Credit Karma Launches Free Tax Filing Program with a Twist
After 10 years of providing free credit scores, Credit Karma is entering a new arena: tax filing. The new Credit Karma Tax offers “truly free tax returns” with no upsells and no hidden fees, just in time for the 2017 tax season.
Credit Karma Tax works like many other e-filing programs. You enter the appropriate information into the prompts, and the website does the calculations. There are no income limits and no fees for specific forms. They provide free services for federal and state tax forms, along with self-employment taxes, tuition statements, and a number of other options. In fact, the list of forms supported by Credit Karma Tax is much larger than the free services available with other e-filers, but there are still some forms not included (multiple state returns, nonresident state returns, etc.).
How does Credit Karma make money from this? The same way they make money from their credit score system. After you have completed your tax forms, Credit Karma will suggest credit cards and loan opportunities suited to your income and lifestyle. For instance, a person filing for self-employment tax may get recommendations for business credit cards. Credit Karma gets money from people signing up for those loans or cards. You do not have to input banking information to pay for the service. The company relies purely on referral revenue to earn money from its tax filing.
Discussion of Credit Karma Tax first came about in December 2016 when the company purchased the tax preparation group AFJC Corporation for an undisclosed amount of money.