Liberty Tax Online Review – State and Federal Tax Preparation

Liberty Tax Online is backed by a thousands-strong coast-to-coast network of Liberty Tax branches, at least one of which is probably within easy driving distance of your home. If you get stumped at any point during the filing process, you can effortlessly transfer your return to a physical Liberty Tax office — a nice fallback online-only competitors can’t offer.

Liberty Online is a solid tax filing option for tax situations of virtually any complexity. However, it does have a significant disadvantage that’s worth noting: no free filing option. And compared to competitors with similar capabilities and features, Liberty Online is on the pricey side. 

But it’s still worth checking out if you don’t qualify for free tax filing with most tax prep providers, anyway.

Liberty Tax Online Plans and Pricing

Initially, Liberty Tax Online takes an interview-style approach to the tax preparation process. It asks a series of questions, such as “Do you own a home?” and “Do you have any dependents?” It uses your answers to determine which forms and schedules you need and which plan option is appropriate for your tax situation.

Note that Liberty Tax Online’s pricing is subject to change — and generally increases as the filing deadline approaches. If you’re able, it pays to file early, no matter which of its three plans you think you’ll need.

Basic

Liberty Online’s Basic plan charges $24.95 for your federal return and $36.95 for each state tax return. It’s ideal for filers with moderately complex tax situations, including itemized deductions and health savings accounts (HSAs). But it isn’t appropriate for business owners and people with lots of investment income.

The Basic plan isn’t appropriate for those with highly complex tax situations, but it does include some forms and schedules many competitors’ free plans don’t, including:

• Support for Earned Income Tax Credit. If you qualify for the earned income tax credit, you can file Schedule EIC.
• Itemized Deductions. The Basic plan supports Schedule A, which allows you to itemize your deductions.
• Health Savings Accounts. If you have an HSA to supplement a high-deductible health insurance plan, you may qualify for special tax deductions. The Basic plan supports the requisite forms.
• Interest and Ordinary Dividend Income. This plan supports Schedule B, which you need to file if you earned more than $1,500 in interest and ordinary dividend income during the tax year.

Deluxe

The Deluxe plan costs $44.95 for your federal return and $36.95 for each state return. 

Deluxe is appropriate for filers with more complex situations, including self-employed individuals required to file Schedule C. However, it doesn’t work for the most complex tax situations, including income from farming or real estate or entrepreneurs who need to report capital gains or losses from their businesses.

The Deluxe plan comes with all the features and functions of the Basic plan, plus:

• Free Pro Tax Support. Liberty Online offers complimentary Pro Tax support for Deluxe plan customers. You’re entitled to unlimited free professional support with this package.
• Sole Proprietor and Independent Professional Forms and Schedules. If you need to account for issues entrepreneurs and freelancers face, such as self-employment income and depreciation, you can do so with this package. You can also file all the forms necessary to claim business tax deductions and credits related to your activities, such as home office deductions.

Premium

The Premium plan costs $64.95 for your federal return and $36.95 for each state tax return. 

Premium is best for people with complex tax situations, such as those who incurred capital gains or losses from small-business activities or property sales or filers who earn income from farming or rental property.

The Premium plan includes all the features and functions of the lower-tier plans, plus:

• Capital Gains and Losses. If you have capital gains or losses from property sales (including the sale of your home) or sales of securities like stocks and mutual funds, you can file Schedule D and all other applicable forms with this plan.
• Business Income. If you’re a shareholder in a partnership or S-corporation, you can file Schedule K-1 to report your business income with this plan.
• Rental Property Income. If you have income from rental properties, you can file Schedule E and the related forms with this plan.
• Income From Farming. If you earned income from agricultural activities, you can file Schedule F and related forms.

Additional Features of Liberty Tax Online

Liberty Tax Online has several notable features available to all customers, regardless of plan.

Free Chat, Phone, & Email Support

Liberty Online offers free technical support by phone, chat, and email. Phone and chat support are available during regular business hours. It can take up to 24 business hours for someone to answer emailed questions. 

These support venues are appropriate for questions about the Liberty Online platform itself, not for detailed questions about tax matters. For that, upgrade to Deluxe or Premium or walk into a Liberty Tax office.

Prior-Year Return Access & Filing

Liberty Online stores all prior-year returns in its database. They’re accessible anytime at no charge.

And if you failed to file a prior year’s return, you can do so using the appropriate Liberty Tax package at the advertised price. Be aware that you forfeit any refund you otherwise would have gotten after three years, but you’re still legally required to file.

Amended Tax Returns

If you need to change a prior year’s tax return, you can do so for free. You can amend returns prepared by Liberty Tax or any competitor.

W-2 Importing

If your employer is in Liberty Tax’s system, you can import your W-2 directly from them rather than entering the information manually.

Competitor Importing

You can import prior-year tax returns from competing online tax prep services, provided they’re in PDF format. That saves you the time and trouble of entering all your information again.

Maximum Refund & Accuracy Guarantees

Like most online tax prep services, Liberty Online has a maximum refund guarantee. If you file an identical return with a competitor and receive a larger federal refund (or smaller federal tax liability), Liberty Online refunds your tax preparation fees.

Also like most competing online tax prep services, Liberty Online has an accuracy guarantee at all price points. If you’re hit with an IRS penalty or interest charge due to a Liberty Online calculation error, Liberty Online provides full reimbursement.

Tax Estimator

Liberty Online’s handy tax estimator is a complimentary simulated mini-return. You can use it to gauge the size of your refund or tax liability before you file.

Real-Time Refund Display

Liberty Online shows your refund or tax liability in the upper right corner of your screen. The amount changes in real time based on the information you input.

Help Sidebar

Liberty Online’s static right sidebar includes buttons for finding and contacting your nearest Liberty Tax office, accessing frequently asked questions (FAQ), starting a live chat session with a representative, and contacting the support team (including tax pros if your plan allows) by email or phone.

Office Appointments and Double-Check

If you feel stuck at any point during the preparation process, you can schedule an appointment with your nearest Liberty Tax office and complete your return there. It takes just a moment to schedule a time slot online, and there’s no charge to do so.

Liberty Online also offers in-office double-checks, or reviews by trained tax preparers, for no additional fees. 

However, if you complete your return in person, you’re likely to face additional charges at filing time. Liberty Tax’s in-person prep fees range up to $500 or more for very complicated situations.

Audit Support

If the IRS audits you, Liberty Online promises to review any correspondence you receive and advise you on how to respond or proceed. This service is free for anyone who files a Liberty Online return. 

Enhanced Audit Assistance

Enhanced Audit Assistance is an add-on package you can buy to get a more hands-on approach from Liberty Tax professionals during your IRS audit. 

It includes preaudit recommendations about the types of documents the IRS might request from you, assistance responding to IRS communications, and advice about your options once the audit process is complete. 

However, Liberty Online stops short of providing representation during the audit process, and there’s no package you can purchase through Liberty Online to get that level of support.

Refund Transfer Service

You can pay Liberty Tax Online’s tax prep fees out of your federal refund when you opt in to the refund transfer service. Liberty automatically deducts its fees when your refund comes through, then passes on the balance as a paper check, direct deposit, or prepaid Mastercard. There’s an additional processing fee for this service.

Refund Advance Loans

Liberty Tax offers small tax refund advance loans for qualifying filers. Loan principals vary based on borrower qualifications, but they’re lower than some competitors’ loans. And you typically get the funds within 24 hours of your federal return acceptance.

Refund advance loans are useful for early filers who don’t want to wait for their tax refunds, which can take several weeks to arrive. But these loans may carry interest charges and require an underwriting process, so it’s best to inquire with Liberty Tax staff before signing up. 

Plus, Liberty Tax makes clear that this offer is subject to change or cancellation at any time.

Advantages of Liberty Tax Online

Despite being on the pricey side, Liberty Tax Online has a lot going for it, including.

• A Clean, User-Friendly Interface. Liberty Online’s interface isn’t exactly pretty. But the layout is easy to follow. The layout is clear, and you don’t have to click through an excessive number of pages, as is the case with TurboTax.
• Access to Physical Branches. Liberty Online customers enjoy access to thousands of physical Liberty Tax branches. That’s a big help for novice filers who need more guidance and experienced filers who want the peace of mind of a double-check.
• Easy Navigation. It’s easy to go back and forth through your Liberty Online return. You can skip ahead at any time, allowing you to prepare returns over days or weeks as you receive the necessary documents.
• Refund Advance Loans. It usually comes through within 24 hours of return acceptance, making it an excellent payday loan alternative for filers who need fast cash. (That said, there are plenty of reasons to be wary of tax refund advance loans.)

Disadvantages of Liberty Tax Online

Liberty Tax Online has many user-friendly advantages, but it doesn’t come without its drawbacks, including:

• No Free Filing Option. Liberty Online doesn’t have a free filing option. The cheapest plan sets you back about $25, plus an even higher fee for state returns. That’s considerably more than both FreeTaxUSA and TaxAct.
• Super-Short Timeout Fuse. Liberty Online’s timeout fuse is among the shortest of any tax prep software program on the market. Each time I walked away for a short break, it logged me out. Worse, certain account activities, such as maneuvering through help content, don’t count as activity. That means you can be logged out of your account while actively using it.
• Limited Customer Service Hours. Liberty Online’s customer service team is available during regular business hours Eastern time. That’s problematic for the millions of taxpayers who prepare their returns in the evenings and on weekends. TurboTax and H&R Block both have longer live-contact windows.

How Liberty Tax Online Stacks Up

Liberty Tax Online isn’t the only tax prep option on the market. Learn how it stacks up against another competitor that blends DIY online prep with in-person support: H&R Block.

Final Word

Liberty Tax Online is one of several online tax prep programs backed by a network of physical branches staffed by real, live humans. H&R Block, eSmart Tax, and Jackson Hewitt Online also have vast branch networks.

But that’s not the only feature that sets Liberty Tax Online apart from online-only competitors like TurboTax and TaxAct. Liberty Tax Online offers reasonably priced tax prep for people with relatively complex tax situations, including small-business owners and self-employed individuals. That’s rare these days.

For more tax preparation software options, check out our full list of top-rated free online tax preparation services.