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How Does Credit Karma Tax Work

By David Krug 5 minute read

Want to avoid having to pay a fee to complete your taxes? Credit Karma Tax lets you do just that, and it’s completely free to use. What tax preparation software should I use if I’m going to do my taxes on my own this year and plan to file them online? Considering that there are several options for preparing taxes online, how can one service be considered superior to others?

Users of Credit Karma Tax never pay to submit their federal or state taxes with our free tax preparation service. There are some forms and scenarios that aren’t available for free on rival providers that you can’t get with this service. It is our hope that our Credit Karma Tax review will address all of your concerns and help you make an informed decision about whether or not Credit Karma Tax is a good fit for your financial situation.

About Credit Karma Tax

More than 100 million customers have previously used Credit Karma’s personal financial service, Credit Karma Tax, to do their taxes online. In addition to free e-filing and federal and state tax preparation, Credit Karma Tax does not have any income limits or upsells.

In time for the 2017 tax season, the San Francisco-based startup released its free customized tax preparation software for the first time in December 2016. Credit Karma purchased AFJC Corporation, an online tax preparer, and filer, in the same year to join the tax preparation sector. More than one and a half million people in the United States signed up for the queue before it went live.

Credit Karma offers more than just tax preparation and e-filing services; it also offers a variety of tools and information to help you better manage your finances. There is also a high-yield online savings account that earns interest, a tool to identify unclaimed money, and reviews of credit cards and personal loans included.

As a first-time user of Credit Karma, you may question how the service remains completely free. Credit Karma uses information from your profile and account to make customized recommendations for financial items like credit cards and loans. In most cases, Credit Karma earns money from the partner if you accept one of these offers. If you don’t have a credit card, you can still use Credit Karma for free.

Currently, Credit Karma Tax is accessible in all 50 states, as well as Washington, D.C. For a comprehensive list of states, see here.

Exactly how much does Credit Karma Tax cost?

Using Credit Karma Tax to complete your tax return is completely free. No hidden costs or income and tax bracket limits, although the supported forms and scenarios are restricted like other free tax preparation software. To put it another way, Credit Karma Tax may not have all the tax forms you need depending on the intricacy of your circumstance.

The tax forms and scenarios that Credit Karma Tax covers set it apart from other free tax preparation and filing services. When it comes to tax forms, Credit Karma endorses “the most prevalent.” Individuals who own a small business must file IRS forms to disclose their income or loss, as well as joint returns. TurboTax Free Edition, meanwhile, is only accessible to those who plan to claim the standard deduction on their tax return. Itemized deductions and income from a business are not included. As of right now, Credit Karma Tax does not handle the following scenarios:

  • Multiple state filings
  • Part-year state filing
  • Foreign earned income
  • State returns for married filing separately in community property states*
  • State filing without a federal filing

Credit Karma Tax: How Does It Work? Four distinguishing characteristics

You may use Credit Karma Tax if you have a Credit Karma account. If you are looking for a clever and straightforward tax filing solution, this is the one for you! Some of its most important aspects are as follows:

A simplified onboarding process ensures an intuitive experience

When you begin your return with Credit Karma Tax, you’ll be asked a series of detailed questions that will map to the appropriate tax forms. Each response is utilized to create a customized dashboard that will assist you in filing your taxes effectively, and you will only complete the forms necessary for your specific case.

Free audit protection

You may obtain a complimentary audit defense, which will handle all contact with the IRS and will give in-person representation if you are audited.

24/7 chat support

Many people are put off by the difficulty of filing their own taxes because of this. Credit Karma Tax is introducing new 24-hour chat help for its users in time for the 2020 tax filing season. It’s easy to get answers to any questions you may have during the filing procedure.

Mobile filing

Taxpayers who utilized Credit Karma Tax last year can begin their tax preparation on their mobile devices. This is how more than half of the Credit Karma Tax filers began their tax return. For the first time, taxpayers will be able to complete their whole tax return on their smartphone this year, regardless of how complicated their tax situation may be.

Pros and Cons


If you’re seeking a hassle-free way to file your taxes, try using Credit Karma Tax. Because there are no paid upgrades, those who are self-employed or who wish to itemize their deductions won’t run into any kind of pay barrier. Tax forms including Schedule A, Schedule C, claiming the child tax credit and claiming the earned income credit are all supported by Credit Karma Tax, which is completely free from start to end.

Taxes are notoriously difficult to understand, not to mention the fact that your hard-earned money is at stake. Credit Karma Tax makes filing your taxes a breeze thanks to its intuitive interface. In addition, Credit Karma Tax guarantees the accuracy of its estimates to the fullest extent of the law. Because of an error in Credit Karma Tax’s estimate, you may be entitled to up to $1,000 in compensation from the firm if an IRS or state tax authority charges a penalty.

The “Maximum Refund Guarantee” offered by Credit Karma Tax is another perk for customers. Credit Karma Tax will pay up to $100 if you obtain a larger federal tax refund or owe less in federal taxes when you file an updated return with another online tax prep service.

It’s also simple to switch to Credit Karma Tax if you’ve used other tax preparation software in the past. Importing from H&R Block, TurboTax, and TaxAct is supported.


Even while it offers a wide range of tax forms and scenarios, the usefulness of Credit Karma Tax is limited, as it is with any free tax-filing service. Because of this, it’s possible that Credit Karma Tax won’t be able to assist you in filing your taxes in your particular case. Personalized tax assistance on Credit Karma may also leave you unsatisfied. Credit Karma does not provide the opportunity to consult with tax professionals for a charge, as some of its rivals do.

Customer Service

Because Credit Karma does not offer phone help, the only option to get in touch with them is to send an online request to their member support department. If you have any issues during the filing process, you may reach Credit Karma Tax via chat, which is available around the clock. When you’re signed into Credit Karma Tax, you’ll find a chat option under the “Help” area at the top of your dashboard.