like an Uber driver), you can’t use Direct File. The software doesn’t currently support self-employment income, rental income, or income from trading or dividends.

Supports three credits. Direct File supports the Earned Income Tax Credit (EITC), the child tax credit, and tax credits for other dependents.

You can’t use Direct File if you want to claim educational tax credits, the saver’s credit (for low-income retirement savings), or if you’re eligible to claim a tax credit related to Dependent Care. The American Opportunity Tax Credit is a key educational tax break for college students and their parents. The new Direct File doesn’t allow you to claim this credit (or other related tax credits).

Not many deductions are supported. The program allows you to claim student loan interest and educator expense deductions. Other than those two deductions, you’ll have to take the standard deduction. Most people don’t need to itemize their deductions, so that won’t be a huge problem. However, we were surprised to see that Direct File doesn’t support retirement plan deductions or deductions for contributions to Health Savings Accounts. These above-the-line deductions are common among people with W-2 jobs, and it seems like an oversight to support the student loan interest deduction but not these other common deductions.

When you layer these requirements onto each other, there are likely very few taxpayers who can use the Direct File service this year. 

IRS Direct File Limitations

When you’re using a product from the IRS, you may expect some side benefits. Unfortunately, Direct File is just a program to help you file your Federal taxes, so you can’t expect special benefits from using the tool. These are a few common concerns that aren’t addressed by the IRS Direct File Program.

Only supports Federal taxes. The Direct File program only helps you file your Federal income tax. If you need to file state income taxes, you’ll need to use a different program.

People who live in Arizona, California, Massachusetts, or New York can use Direct File and will be directed to a state-supported tool. It’s not clear whether information from Direct File will be uploaded to the state-supported tool.

Washington state doesn’t have an income tax, but it offers a tax credit based on income. If you use Direct File, and you live in Washington, you’ll be directed to a site where you can apply for the credit.

Not direct line to IRS representatives. Direct File users will be able to live chat with IRS customer service representatives, but these representatives don’t offer full-service customer support. They will provide technical support associated with the Direct File technology. Additionally, they will be able to answer basic questions related to the scope of the Direct File program.

Doesn’t guarantee a faster refund. Online filers tend to get their tax refund before paper filers, but using Direct File doesn’t guarantee a faster refund. Expect to wait around three weeks after filing before you see your refund hit your bank account.

You can still be audited. Direct File simplifies tax filing, but you may still be audited by the IRS. If you misfile your information, you may need to use tax software or services to help you avoid tax penalties and other problems.

Alternatives to IRS Direct File

Instead of using IRS Direct File, you may want to use tax software. The software we review has been refined over many years. 

FreeTaxUSA works with almost all tax situations and has free federal returns and state returns are just $14.99 each. You can add on access to a tax professional and audit assistance for an additional cost. 

TurboTax has a version for simple returns that is free to file a federal return and one state return. This is for simple returns only and not everyone will qualify. 

Check out the best free tax software. 

Final Take on IRS Direct File

It’s great to see the IRS moving towards a robust free tax filing service. Filing taxes should be simple, and the IRS should provide a robust, free solution for filing taxes. But at this time, IRS Direct File is unlikely to be a good solution for most taxpayers.

The solution is so limited that most people will be excluded because they want to claim additional income or deductions. Even if you can use the IRS Direct File, this is not the year to test it out. You’ll need to use two programs to complete your Federal and State taxes. Plus, you may miss a deduction or a credit because of the software limitations.

For the 2023 tax filing season, skip IRS Direct File. Use a free tax filing program that will allow you to file state and Federal taxes quickly and easily.

Starting on January 1, 2024, existing companies will have one year to file a Beneficial Ownership Information (BOI) report, which will provide detailed information to the United States Financial Crimes Enforcement Network.

The Corporate Transparency Act, passed in 2021, is a law that makes it harder for criminals to launder money in the United States. While the law was passed over two years ago, 2024 is the year in which companies need to start complying with the law. 

If you own a small business, including a partnership or an LLC, you will need to file a BOI report in 2024. Here’s what you need to know. 

What Is Beneficial Ownership Information Reporting (BOI)?

Starting on January 1st, 2024 all corporations, partnerships, Limited Liability Companies (LLCs), and foreign-owned companies doing business in the United States are required to file Benefit Ownership Information (BOI) reports to the United States Financial Crimes Enforcement Network (FinCEN).

Existing companies have until January 1st, 2025 to complete the reporting requirement. Companies that form in 2024 will have 90 days to complete the filing requirement. Those that form on or after January 1, 2025, will only have 30 days to complete the report.

At a high level, the beneficial ownership report will provide FinCEN with information about the people who own or control a company. The idea is that this information will make it harder for illicit actors to use shell corporations or other financial and business structures to launder money.

What Information Must I Provide In The Beneficial Ownership Information Report?

BOI reports will include two parts. The first involves information about the Reporting Company which is the business structure. The report will include the following:

• Company full legal name
• Trade Names (including DBA names)
• Current United States Address (or the primary location where the company conducts business)
• Jurisdiction of formation (The State, Tribe, or foreign location where the business was formed). Foreign businesses also have to provide the State or Tribal jurisdiction of first registration
• A Taxpayer Identification Number (TIN) or Employer Identification Number (EIN)

The second part includes information about “beneficial owners” and controllers of the company. This part of the report will include the following information about all owners and controllers:

• Full legal name
• Date of birth
• Complete current address
• Social Security Number (or a foreign equivalent)
• Image of a U.S. Passport, State driver’s license, ID issued by a U.S. state or local government or tribe, or a foreign passport.

Alternatively, a person or reporting company can request a FinCEN identifier. A FinCEN identifier is a unique ID that can be used to complete a BOI report. This identifier may be useful for individuals who are beneficial owners of many corporations.

Does My Company Need To File A Beneficial Ownership Report?

The Beneficial Ownership Reporting requirement doesn’t apply to all companies. It only applies to foreign and domestic companies that were by filing a document with a secretary of state or any similar office or Indian tribe.

Since sole proprietors don’t file a form when they get set up, they don’t need to file this report. This is good news for casual side hustlers who haven’t set up an LLC or a corporate structure. Additionally, trusts and foundations that haven’t registered with their states will not need to complete this report. The full list of exemptions is available on the FinCEN website.

Aside from these limited exceptions, owners (or controllers) of other companies and corporations need to complete these reports.

Will My Information Be Included In The Beneficial Ownership Information Report?

The BOI Report will include tax and legal information about “beneficial owners” and company controllers. A beneficial owner is anyone who owns at least a quarter of the company. A person with substantial control over a company includes senior officers, members of the board of directors for a company, or other people with substantial influence over the financial and business decisions of a company. This definition is a bit squishy right now, but companies can err on the side of sharing too much information rather than too little.

Who Can Access My Beneficial Ownership Information?

When you file a BOI report the information may be provided to Federal agencies, state, local, tribal, foreign governments, and financial institutions. In general, these entities may only access your information if the information is needed for law enforcement activities. The entities also have to keep your information using appropriate security protocols.

How To File A Beneficial Ownership Information Report

FinCEN hasn’t released a form that allows companies to complete a Beneficial Ownership Information Report. The form is available on the FinCEN BOI website.

Unlike filing taxes, filing a BOI report is supposed to be simple, so most company owners shouldn't worry about spending too much time getting it done.

The form will be available electronically, and most report filers are expected to file the report online. 

Should I Pay Someone To File A Beneficial Ownership Information Report For Me?

Small businesses with only one or two owners probably won’t need to pay a third party to complete a BOI report for them. It is designed to be simple to complete using an online form.

Larger companies and those with more complex ownership structures may want to enlist help from an accountant or lawyer to complete the filing for the company. Note: some accountants may be unwilling to submit a BOI Report due to the nature of the reporting and their own insurance coverge.

Final Thoughts On Beneficial Ownership Information Reporting

While the BOI report adds another hoop to jump through for small business owners, most small business owners should be able to complete the report without too much difficulty. Ideally, completing this report will help FinCEN make the United States safer and fairer for all businesses.

TaxSlayer has emerged as a strong platform in the DIY tax prep space. In fact, we named it one of the best tax software programs on the market, since its most inexpensive version supports all tax forms. That’s huge for side hustlers and business owners who have multiple forms and complex returns.

However, it may not be the best tax software option for you. In that case, you may be looking for TaxSlayer alternatives.

We break down our picks for the best TaxSlayer alternatives that you can use to prepare your taxes this year.

Comparing TaxSlayer With Other Tax Software Products

*Listed pricing is for personal and self-employed taxes filed online only. Other types of small business and/or in-person filing will be subject to different fees.

What Is TaxSlayer?

In our recent review of TaxSlayer, we outlined a number of benefits to using it for your tax return software, including free filing if you are claiming student interest as a deduction. Here’s a quick review of TaxSlayer’s highlights:

• Pricing: $0 (state included), $22.95, $42.95, and $52.95. For the three paid federal return options, you can also file a state return for $39.95.
• Options for tax audit, live tax pro help, and self-employed
• Online filing available
• Easy to use

TaxSlayer Alternatives

Most people will find that TaxSlayer meets their needs. Those with more complex tax filings may find they need more options than what is offered by TaxSlayer. In those cases, specialized tax software that can accommodate the unique needs of those filers will probably be the best option. Here are a few choices.

TurboTax

TurboTax offers a large variety of options but is on the more expensive side compared with other tax filing software. Like most tax filing software, it has multiple plans that increase in price as your tax needs increase or become more complex. Each higher-cost plan includes everything in the lower-cost plans. Except for the free edition, state filing will cost extra. You don’t have to pay for any plan until you file.

TurboTax's versions have the following price ranges for federal returns:

• DIY: $0 to $89
• Live Assisted: $0 to $169
• Live Full Service: $89 to $389

In addition to those fees for filing federal returns, TurboTax charges $39 to $49 for each state tax return that you file. If you file a free federal return with TurboTax, however, you’re entitled to file a free state return as well.

If you use TurboTax’s DIY version, you’ll answer a series of questions as you complete TurboTax’s guided online filing process. But the DIY version doesn’t provide access to live tax experts, which is a feature available with the Live Assisted version.

Those who don’t have time to file their own returns can use TurboTax’s Live Full Service version. With Live Full Service, you share your tax forms with TurboTax, and one of its tax experts files on your behalf.

Get started with TurboTax here >>

TaxAct

TaxAct handles filings for anyone from individuals to businesses to those looking to maximize their deductions. There are four plans offered. Each higher-cost plan includes everything in the lower-cost plans:

• Free: This is suitable for those with simple tax situations, like salaried employees. It also supports claims for two common tax credits: Child Tax Credits and Earned Income Credits.
• Deluxe: This version costs $24.99 and allows you to itemize your deductions, claim credits for child and dependent care, and report contributions to a Health Savings Account (HSA), among other additional features.
• Premier: For $34.99, you can report income from rental properties, capital gains and losses from stock and other asset sales, foreign-earned income, etc.
• Self-Employed: Freelancers, small business owners, and farmers can pay $64.99 to properly report their income, calculate asset depreciation, and access year-round tax planning resources.

The pricing above reflects fees for federal returns only. TaxAct charges $39.99 to $44.99 for state returns, even if you file your federal return for free.

Free account and technical support are included with each TaxAct plan. Those who want access to live tax experts and personalized tax advice, however, must pay an additional fee of $59.99, no matter which base version you paid for. TaxSlayer, on the other hand, offers built-in tax advice as part of both its Premium and Self-Employed versions at no additional charge.

Get started with TaxAct here >>

H&R Block

Sticking to the current theme, H&R Block also offers four plans for its online filing platform with one being free. H&R Block’s platform has a great-looking interface and is easy to use.

The four versions are as follows:

• Free: This version supports basic tax situations. Both state and federal returns are free
• Deluxe: For $35, you can report freelance income and HSA contributions, access live phone and chat support, and store six years of tax documents.
• Premium: For $65, you can report investment income with a Schedule D, claim rental income and deductions with a Schedule E, and report cryptocurrency sales.
• Self-Employed: For $85, you can claim small business expenses and report asset depreciation.

For H&R Block’s paid versions, state returns cost $37 each in addition to the fees for federal returns listed above.

TaxSlayer again has much better pricing than H&R Block Online, but H&R Block has some of the most robust assistance options of any tax software platform. Between online assistance, phone support, and its network of offices, if you need help with your taxes, you can find it easily. 

Get started with H&R Block here >>

FreeTaxUSA

FreeTaxUSA is a popular alternative because it offers affordable pricing for its software. And it's about on-par with TaxSlayer for ease of use. The platform is free to file a federal return and costs $14.99 per state return. 

With these low prices, FreeTaxUSA is much more affordable than TaxSlayer for those who are comfortable using online tax prep platforms independently and don’t need additional tax or technical advice.

But although its base price structure is very attractive, FreeTaxUSA does charge fees for other features. Customers need to pay $7.99 for live chat support; $39.99 for personalized tax advice; and $19.99 for audit assistance and defense. If you need all of those services, you’ll save more money by going with TaxSlayer’s Premium version, which includes them within its base $42.95 rate.

Get started with FreeTaxUSA here >>

Cash App Taxes

Cash App Taxes is a popular alternative to TaxSlayer specifically because its the only tax software option that offers truly free Federal and State tax filing.

However, Cash App Taxes does have some drawbacks. For example, it doesn't allow for multiple state taxes, and doesn't support foreign earned income. There may be other tax situations that it doesn't support as well.

As a result, TaxSlayer is still a competitive option. But if you have a simple tax return (like a W2 and maybe a 1099 for interest), Cash App Taxes could be a good choice.

Get started with Cash App Taxes here >>

Final Thoughts

If your filing needs are simple — for example, you’re a salaried employee and have no investments — there are plenty of free tax filing platforms that allow you to file both federal and state tax returns at no cost. In that circumstance, you might as well go with a respected and seasoned company, like H&R Block.

For more complex tax situations, like itemizing deductions or reporting freelance and investment income, there are some low-cost or even free options out there. But these platforms may not provide adequate technical support or tax advice.

TaxSlayer is a good middleground option. It offers lots of tax insight and technical help at an affordable price point.

An after-tax 401k is a special type of 401k contribution that allows you to add additional "after-tax" money into your 401k account.

Most long-term investors realize there aren’t too many “quick and easy” tricks to getting better investing results, but a few tried and true methods can boost performance. 

The most important one is to pursue a diverse portfolio. You also want to minimize taxes on the income your investments earn. Many investors use retirement accounts, including their 401(k)'s, as a tax shelter.

But are you taking full advantage of your retirement accounts? If you’re not making after-tax 401(k) contributions, you could be missing tax-savings opportunities. That's because after-tax 401(k) contributions can dramatically increase the amount of money that you can put into a tax-sheltered retirement account.

Here’s what you need to know about making after-tax contributions to your 401(k).

What Is An After-Tax 401(k) Contribution?

An after-tax 401(k) contribution is money that you put into a 401(k) that does not have an immediate tax benefit. You must pay income tax on your money before you contribute it to your 401(k). After you pay the tax, you can put this money into your 401(k). Earnings on after-tax contributions to a 401(k) grow tax-deferred. That means the earnings on these contributions aren’t taxed until its withdrawn from the plan. When you withdraw the money, you’ll pay tax on the earnings but not on the original contributions.

After-tax 401(k) contributions allow an employee to “fill up” their 401(k) bucket to the annual limit, even if your employee and employer contributions don’t add up to the annual limit.

For example, let's say a 36-year-old person contributes $23,000, the employee maximum, to her 401(k) account in 2024. If her employer contributes $10,000 to the account, her total contributions for the year are $33,000. That’s a lot of money to contribute to a retirement account, but it is well short of the $69,000 total limit for 401(k) contributions. If she has sufficient income, she can add up to $36,000 of after-tax contributions to her 401(k) for the year.

While many 401(k) plans allow you to make after-tax contributions, not all of them do. You will need to visit your 401(k) plan’s website (or review the documents from HR) to figure out if you can “super-fund” your 401(k) with after-tax contributions.

How To Make After-Tax Contributions

If you’re a W-2 employee without side-hustle income, you can only make an after-tax contribution if your employer’s 401(k) plan allows it. Unfortunately, not all employers do. You’ll need to consult your 401(k) plan documents to see if after-tax contributions are allowed. In most cases, if after-tax contributions are allowed, you can make them by adjusting your contributions on your plan’s website.

Self-employed people can only “super-fund” their 401(k) when their individual 401(k) plan allows them to do so. You’ll need to carefully read your 401(k) documents (or talk to customer support) to figure out whether after-tax contributions are available, but most of the big-name brokerages don’t allow after-tax contributions in their free solo 401(k) plans. My Solo 401(k) is one company that does allow voluntary after-tax contributions.

What To Do With After-Tax Contributions

Once you have after-tax money in your 401(k) account, there are a few strategies you can employ to super-charge the tax advantages associated with after-tax contributions.

The first strategy is called the “Mega Backdoor Roth”. The mega backdoor Roth involves converting all of your after-tax contributions to Roth contributions. When you do this, all the contributions AND all the earnings on your contributions receive the “Roth” treatment. That means that you never have to pay income tax on the contributions or the earnings ever again.

The easiest way to fund a Mega Backdoor Roth is to use automatic in-plan Roth conversions. This feature, offered by some employers, allows your plan provider to automatically convert your after-tax contributions to Roth contributions on a regular schedule. Some providers may even convert the contributions every other week when you automatically fund your 401(k). Combining financial automation and permanent tax advantages is the best option when it comes to after-tax contributions.

If your employer’s plan doesn’t allow automatic Roth conversions, you may be able to convert those contributions on your own. Consider making the conversions every quarter, so that your withdrawals are simple.

If your employer doesn’t offer in-plan conversions, you can rollover money from your 401(k) to traditional and Roth IRAs. This is called a Mega Backdoor Roth IRA conversion, and it is clunkier than an in-plan conversion. However, it is likely worth the hassle if you have a lot of income that you want to invest in a tax-advantaged retirement account.

Differences Between Roth and After-Tax 401(k) Contributions

It’s easy to confuse after-tax 401(k) contributions and Roth contributions. After all, Roth contributions are sometimes called after-tax. Additionally, investors pay taxes on their income before they make Roth or after-tax contributions with it. So what is the difference? Unless you do a Roth conversion, the earnings on after-tax contributions are tax-deferred instead of “already taxed.” That means that after-tax contributions grow tax-free, but they will be taxed as regular income when you withdraw the money. By contrast, Roth contributions are already taxed. The IRS will never tax the contributions or the earnings again.

Most investors want their after-tax contributions to become Roth contributions as quickly as possible. That is why many investors want to find ways to do in-plan Roth conversions.

Alternatives to After-Tax Contributions

High-income earners (and super-savers with modest incomes) may not have the ability to make after-tax contributions in their 401(k) plans. Or they may not want the hassle of converting after-tax contributions to Roth contributions. In that case, there are a few excellent alternatives to making after-tax contributions.  

• Invest through a brokerage: Building up investments in an online brokerage account isn’t perfect. You will pay capital gains taxes when you trade in the account. However, the money in a brokerage account is accessible, so you can use it to put an addition on your house, to buy a business, or to help pay for your child’s college education.
• Purchase alternative investments: Instead of investing in the stock market, you could choose to invest in crowdfunded real estate, venture capital, or other alternative investments to diversify your investment portfolio.
• Save cash: Holding a cash cushion for an emergency fund or to fund a short-term goal can be a good option. Cash won’t beat inflation in the long run, so you don’t want to hold too much cash. That said, a healthy emergency fund can be very comforting during a turbulent economy. 

When To Make After-Tax 401(k) Contributions

Making after-tax contributions into a 401(k) isn’t the right decision for everyone. However, if you’re a high-income earner, after-tax contributions could help you save money on taxes. Before you dig into the details, consider the appropriate order of operations for retirement investing. You’ll want to max out all of your other accounts before you super-fund your 401(k). But if you’re maxing out all of your retirement accounts, you may decide that after-tax contributions are the best way to build wealth for you.