I was told it was free state and federal filing??? Its telling me i owe 120 out of taxes i feel like i was misled..

TurboTax does have 2 free products, but unfortunately you are not in one of them.    You appear to be using Online Deluxe, which is $40 for Federal and $40 for state.  And if you chose to pay those fees out of the Federal refund, there is an additional $40 service fee for that payment method, making the total $120.

Did you start out in that Deluxe Edition?   If you started in Free Edition, you may have had to upgrade to Deluxe if you needed certain additional forms in your return, such as itemized deductions, or one of the Schedules 1-3, etc.    Free Edition cannot handle all the forms, but there is another free product you might be able to use, if you qualify.

You haven't said if you have already filed or not.    If you haven't filed, you have some options to switch to one of the free products that I can tell you more about.   If you have already filed, then it would have been good to have asked this prior to proceeding once you saw it was going to charge you.  

If you've already filed and thought you were using a free product, all you can do is talk to Customer Support, but I don't know what they would say or do. 

We can tell you more about your options once it's clear whether you have already filed or not.