What 1040.com does

1040.com is an online consumer tax preparation and e-filing service operated by Drake Software, LLC, a Franklin, North Carolina-based company that has been building tax software since 1977 and is itself owned by Taxwell Company. The service is targeted at individual US taxpayers—including W-2 wage earners, self-employed filers, investors, students, and retirees—and offers a single flat-rate price of $34.99 that covers both federal and state return preparation, e-filing, all forms and schedules (including Schedule C for self-employment), and access to a database of over one million employers for automated W-2 import. The platform is built around guided walkthrough technology that converts complex IRS forms into question-based steps, with mobile-friendly UX and an AI-powered chatbot for customer support. Revenue is collected on a transactional basis at the point of filing only after the user reviews and approves the completed return, with optional add-ons such as E-collect refund-based payment ($29.95) and Protection Plus audit assistance ($34.95) generating incremental income.

The go-to-market motion is product-led and exclusively digital: customers self-serve through file.1040.com and 1040.com with no sales team involvement, and acquisition is driven by organic search, content marketing (knowledge base, refund calculator, prior-year import), and email. The service is backed by IRS-authorized e-file status, TRUSTe privacy certification, and bank-level encryption. Distribution leverages Drake Software's broader professional franchise—its tax professional software is used in 60,000+ tax offices and the combined online and professional products have processed 150+ million returns in the last decade—though the 1040.com consumer brand itself operates on a US-only, single-channel basis with no retail, wholesale, or reseller presence. Pricing is a deliberate differentiator against tiered competitors: state filing, self-employment, and all forms are included at no additional cost, supported by maximum refund, 100% accuracy, and easy-to-use guarantees.

Name

1040.com

Legal name

Drake Software, LLC

Website

https://1040.com

Company type

Private

Founded year

1977

Operating status

Operating

Headcount range

11–50 employees

Short description

1040.com is a US-focused online tax preparation and e-filing service operated by Drake Software, offering federal and state returns for a single flat $34.99 fee, targeting individual consumers including W-2 earners, self-employed filers, and investors.

Ownership category

akta.pro rank

Product category

Tax Preparation Software

NAICS

Tax Preparation Services (541213), Accounting, Tax Preparation, Bookkeeping, and Payroll Services (5412)

SIC

Services-Computer Processing & Data Preparation (7374)

akta.pro primary industry

Revenue Systems, E-Filing & Digital Tax Administration (BPAIADAO)

akta.pro secondary industry

Tax Return Filing, Processing & Assessment (BPAIADAC)

Keywords

• Online tax filing
• Tax preparation software
• Federal state e-file
• Flat-rate tax filing
• Self-employment tax filing

Headquarters

HQ city

Franklin

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2C

Offering type

Software

Cost components

Technology or R&D, Personnel, Operations, Marketing or Sales, Infrastructure

Revenue model

1. Tax Return Preparation and Filing: One-time flat-rate fee of $34.99 for preparation and e-filing of federal and state tax returns. Includes all tax forms, schedules, and filing statuses. Revenue collected at point of filing only after user reviews and approves their completed return.

Pricing tiers

Go-to-market motion1 record

Distribution channels1 record

Marketing channels5 records

Core offering

1040.com is a direct-to-consumer online tax preparation and e-filing service that prepares and electronically files U.S. federal and state tax returns for a single flat fee of $34.99, covering all forms, schedules, and filing statuses regardless of complexity. The service is delivered through a guided walkthrough web application accessible from any device, with optional paid add-ons for refund-based payment and audit assistance.

Product overview

1040.com is a single-product online tax filing platform operated by Drake Software. The core offering is the 1040.com Online Tax Filing Service, which provides federal and state tax return preparation and e-filing at a flat rate of $34.99. The service includes a guided walkthrough interface, W-2 import capability, Schedule C filing for self-employment, tax calculator, and refund status tracking. Optional paid add-ons include E-collect (refund-based payment for $29.95), Audit Assistance through Protection Plus ($34.95), and tax extension filing. The platform is 100% mobile-friendly and includes AI-powered chatbot support. All features are included in the single flat rate with no pricing tiers or upgrade requirements.

Differentiator

Problem solved

Functional benefit

Products and services

• 1040.com Online Tax Filing Service Online federal and state tax preparation and e-filing service for U.S. individual taxpayers at a flat $34.99 fee. Covers W-2 employment, self-employment (Schedule C), investments, rental properties, students, and retirees via a guided walkthrough. Includes W-2 import, federal-to-state auto-fill, prior-year data carry-forward, three-year secure storage, refund tracking, and chat/email support.
• Federal and State Return Filing Electronic preparation and filing of U.S. federal and state tax returns with automatic population of state return data from the federal return. Supports all filing statuses and income types, included in the flat $34.99 rate.
• Tax Calculator / Refund Estimator Free online tool that estimates federal tax liability or refund amount before filing, available without creating an account and used to drive top-of-funnel engagement.
• Tax Extension Filing Service to file Form 4868 federal tax extension by April 15, granting additional time to file a return until October 15. Priced separately from full return preparation.
• E-collect (Refund-Based Payment) Optional add-on payment method that lets customers pay the $34.99 service fee directly from their tax refund for an additional $29.95 fee.
• Audit Assistance (Protection Plus) Optional audit assistance coverage provided by Protection Plus for an additional $34.95, offering expert support if the filer is audited by the IRS or a state authority.

Quantifiable outcome

• 150+ million tax returns processed in last 10 years
• +2 more outcomes

Segments5 records

Ideal customer profiles4 records

Technology focussed Yes

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Integration4 records

AI capability3 records

Feature4 records

Partnerships

Two partnerships are on record, tiered minor.

• Protection PlusminorOthersProvides optional audit assistance add-on product to 1040.com customers. Offered as purely optional service at checkout for $34.95 additional cost. 1040.com recommends the product but notes it is completely optional.
• E-collectminorOthersAlternative payment method allowing customers to pay for tax preparation using their refund. Available at checkout for $29.95 additional cost. Completely optional payment option.

Scale indicators4 records

Recent moves6 records

Expansion highlights5 records

Direct peers

• TurboTax (Intuit): Market-leading consumer DIY tax preparation software from Intuit, offering federal and state e-filing at tiered price points. Most direct head-to-head competitor to 1040.com, differentiated primarily by tiered vs. flat pricing.
• H&R Block: Hybrid tax preparation provider combining DIY online software with a national retail office footprint. Directly competes with 1040.com in the DIY online channel and bundles professional review services.
• TaxAct: Value-priced online tax preparation software owned by Taxwell (the same parent that owns 1040.com via Drake Software). Competes on price and accuracy guarantees in the same DIY federal/state e-filing category.
• TaxSlayer: Online DIY tax filing software targeting budget-conscious individual filers with tiered pricing. Direct competitor in the affordable tax software segment where 1040.com's flat-rate positioning competes.
• FreeTaxUSA: Low-cost online tax preparation service offering federal filing free and state filing for a small fee. Directly competes with 1040.com on price-sensitive DIY filers.

Emerging players

• Cash App Taxes: Block's free mobile-first tax filing product that disrupted the value tier by offering $0 federal and state filing. Pressure-tests 1040.com's $34.99 price point, especially for younger/mobile-first filers.
• IRS Direct File: Government-run free federal e-file pilot expanded in recent tax seasons. Represents a free public-sector alternative to 1040.com for simple W-2 filers and a structural threat to the DIY paid category.

Broad incumbents

• Jackson Hewitt: National tax preparation retailer with brick-and-mortar offices and an online product. Competes across the broader consumer tax preparation category rather than purely DIY software.
• Liberty Tax: Retail and online tax preparation service with a national office footprint. Overlaps with 1040.com in serving individual taxpayers but emphasizes assisted filing over pure self-serve software.

Others

• Drake Software: Parent company and operator of 1040.com, providing the B2B professional tax software used in 60,000+ tax offices. Shares tax-code R&D and infrastructure with the consumer 1040.com brand.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks6 records

Key highlights6 records

Customer concentration

• Xx.com/taxesonline

Compliance3 records

Revenue estimate

Valuation estimate

Number of profiles

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about 1040.com