free tax return

Free Tax Return from Credit Karma

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Have you done your taxes yet? If not, I found a website where you can file a free tax return for both federal and state. I even did my small business return completely free! I’m not getting any money for this post, by the way. I just wanted to share a free, money-saving tip! Because who doesn’t love ways to save money?

How I used to get a free tax return

In a former life, I was a certified tax professional with H&R Block. It started out as a side job, but then when the business I was working for folded, it became my full-time gig for awhile.

I enjoyed preparing taxes. I even did it after I left for friends and family. Then the laws changed and the government started wanting money to call yourself a tax preparer. So I gave that up and continued to just do our own taxes.

If you have a pretty basic return, you can file your federal return for free through H&R Block. They want $40 for your state return, so I always used the California tax website (Franchise Tax Board) to file our state return for free.

This year, though, I needed to include a Schedule C form for my small business. H&R Block wanted to charge me, so I went to look for another alternative. I didn’t want to do paper forms, because it takes longer to file and a refund.

Credit Karma’s free tax return

Credit Karma has a completely free site. Funding comes from allowing finance-related businesses, such as credit card companies, to give offers to visitors of the site. It’s free to sign up, and that gives you immediate access to your free credit report! They also give you credit scores from TransUnion and Equifax. These are also free and updated weekly.

It is a requirement to sign up for an account that gets the credit report/scores in order to get your free tax return. But I see this is a benefit rather than a drawback.

Unlike other “free” tax return websites, you don’t get multiple nudges during your return to upgrade to a paid return when you use Credit Karma. Credit Karma states on their website that they will always be free, thanks to the money from their advertisers.

I did my whole tax return (federal and state) and filed it online completely free. Within a few minutes I received confirmation that both my tax returns were received and accepted. Not only that but less than 2 weeks later I already received my state refund, and the federal refund should be in my account by tomorrow.

What about privacy and security?

If you’ve never filed a tax return online before, I’m sure it may be scary to think of sending your personal information into the ether. Credit Karma uses secure servers, 128-bit encryption, firewalls and more. The company was founded ten years ago and has over 60 million members.

Their website also has finance articles, reviews of credit cards, and financial tools.

Tips about taxes

Here’s my disclaimer: I am not (any longer) a tax professional. Always check with your own financial experts. Also, this information is U.S.-based; I do not have any knowledge of how taxes work in other countries. However, here is some basic info that I often hear people confused about.


  • A tax return is the paperwork you file and send to the IRS/state tax authorities.
  • At the end of the year (actually beginning of the next year), your employer gives you a W-2, which is the income and tax information needed to file your return.
  • When you start working for a company, you fill out a W-4 and let them know your withholding preferences.
  • A contracted employee may receive a 1099 instead of a W-2.
  • If you are self-employed with a small business, you likely need to file a Schedule C to report your income and expenses.
  • If you get money back from the IRS or the state, that is a tax refund. A refund indicates too much money was withheld from your paychecks throughout the year, and you get it back.

Application of the terms

  • When choosing withholding the choices are 0, 1, 2, 3, etc. Each number translates to the amount of taxes withheld from each paycheck. 0 is the highest amount withheld. The larger the number, the less money comes out in taxes.
  • Most employers and financial institutions issue W-2s and 1099s in January. However, they have several months to do it. If you are almost at the due date for filing a tax return and still have not received tax documents, I recommend filing with what you do have, and estimate the rest. Then when you get the documents, do an amended return. Filing your return late because you did not receive documents may result in a penalty if you owe taxes.
  • If you do not receive a 1099, that does not mean you do not have a tax responsibility for that income. As a contractor it is your responsibility to keep track of your income, report it on a tax return, and pay taxes if necessary.
  • If you owe money, your withholding was too low during the year. If it’s enough money, you may also owe penalties and/or interest.
  • In the tax world, the ideal amount to get back or owe is zero. Think about it: if you get a lot of money back, that means the tax agency has had access to that money, your money, during the year. That is money you could use to pay off debt, put into savings to earn interest, invest, add to your retirement account, or just buy groceries. Of course, owing money is not fun either, especially when you have to pay penalties. But if you try to get as close to zero as possible, that is best.
  • If you get back or owe hundreds or even thousands of dollars every year, you might want to consider changing your withholding. Too much money refunded means changing to a larger number. If you owe too much, change to a smaller number. The IRS or your local tax person can help you determine the best withholding for you.

How did my taxes go?

Well…I got way too much money back. This sort of happened intentionally for a few reasons:

  • Last year, I made significantly more money than I’d ever made before.
  • I also started a business. In anticipation of making a profit, I withheld more from my paychecks to help offset any tax responsibility I might have from the business.
  • I did not earn any income from the business last year, and also had expenses to deduct from it.
  • Therefore, I ended up with a large refund.

When I saw this happening, I changed my withholding with my employer and of course saw an immediate increase in my income. If/when I start making money through the business, I can always change my withholding again, or pay quarterly estimated taxes.

Also I now have a bunch of money to immediately put toward paying off my student loans!

Anyway, if you want to check out Credit Karma and use their free tax return option, their website is

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free tax return

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