LibertyTax

"Start for free." Lots of online tax-prep services begin this way, and it can be true. Most of them make their money by charging you later for your state return. I do not begrudge them that. They are a business, after all, and their purpose is to earn money. I support capitalism.

Here's what they tried to do with me. I am a U.S. retiree who lives in Mexico, so I do not have a state return, just federal, and the last few years I have filed for free successfully with another online service. I decided to try Liberty due to some minor unhappiness with the other site.

My tax situation is simple. My income comes from Social Security, a corporate pension and, now and then, withdrawals from an IRA. I do not itemize. I take the standard deduction. None of the other elements of the IRS maze apply to me. My return is very simple and straight-forward. Three sources of income, and that's it. No house stuff, nada, zip, zed.

Here's what Liberty did. Suppress your laughter. They have four packages:

1. The E-Z, "best for simple returns."
2. The Basic, "best for families." $19.95.
3. The Deluxe, "best for investors." $39.95.
4. The Premium, "best for small business owners." $69.95.

I opted for the Basic because I use the 1040, not the 1040EZ, and I was willing to shill out 19.95.

I started filling in the info. It didn't take long till I got to the income section, and on mentioning my pensions and their accompanying Form 1099-Rs, which is a simple form that states how much I received, how much was withheld, if any, Liberty immediately told me that neither Package 1, nor 2, nor 3 would cut the mustard in my simple situation. Only the highest-price package would do, the one for small business owners. It leaped right over option 3 to the priciest level.

Thinking this was an error, I went to chat, asked why it was doing that, stated the obvious, that it made no sense whatsoever. I was not a small business owner. No matter. That was what I would have to pay if I wanted to continue, the chat gal told me.

Obviously, I did not. I used another service, and filed my simple return for free. I recommend you steer clear of Liberty.