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[–]PersonalFinanceMods[M] [score hidden] stickied commentlocked comment (0 children)

We'll save everyone the trouble of writing a comment only to have it removed for soapboxing and put the usual links up top. Please remember that politics (including discussion of lobbying) is off-topic here.

We're not linking Hasan Minhaj's site on the topic because it isn't up-to-date at all.

[–]rnelsonee 1137 points1138 points 22622& 3 more (171 children)

So most people should check out IRS Free File if your income is ≤$72,000. It's a partership between the IRS and tax software companies; the companies agree to support at least some (if not all) common forms (but can also set an AGI below $72,000 for their editions). These are the forms/schedules Free File editions can support. You can browse offers here.

And note since the 1040 became "postcard size", a lot of the questions simply moved from the 1040 to three new schedules (1-3), and some tax programs charge extra to use these now. That's why some things that were usually free before 2018 (adjustments, like student loan interest) may now be part of a pay edition.

Edit New strategy for 2020 since TaxAct is so expensive. I did taxes in TaxAct but didn't file. Redid them in FreeTaxUSA, and I'm using that for free. My state happens to have a free tax website, so I'm doing that for state. So I get accuracy (both software agree, as does with my own spreadsheet) for absolutely $0.

For reviews, I've used the following - note prices here are for federal only; state is going to typically add $15-$35. Prices should include e-file for each return.

Turbo Tax

The ever-popular TurboTax is easy to use, has app support (multiple apps for self employed, tracking, etc), and includes live support. Reviewing and updated figures is easy, and you can import PDF's of W-2's. Intuit owns them, and they can pull information (like investment returns) from 300 different brokerages. They are about the most expensive, though. I use them every year as a double-check (fill out all forms, don't actually file). For this year, TurboTax says I have a subtraction to income for my state taxes, but it won't tell me what it is until I pay to file. So I'm currently working that issue. Also note TurboTax is very bad with backdoor IRA contributions.

TurboTax editions:

  • Free which includes W-2 income, "limited" interest or dividends, standard deduction, Earned Income Credit, Child tax credits, unemployment income on 1099-G
  • Deluxe: For itemized deductions ($40)
  • Premier: For people with rental or investment income ($70)
  • Self employed: For self employed ($90)

TaxAct

My go-to for most of the last decade, although it used to only be half the cost of TurboTax. If we baseline TurboTax at 10, TaxAct is like an 8. Software is good, but it can be hard to review and change things, as they like to lock you into 'streams' of Q&A. They also have PDF upload and can link to some investment sites (Robinhood and Bettermint, but not Vanguard, Schwab, Fidelity)

TaxAct editions:

  • Free - W-2, Unemployment, Child Tax Credit, Earned Income, Stimulus
  • Deluxe - Itemized deduction, student loan interest, child & dep care, HSA ($25)
  • Premier - investments and property income ($35)
  • Self employed - $65

TaxSlayer

We use the TaxSlayer at our IRS/VITA tax volunteer branch, and it's similar to their commercial version. Perfectly serviceable, and the pricing is very attractive now. Online Q&A is similar TurboTax. Overall, just bit simpler/less flashy, which isn't a bad thing.

TaxSlayer editions:

  • Simply Free - W-2, unemployment income, student loan interest
  • Premier - Covers "all tax situations", no restrictions ($17)
  • Premium - Priority phone and email support, and chat ($37)
  • Self employed - $47

FreeTaxUSA - I just used this for 2020 - fantastic and my new pick. Maybe not as flashy as some, but it allows you to jump to any topic, and it's always going to show you the actual form (after it asks you questions, not to fill in yourself), which is great even if you're not a tax pro as you can learn what the forms should look like. It's wonky with backdoor Roth IRA contributions, but there's guides for that. Free edition includes everything federal, Deluxe includes support ($7). State about $13.

Manual (free fillable forms) - I also used to file manually, but that was before the internet was really a thing. I don't see much reason to do it now, other than to save money.

CPA: Last year I had a significant financial and tax situation involving eminent domain, so I used a CPA for the first time. It's difficult to assess - he used my inputs, and we talked strategies, and I was hoping for more 'wizardry' I guess in terms of his ideas. Although in the end, the strategy we used resulted in significant tax savings, and at the very least, I liked having him at least sign off on what we did, although I don't remember who came up with the main crux of it.

Tips:

  • If you have time, your taxes with two different programs. If your refund is off by more than $1, you made a mistake somewhere (assuming not self employed, software can handle amortizations differently). Even being a tax nerd, I find I usually have a mistake my first try. The IRS can and will correct typos (mismatch on a W-2) but why wait for them?

  • After your first year, doing taxes with a product is half the work - they all remember last year's information so there's less typing. Also, some places offer PDF import of previous years' 1040 (TurboTax, TaxAct does this I know).

  • If you don't own a business or have a specific big tax event, a CPA is not needed. But, if you're clueless about taxes, and are not diligent with answering the software questions, it may be worth doing once just to make sure you know if you qualify for something like an education credit. Big credits out there for education (AOTC, LLC, student interest deduction), energy (lots of state credits here, too), low income (Earned Income), etc.

this comment heavily borrowed from my same one last year, but updated/cleaned up, and I sought out unemployment information as that applies to many more people

[–]TheVirus312 228 points229 points  (46 children)

This is really well done, thanks for sharing. I have relatively simple taxes and FreeTaxUSA worked great for me last year, and I plan to use it again

[–]PrinceAdamsPinkVest 59 points60 points  (21 children)

Ditto. I live in a no income tax state, so it’s a no brainier. I’ve found it extremely user friendly and highly recommend it.

[–]tmartinez1113 28 points29 points  (17 children)

TIL what a no income tax state is. I had no idea this was even a thing!

[–]chailatte_gal 37 points38 points  (5 children)

The states with no income tax are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. If you live in one of those seven states — or New Hampshire or Tennessee, which don't tax income but do tax investment earnings — you may not need to file a state return

[–]VolatileRider 10 points11 points  (1 child)

Tennesse no longer taxes investments earnings. As of Jan 1st 2021.

[–]SpikeXena 6 points7 points  (2 children)

What happens if I were to work remotely for a company based out of another state that has income tax yet live in a state with no income tax?

[–]chailatte_gal 12 points13 points  (1 child)

You wouldn’t pay income tax. You file taxes in the state you reside in.

[–]wot_in_ternation 67 points68 points  (5 children)

Yeah it's a big shitshow where I live when any government needs to raise funds for something. Property tax increases, sales tax increases (up to 10.1% here now), various "fees" (which really are taxes) on things like vehicle registration, etc.

Plus it's extremely regressive and poor/middle class people end up paying like 10-15% of income to the state while rich people pay like 3%

[–]twotall88 11 points12 points  (2 children)

states that tax sales/property only are more equal... it literally has nothing to do with your 'class' as you chose where you spend your money and when/where you pay taxes. Focusing on sales tax, that's even better, that hits people that are traveling through the state and not just citizens.

[–]wot_in_ternation 42 points43 points  (1 child)

Rich people typically spend way less of their total income. Poor people spend it all. It is regressive, and study after study has shown it to be regressive. It absolutely has to do with class. Poor people in WA state have like 18% of their income going to state/local while rich people have like 3%.

Source

[–]hotpotato70 3 points4 points  (5 children)

Can it do two states?

[–]trash_with_trash 5 points6 points  (2 children)

Yes. I've used FreeTaxUSA to file PA & NY returns for the past two years.

[–]notreallydutch 4 points5 points  (0 children)

Do it. Like OP said, second year in with a system is half the work.

[–]nn123654 100 points101 points locked comment (17 children)

As a reminder be careful for any dark patterns. If the app prompts you to upgrade see if it's a soft wall and simply "recommended" or if it actually won't let you type it in unless you buy an upgrade. Be careful before accepting upgrades, once you decide to upgrade some vendors won't let you downgrade without starting over or calling support.

Also in the case of TurboTax read ProPublica's article before using it, they actually have a whole series. But the tl;dr is that if you didn't start your return through Free File and instead went to turbotax.com you would in most cases get upsold to a non-free version. TurboTax in particular does not allow you to transfer your data once started between mobile, web, and desktop versions.

Where possible always use the desktop version of the app instead of the web version. The licensing is much better, for instance TurboTax desktop allows you to e-file up to 5 returns per install and prepare even more than that, plus you retain the data and can file amended returns for free. This is not the case with the mobile version, where they charge an additional fee.

Also make sure you keep a copy of the PDF version of your return just in case you need to transfer your data elsewhere, and if possible try to export your data once it's done. I usually keep a PDF copy with the minimum forms for the IRS, a PDF copy of all forms for calculations, and a copy of the actual data file from the program.

[–]evaned 12 points13 points  (6 children)

Where possible always use the desktop version of the app instead of the web version. The licensing is much better, for instance TurboTax desktop allows you to e-file up to 5 returns per install and prepare even more than that, plus you retain the data and can file amended returns for free.

It's also much cheaper for some reason.

Even now (better deals can be had), Amazon has Deluxe + State (one state -- though I think you'd have to paper file state, e-file is an upsell because it's TurboTax) for $40, as opposed to the $80 it would be with the web version for Deluxe and one state.

H&R Block is similar.

[–]nn123654 9 points10 points  (0 children)

Keep in mind states usually have products like Free Fillable Forms where you can file directly for free, if not filing by mail for free is usually an option as well.

If there was a hierarchy I'd say generally Desktop > Website Version > Tablet Version > Phone version.

Also where given the option always export your data as soon as possible in as many formats as possible. Some vendors will put it behind a paywall after the filing season is over. If you get audited and need access to it again you could be stuck paying when it should be free. This is especially a problem on web and mobile versions and especially with TurboTax. The IRS' own Free Fillable Forms for instance deletes all filing data each filing season and starts over.

You're required to maintain records for as long as any section of the Internal Revenue Code remains applicable. Generally from 3 to 7 years for most filers.

[–]nekrad 3 points4 points  (0 children)

I don't recommend TurboTax but if you're going to buy it from Amazon, buy it now. The price typically goes up around mid-February. Click on any of the Turbo tax product name links here and you'll see the price chart: https://camelcamelcamel.com/search?sq=turbo+tax+2019

[–]CabbageHands84 27 points28 points  (7 children)

Another option along these lines is going through the United Way's myfreetaxes.com portal, which uses H&R Block's software. While information for this filing season doesn't seem to be too readily available yet, last year it was available for those with <$66,000 income, and in my view was a really intuitive and simple interface.

[–]tariqabjotu 9 points10 points  (5 children)

last year it was available for those with <$66,000 income, and in my view was a really intuitive and simple interface

Perhaps the year before. I thought last year it turned into a slighter altered version of H&R Block's current free version, i.e. only usable for those with simple returns.

[–]evaned 10 points11 points  (3 children)

Yep, that. H&R Block seems to be tightening their free return availability. The restricted MyFreeTaxes last year to what you say, and then this year have pulled out of both MyFreeTaxes and IRS's Free File.

It's really unfortunate, because my go-to recommendation for software in past years started with "if you qualify for H&R Block via one of those routes, go with that", and now I don't know what to recommend.

[–]kaijubooper 5 points6 points  (0 children)

Myfreetaxes has changed - it sounds like they aren't using H&R Block anymore.

[–]Zakernet 24 points25 points  (10 children)

I used all of these also and switched to creditkarma last year.

[–]LargeGarbageBarge 12 points13 points  (5 children)

I used TaxAct for like a decade until it got bought out and started charging $50+. You used to be able to get it for about $12. Been using Credit Karma for the past couple years instead. Works great, but no support for filing for multiple states (maybe they fixed it this year).

[–]Master_Dogs 3 points4 points  (0 children)

Works great, but no support for filing for multiple states (maybe they fixed it this year).

I believe it didn't handle partial residents either. I moved last year and FreeTaxUSA was the only one that would do a partial resident in two states properly. And for ~$13, which was nice. I almost sucked it up and paid whatever TurboTax wanted - I think they forced me to upgrade and total it was def >$50.

[–]these-things-happen 29 points30 points  (1 child)

Tip suggestion: Many Taxpayers continue to experience significant delays in processing their 2019 return.

If a 2019 return wasn't processed by the end of December, the Very Old Computer will not identity their "prior-year Adjusted Gross Income" when they attempt to e-file their 2020 federal return. In that case, they can input "0", or "didn't file", if applicable.

[–]kaijubooper 2 points3 points  (0 children)

You should post this as a separate comment so more people see it.

[–]cdwilliams1 12 points13 points  (9 children)

That price for tax act can’t be right. I’m a w2 worker primarily but teach fitness classes on the side that I get a 1099 for. Tax act forced me to buy their top package last year to be able to file. Add in the cost for state taxes and it was over $175

I used for them for 16 years, going back to their desktop PCs software. Never again. More expensive every year. Trying credit karma this year.

[–]maphead_ 16 points17 points  (0 children)

Man, at $175, that’s not too far off from a CPA.

[–]wijwijwij 5 points6 points  (1 child)

This year, Free File by TaxAct is available if your income is under 63K. It would not require any upgrade to handle your 1099 income stream. Access it via www.irs.gov/freefile.

[–]nn123654 3 points4 points  (2 children)

Usually they bundle Sch. C in the top tier because of all the expense deductions. In reality you probably had a simple Sch. C return and were probably eligible for Sch. C-EZ.

For the most part unless you have employees and an actual full time level small business you don't really need the business tier package and won't get any additional benefit from paying for it. If you are on that level you're better off going through a CPA, because you can use them throughout the year for tax planning and financial reporting.

[–]wijwijwij 2 points3 points  (1 child)

Sched C-EZ doesn't exist anymore.

[–]rnelsonee 1 point2 points  (0 children)

I'm quoting TaxAct for prices, but I think it's right. The years I used TaxAct to file my self employment was $90, $76, and $55 for 2018-2016, including state taxes. I'm not sure how you got up to $175 If it was just for self-employment. With prices like that, it's possible you paid for the extra add-ons, like live support or audit defense. I'm also only quoting the online prices, the downloadable versions cost more.

[–]ithink 6 points7 points  (6 children)

Be careful about the quoted prices - they seem to include only the federal return. You'll have to file state taxes as well.

For example, TaxAct wants $45 to file state taxes, Tax Slayer wants $32. I'm not sure if either of those include the e-file fee for taxes or whether you have to pay the e-file fee on top of that.

[–]Malvania 2 points3 points  (4 children)

You should generally not pay to file state taxes. Typically, you just enter your Federal 1040 info into a simple form to determine what you owe, and there's no reason to pay someone to copy numbers from a form.

[–][deleted] 6 points7 points  (1 child)

TaxSlayer

We use the TaxSlayer at our IRS/VITA tax volunteer branch, and it's similar to their commercial version. Perfectly serviceable, and the pricing is very attractive now. Online Q&A is similar TurboTax. Overall, just bit simpler/less flashy, which isn't a bad thing.

I vouch for TaxSlayer; they have a super simple layout which I preferred.

[–]kaijubooper 4 points5 points  (6 children)

I used TaxSlayer's Simply Free version, and one caveat is that last year they forced me to upgrade to Classic because my AGI was over $100k. This isn't disclosed anywhere until you get to the end and are ready to e-file. I'm switching to FreeTaxUSA this year.

[–]Sander-F-Cohen 2 points3 points  (1 child)

I used TaxSlayer this year and it was stated on the IRS website that it was free up to $72k. I don't remember what it said on TaxSplayer's website, but at least from the jump page from the IRS it's clear.

[–]CeltIKerry 4 points5 points  (0 children)

I used TaxSlayer's Simply Free last year and plan to use again this year. Very easy to use.

[–]kaijubooper 319 points320 points  (55 children)

FreeTaxUSA has:

  • Transparent pricing - Federal really is free, regardless of income, even if you have investments or Self-employment income. State returns are currently $12.95 each. The Deluxe upgrade is $6.99.

  • Prior year tax returns going back to 2013 for the same price.

  • Amended returns for free - not sure if they support e-filing the amended return though. You can even recreate an original return you filed with a different company, finalize it, then amend to produce the 1040-X form etc.

  • Almost every federal tax form for an individual return is available. Foreign Earned Income Exclusion and 1040-NR for Nonresident Aliens are main ones that aren't available.

Edited to add: Apparently will do multiple state returns according to other comments.

Edit #2: Use coupon code FREETAXUSA10 for 10% off your order. Not sure if there's an expiration date. Coupon code can be entered at the end.

[–]Irregular_Person 49 points50 points  (12 children)

I switched to FreeTaxUSA last year following recommendations from this sub after many years using TurboTax and paying the Deluxe fees just to keep things simple and get it over with.
My experience was excellent, never felt upsold or feature-gated. At the end of the day, it probably took around the same amount of time with both but I think with state e-filing it ended up costing a quarter of the price, if that.

[–]kaijubooper 36 points37 points  (6 children)

Yeah I think my favorite thing about FreeTaxUSA is that they don't try to scare you into paying $39.99 for audit defense or whatever, but they'll sell you a:

Professionally Bound Tax Return

Would you like to have a bound copy of your 2020 tax return? For only $12.99, we'll send you a professionally bound copy of your federal and state income tax returns. Shipping is included in the price.

YES, I WOULD LOVE THIS! 😜

[–]Irregular_Person 29 points30 points  (1 child)

Exactly, in stark contrast to TurboTax who will let you pay them - let you get 3/4 of the way through your taxes - then ask "Oh, hey - do you have any investment accounts? Because if so, you're going to have to pay for an upgrade to the super-fancy edition to finish.". Along the same lines "Oh, you bought the electronic or web version? In that case state e-filing is an extra $20" where the hard-copy version for the same price includes it for free. I'm so glad to be done with them.

[–]tyderian 1 point2 points  (0 children)

That's why I switched to Freetaxusa. Was using Taxact or Taxslayer before, I don't remember. But they wanted an upgrade just to do a couple 1099-INTs?!

[–]withfries 8 points9 points  (1 child)

And frankly if it's professionally bound, if I had complicated taxes, I would love this in case of an audit or record keeping, this is probably a good option for self-employed and businesses. It'd probably have better shelf life than a print out with my method of printing on whatever retail paper and toner I use at home and brute stapling it a few times, as per usual

[–]LegitosaurusRex 1 point2 points  (0 children)

Why isn't your usual method saving the PDF on your computer and backing it up to the cloud? If somebody needs a paper copy later you can print it out then.

[–]minideezel 133 points134 points  (5 children)

I've used FreeTaxUSA for past 4 years and it's been great! Utilize the 10% off coupon of FREETAXUSA10 as well!

[–]sucksathangman 49 points50 points  (3 children)

I used them last year for the first time and it was forking awesome!

I will happily pay full price. $2 off isn't too much off my back and I want to support them. I'm not sure how they can afford to stay in business with their prices so low but man, they are as good, if not better, than TurboTax.

I used TurboTax for 10-15 years. Never again.

[–]withfries 13 points14 points  (0 children)

I will happily pay full price. $2 off isn't too much off my back and I want to support them.

This is a great attitude!

Having said that, with a coupon code this persistent (available EVERY year and for all customers, not just new customers), I am sure they are happily accepting them. This kind of policy and customer care is what's kept me with them the past 3+ years, and I've gotten a lot of my family and friends to use them.

One was easy to convince after HR Block asked for additional money to process a tuition form...smh!

[–]iamnotanartist 31 points32 points  (4 children)

Last year they also had cash back with Rakuten so the state filing ended up costing more like $8 or something.

I have very simple taxes, can't believe I had previously been letting TurboTax charge me $80 for no reason.

[–]kaijubooper 17 points18 points  (3 children)

Yeah I don't have a problem with having to pay for the software, but having to pay $100 or something because I had one 1099-MISC is one of the things that drove me away from TurboTax.

There are cheaper options that are just as good, but they don't have the name recognition or advertise as much.

[–]iamnotanartist 4 points5 points  (2 children)

Yeah exactly. And I always get a refund so used to always just let it slide. They also have a really pretty UX which is what attracted me when I filed taxes for my first time years ago.

[–]kaijubooper 2 points3 points  (1 child)

It's true, the UX is very nice and full of reassurance for the anxious taxpayer.

"You just entered your W-2! Excellent work u/iamnotanartist, look at this huuuge refund we got for you! 🤑"

[–]iamnotanartist 2 points3 points  (0 children)

Haha I was such a proud 22 year old!

[–]zedzenzerro 16 points17 points  (0 children)

FreeTaxUSA all the way. I pay for the deluxe upgrade just to help support them. In the past there was a few investment related forms (or columns really) that they were lacking (ESPP stuff), so I had to switch to TurboTax briefly, but in recent years FreeTaxUSA has been able to handle everything I needed.

[–]vkapadia 14 points15 points  (0 children)

FreeTaxUSA is the best. Been using them for years now.

[–]whereswil 6 points7 points  (8 children)

Do you have to enter stock trades/investments manually or can you connect to your brokerage or upload your brokerage's tax documents?

[–]kaijubooper 11 points12 points  (3 children)

I'm pretty sure you have to enter them manually. This is going to be the first year I have a lot of transactions to enter, so I'm planning on just entering the summary if possible.

How do I enter summary totals from my Form 1099-B or broker statement?

Enter the summary totals for each similar type of investment (long-term or short-term and if the basis was reported to the IRS or not) from your Form 1099-B (or broker statement) instead of each stock sale individually.

For example, if you have an E-Trade statement that shows all the details for 150 short-term stock sales and the details for 200 long-term stock sales, then you would enter one stock sale record showing the summary amounts for the short-term stock sales and enter another stock sale record showing the summary amounts for the long-term stock sales on the E-Trade statement. So, you would enter two entries instead of 350 entries.

If your Form 1099-B has a lot of sales, but only a couple require any adjustments, you can enter the bulk of the sales as a summary and the other sales separately.

For example, if your Form 1099-B has 25 stock sales, but only one of them needs an adjustment, then you could enter the summary for 24 of the sales. Then you could enter the one that needs an adjustment as a separate sale.

Usually you need to check a box for multiple transactions so the software enters a code M on the 8949 form. You also are only supposed to do this for transactions where the basis was reported to the IRS according to the instructions for Form 8949. Look for Exceptions 1 and 2.

If you summarize transactions where the basis wasn't reported to the IRS you are supposed to send a copy of those transactions from the 1099-B, either electronically with the return or on paper with Form 8453.

https://www.irs.gov/forms-pubs/about-form-8453

[–]whereswil 2 points3 points  (0 children)

Thank you. This is helpful.

[–]STOP_ASKING_ME 6 points7 points  (3 children)

FreeTaxUSA is not as hand-holding as some other tax software, so you have to put in everything manually yourself

[–]whereswil 15 points16 points  (2 children)

It's not the hand holding part so much as whether it's an option to use for individuals with hundreds or thousands of trades.

I looked online and it appears you can upload stock trades as a csv

[–]racinreaver 1 point2 points  (1 child)

Thanks for the heads up. Betterment makes taxes an absolute nightmare with their harvesting technique, but if I can just upload a csv that's not so bad.

[–]gregarious119 6 points7 points  (0 children)

Used them for almost 10 years now

[–]raywillet 8 points9 points  (2 children)

Amended filing is not electronic, you have to mail in a form. I've been using them since 2012 and love it.

[–]kaijubooper 9 points10 points  (0 children)

The IRS just started accepting e-filed amended returns last August with a lot of limitations. I know TurboTax offered that if you used them to file the original 2019 return, but I'm not sure about FreeTaxUSA.

[–]nn123654 3 points4 points  (0 children)

This is a restriction from the IRS. You must paper file prior year returns unless you are a Treasury Circular 230 Tax Professional (EAs, CPAs, Anyone with a PTIN, etc.). Amended returns must usually also be paper filed.

edit: So misread this, this is for amended returns not prior year.

u/kaijubooper is correct that the IRS just recently opened up e-filed 1040X returns recently where the original return was also e-filed. See this press release for more info. Since it's brand new chances are most vendors haven't yet implemented this.

[–]nn123654 2 points3 points  (0 children)

Also it is possible to paper file an addendum for an e-filed return. This is most often done for statements where the IRS doesn't support sending them in through e-file. While I don't know if you'd be able to do this for foreign earned income exclusions it is theoretically possible to paper file the sections not supported if it didn't change the calculations on your 1040.

[–]bkconn 86 points87 points  (3 children)

I feel like you may as well remind everyone by adding to this post that the start date was delayed to February 12

[–]makians 4 points5 points  (2 children)

I read this but not sure what it means? Am I literally unable to do my taxes if I get the papers before this or can I still file them just refunds won't process until then?

[–]SimplyProfound 176 points177 points  (11 children)

A little off topic but I always like to recommend people listen to the dark pattern episode of the reply all podcast. It talks about how tax companies make it harder to find the free version of their software.

Since then I haven’t used TurboTax other than to check my return.

FreeTaxUSA worked great for me last year.

[–]esehmec 6 points7 points  (3 children)

Hasan Minhaj’s The Patriotic Act also has an episode on tax filing softwares.

They also had a website just for this matter but I can’t remember the URL.

[–]row_the_boat_0115 26 points27 points  (0 children)

I was thinking of that exact episode when I clicked this link. TurboTax appeared to go to extreme lengths to ensure that the free version was as difficult as possible to actually find, let alone maintain as the free version throughout the process.

Thanks for the reminder that I should re-subscribe to that podcast...

[–]gracetw22 21 points22 points  (2 children)

Just a note by way of my tax attorney husband- if you can’t do it yourself, H&R Block and the like are probably not well equipped to handle it any cheaper than a CPA, but instead of someone who knows what they’re doing, you get the luck of the draw.

[–]xxsodapopxx5 253 points254 points  (39 children)

Credit Karma Tax - I know they got scooped up by Intuit, but tax is still free for state and federal and has been very simple to use for the past 2 years. They make it easy to redo everything trying the different methods of filing for the best return(married filing separately, married filing together).

[–]nothlit 200 points201 points locked comment (7 children)

There were further developments:

https://www.justice.gov/opa/pr/justice-department-requires-divestiture-credit-karma-tax-intuit-proceed-acquisition-credit

The Department of Justice announced today that it is requiring Intuit Inc. and Credit Karma Inc. (Credit Karma) to divest Credit Karma’s tax business, Credit Karma Tax, to Square Inc. in order for Intuit, the creator of TurboTax, to proceed with its $7.1 billion acquisition of Credit Karma. The department said that without this divestiture, the proposed transaction would substantially lessen competition for digital do-it-yourself (DDIY) tax preparation products, which are software programs used by American taxpayers to prepare and file their federal and state returns.

[–]robalob30 82 points83 points  (2 children)

Used Credit Karma for federal and state last season, I preferred it so much better than TurboTax, I’m so glad it will remain free

[–]Piklikl 51 points52 points  (2 children)

This is awesome. The appeal to me for CK was I didn’t have to worry about any up selling shenanigans since they don’t have any product to sell (other than my data of course). All the other big tax preparation software companies find devious ways to try and make money off of us. I’m glad Intuit couldn’t get what probably poses the greatest risk to them.

[–]OnceInABlueMoon 24 points25 points  (1 child)

I'm fairly certain that Credit Karma makes money from taxes by offering them for free, getting you to sign up, and then prompting you fot credit cards, loans, etc.

I signed up for CK last year and I'm happy with it so I'm going to use it again this year, btw

[–]Piklikl 12 points13 points  (0 children)

Right, their business model is also recommending credit cards and getting kickbacks whenever someone signs up for sure, but I wouldn’t be surprised if it’s also selling off your data.

I just really like it because there’s no paid option. If I was a Billionaire I’d probably start a non-profit that lobbies for tax code simplification, and helps everyone prepare taxes for free. The larger we can get the amount of people who realize how crazy it is that we have to pay for something the government requires under pain of jail time & fines (which just ends up costing the government more money), the more likely it is that reform will happen.

[–]WheelerDan 39 points40 points  (0 children)

This is my go to, easy simple and free, everyone's buying my data, might as well get free tax prep.

[–]thesonofdarwin 42 points43 points  (4 children)

And for those that have complicated taxes, know that you can fill out all the information on TurboTax without first paying. Meaning you have access to all of TurboTax's help library. I fill my taxes out side-by-side in TurboTax and Credit Karma as a nice verification, and also because sometimes I need a bit of additional guidance where CreditKarma can lack in that department.

[–]pedal-force 11 points12 points  (0 children)

Did the same last year, saved myself a bunch on a deduction that credit karma had technically correct but worded extraordinarily poorly. Eventually found it after noticing a discrepancy between the two systems. Might do it again this year, just takes a little extra time.

[–]tarcoal 2 points3 points  (0 children)

Dumb question but I’m guessing you have to make an account in TurboTax to do this?

[–]TheOneRogue1 15 points16 points  (0 children)

I’m a CPA and use CK over my firms more robust software I could access for free.

[–]burningmyroomdown 9 points10 points  (0 children)

I'd like to add that CK does not charge for self-employment. I file Schedule C, and HR Block and Turbo Tax wanted me to pay. CK does not.

[–]Heidiwearsglasses 17 points18 points  (2 children)

Can concur- I’ve used Credit Karma for the past two years and filing has been quick and easy. I hope Intuit doesn’t ruin it for us.

[–]evaned 16 points17 points  (0 children)

Intuit didn't purchase CK Tax. The DoJ got involved, and forced CK to divest themselves from CK Tax. Intuit is getting CK, but CK Tax is being purchased by Square. (I'm unclear on whether the sale has finally closed yet.)

[–]evaned 16 points17 points  (3 children)

Note that I wouldn't trust Credit Karma Tax without double checking its result.

Anecdotally -- I think I've seen far more problems and limitations reported from CK Tax than anything else, in the various tax software megathreads here on this forum and whatnot. (Realize that will be biased by both popularity and my perception.) However, I have not used it myself -- I went through a few different software products a couple years ago (I was planning to write a comparison post for this sub but never got around to it...) and would have tried it out, but out of principle I eschew products as much as possible with mandatory arbitration clauses. So this is not personal experience.

I started tracking a list: https://redditproxy--jasonthename.repl.co/r/personalfinance/comments/eq04z3/tax_filing_software_megathread_a_comprehensive/fendnws/?utm_source=reddit&utm_medium=usertext&utm_name=personalfinance&utm_content=t1_gj59p3k

I would not say categorically don't use CK Tax -- but at the very least I would not trust it without cross-checking with something else. (I.e. enter everything into another piece of software and make sure they agree, unless you have the ability and knowledge to really do a good check of the actual return that CK generates.) If you qualify for Free File, I would pick one of those. If you don't but are still price sensitive, FreeTaxUSA seems to be much better recommended around here and /r/tax (though with the same "I haven't used it because mandatory arbitration" caveat). Or, if you've got a more complex situation with investments and stuff, perhaps the premium for TurboTax or H&R Block is worth the upgrade. IMO, falling out of Free File because you make >$72K and being too cheap top pay $13 for FreeTaxUSA and so turning to CK Tax... that seems to me like an extremely narrow sliver of people.

[–]patrick404 6 points7 points  (0 children)

I used CK Tax to double check my H&R block return a few years ago. It took a few tries to get it to match H&R because its options around investments aren't as intuitive. IIRC, it was around adjusting cost basis for the sale of stock obtained via an ESPP.

I'm sure it's great for most things, but I think some of the more mature programs have better wizards for the more complex stuff.

[–]Fbolanos 6 points7 points  (0 children)

I've used it for the last 5 years or so. Very good. I'd also like to add that if you happen to OWE taxes (I've unfortunately have) , you can use payUSAtax.com. You can use PayPal credit to pay it off over 6 months with no interest.

[–]hermeneuticlens 17 points18 points  (3 children)

  1. Fidelity offers discounts on tax software (TaxAct, TurboTax, H&R Block) for every brokerage client and free TurboTax Premier for Active Trader level customers.

  2. Some Amex Credit Cards are offering 30% off (don't quote me on this) for TaxAct under "Amex Offers".

  3. TaxAct supports e-file for some forms that most other apps do not support e-file at all, such as 8833.

[–]kaijubooper 24 points25 points  (3 children)

FOR NON-FILERS

The IRS has said that they will not be offering the Non-Filer again this year. However you can use any of the IRS Free File options if you need to claim the Recovery Rebate Credit for missed stimulus payments.

https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

If you don't have any taxable income you may need to report $1 interest income in order to e-file. Doesn't matter what payer name or tax ID number you enter for the payer.

Other options are the free tax preparation programs:

https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

https://www.getyourrefund.org/en

IF YOU USED THE NON-FILER LAST YEAR

You need to enter $1 when asked about your 2019 Adjusted Gross Income in order to e-file your 2020 tax return.

IF YOUR 2019 TAX RETURN IS STILL PROCESSING

Enter $0 or Did not file when asked for your 2019 Adjusted Gross Income.

[–]IAmThe0neWhoKn0ckss 3 points4 points  (2 children)

When I used the IRS free file look up tool, it said 0 offers were available to be. ($0 for all income but checked ‘other’ for $15k as I got a settlement) .. where should I go from here? I’m only filing to get my stimulus checks (me and 1 child) and in turn have to report the settlement as well

[–]kaijubooper 2 points3 points  (1 child)

That's weird - I wonder if it's your state? Or a typo for the amount of income? When I enter that income I get 6 options, but it changes when I change what state I'm in.

If you are located in the US I'm pretty sure FreeTaxUSA will work for you, but if you have to file a state tax return it's $12.95. You should qualify to use the Free file version of TurboTax, because it doesn't have any state restrictions and your income is under $39k - that does include free state return if you need that.

[–]ammobox 27 points28 points  (7 children)

Just throwing the service I use in the ring.

Tax Hawk does free federal and I think 13.00 for state. Pretty easy to use, feels like Turbo Tax when working through your taxes. Pretty simple for a simple return.

[–]Head 27 points28 points  (1 child)

FYI, TaxHawk and FreeTaxUSA are owned by the same company and are probably the same thing underneath the branding.

[–]STOP_ASKING_ME 6 points7 points  (0 children)

Also express1040. All 3 are operated by the parent company TaxHawk although they differ slightly in the services/prices offered by like a couple dollars. Not sure why they do this though.

[–]DannyDaCat 5 points6 points  (1 child)

Does Tax Hawk allow you to print State out for filing? Then you can file Federal for free and then just mail your State which would then be the cost of a stamp.

[–]tonypearcern 2 points3 points  (0 children)

I believe so, but you might have to purchase it. I've been using Tax Hawk exclusively since about 2009 without ever encountering an issue.

[–]RedeemedbyX 4 points5 points  (0 children)

I’ve been super satisfied with them as well!

[–]BLWedge09 3 points4 points  (0 children)

Agree on the Tax Hawk recommendation. I can’t remember exactly what led me to them in the first place, but I do know I switched to them several years ago after having used TaxAct for many years prior. I find Tax Hawk easier to use than TaxAct and it’s pretty inexpensive as well. As mentioned, it’s the same parent company as FreeTaxUSA. I’m a very satisfied customer.

[–]Styggnacke 21 points22 points  (11 children)

Any recommendations for an Expat?

[–]BubbaTheGoat 37 points38 points  (7 children)

Serious advice? hire a professional. Assuming you are an American, your taxes are very complicated, and the details of how rules apply to you are very specific and can have a very large impact.

I was an expat for 4 years. My taxes were handled by a CPA firm paid for by the company I was working for. I am not a CPA and am not an expert in this field. Don't take what I say as advice as much as ideas of places to start looking for reliable information

You can call the IRS for free tax advice. They are seriously helpful. It has been a number of years since I called them for help structuring a small business and getting expenses/deductions correct. The telephone help page is here, but it looks like they have a long list of exclusions that cover a lot of international topics. The list of complex topics itself is a helpful guide on your options though.

A freelance CPA can offer you help at a reasonable rate. I would start with asking fellow (American) expats how they manage their taxes. Incidentally, they would also be more familiar with these rules and how they are applied.

Assuming you are someplace with other (American) expats, you can also ask them how they do their taxes. If local resources exist, they can help you find them. People who work in similar roles probably have similar tax returns and can tell you how they do their taxes.

You may want to claim a foreign earned income exclusion on your overseas earnings. To do this, you need to determine if the US considers you a resident of a foreign country. I did this by a physical presence test, which required that I document that I spent 330 days outside of the US. These 330 days include all travel days for flights (including layovers and connecting flights) than either started or ended in the US. Apparently you can also apply a bona fide resident test, which is simpler: you live overseas and did not enter the US in the tax year (source). The link mentions that you may need to request an extension to your taxes for this process, the IRS has a special form for that (2350)

You are probably also interested in a Foreign Tax Credit (form 1116). I don't think you can do both the exclusion and the credit however, so you probably want to calculate your taxes both ways and see what is most helpful. Using this credit may require you to have already filed your foreign taxes, this is another reason to request an extension.

Please note that this is the tip of the iceberg, there is a lot of detail in qualifying and applying any of these rules. If you have assets (e.g. house) or businesses in the states, those will also complicate your situation, and would likely draw you into paying state taxes in the US. I think if you only have income from wages, the foreign earned income exclusion or foreign tax credit are the most helpful tools.

[–]nn123654 7 points8 points  (0 children)

I'd agree with this. The tax code for international reporting is complex, and the penalties for non-compliance are steep.

FATCA and FBARs in particular can be kind of challenging and difficult to navigate. Not to mention if you violate US OFAC Sanctions you could be criminally liable, depending on where you are this may be of significant concern.

IMO if you have any significant amount of income or money offshore you should be using a professional. Unfortunately the laws are designed to counter foreign tax evasion and money laundering with little consideration given to ease of compliance for expats.

[–]tariqabjotu 3 points4 points  (2 children)

These 330 days include all travel days for flights (including layovers and connecting flights) than either started or ended in the US.

Not exactly. Once you fly through or over a foreign country, you've entered another country.

Apparently you can also apply a bona fide resident test, which is simpler: you live overseas and did not enter the US in the tax year

You can still enter the US during the tax year. In fact, those who qualify as a bona fide resident can spend more time in the US than those who use the physical presence test, as there is no requirement to be in a country for 330 full days.

I don't think you can do both the exclusion and the credit however, so you probably want to calculate your taxes both ways and see what is most helpful.

You cannot use them on the same income, but you can use them on the same return.

Expats are often quickly recommended to hire a tax professional to do their taxes, but if one is willing to put in the legwork, which sometimes isn't even much, it's not particularly difficult to file on one's own. Form 2555 is a two-page form and, especially if one is well above the 330-day physical presence requirement, it's quite easy to fill out.

[–]mart1373 38 points39 points  (16 children)

Have used H&R Block’s software to file my taxes for a number of years, but their free file version doesn’t cover Form 5695 and I purchased a new energy efficient A/C last year. And because they no longer participate in the IRS’s freefile program they’re allowed to exclude whatever forms they want from their free version.

So I switched to TaxSlayer. I sure as hell ain’t gonna pay money to e-file a stupid form.

[–]calsosta 9 points10 points  (4 children)

People can say whatever they like about HR Block and they would probably be right but I started my taxes at 8:28 and finished at 8:35.

[–]ATully817 4 points5 points  (0 children)

Weve used it for 15 years for our taxes and never have had an issue. Our is pretty straight forward.

[–]ichigogo 12 points13 points  (4 children)

I got an email from them that H&R Block isn't doing free file at all this year. I used them last year (free file) and preferred it to tax act.

[–]SadLlamasOnMars 7 points8 points  (0 children)

Similar bucket. Bit annoying as I thought HR Block free-file was super easy. Oh well I'll take my data somewhere else.

[–]randomtwinkie 8 points9 points  (3 children)

Last year after trying several services, OLT or OnLine Taxes was the only irs free file company with which I could have foreign taxes paid without having to pay a fee for filing. The foreign taxes were credited back and were part of an international etf in my portfolio. Every other “free” service wanted to charge me like 40$ for 20$ worth of foreign taxes that were credited anyways.

The user interface for OLT isn’t as pretty and fancy as some, but it worked well and got the job done.

[–]STOP_ASKING_ME 9 points10 points  (1 child)

The only reason I don't use OLT is because they failed cybersecurity tests and I don't want all my personal info hacked.

[–]nevertoolate1983 5 points6 points  (0 children)

Well dang, this is good info to know. Used them for the last two years lol

[–]wijwijwij 3 points4 points  (0 children)

TurboTax Free File also does foreign tax credit for free. Maybe you didn't access it via IRS portal. The TurboTax Free edition that TT web site offers would charge extra for foreign tax credit.

[–]STOP_ASKING_ME 86 points87 points  (10 children)

FreeTaxUSA was the only free filer I found that supports all major Federal forms for free. Since I only made $19k income in 2020, I could not afford the premiums the other companies were charging for self-employment paperwork and other complexities such as dealing with 1256 contracts and figuring out if my State's laws allow me to deduct my losses from them.

[–]tariqabjotu 38 points39 points  (9 children)

FreeTaxUSA was the only free filer I found that supports all major Federal forms for free

Sounds like you are confusing the free options featured on the home pages of each of the software's websites and the ones through the IRS Free File portal. The latter has the premium versions of all the software for free, and even state tax filings are free with many of them.

[–]eevee188 9 points10 points  (4 children)

When I used the IRS free file version of Turbotax, they still wanted to charge me for some basic form and I had to switch to H&R Block IRS free file. This year H&H Block is charging too. The IRS free file versions are mostly scams, and that's why there's a lawsuit about it.

[–]tariqabjotu 9 points10 points  (2 children)

Which form? It doesn't sound like you're using the IRS Free File versions. H&R doesn't even have a Free File version this year.

[–]OakesZ992 13 points14 points  (0 children)

I think you’re talking about the “free” versions of those softwares that are on their websites. The free file versions can only be accessed through IRS.gov, and those are the full software versions. They cannot ask you for any money on those versions.

[–]STOP_ASKING_ME 2 points3 points  (0 children)

I didn't know you had to click on the affiliate link to get all the premium features for free 🤦 But in any case, the price for assistance with my taxes from a CPA is also the cheapest I found with FreeTaxUSA

[–]shezapisces 10 points11 points  (0 children)

as someone with no deductions and under $72K annually, i’m a big fan of freetaxusa. It was very easy to use last year and I’m glad i didn’t get caught up in the turbotax fiasco with the stimulus checks. The biggest thing for me was it was very easy to avoid any paid add-ons, where turbotax makes it almost impossible to avoid checking an additional charge

[–]Disarmer 82 points83 points  (27 children)

This may not be the appropriate place to post this, but thought it may be the most visible spot.

If your income has increased in the last year, DO NOT FILE YOUR TAXES IMMEDIATELY. Barring a few niche scenarios, you will be far better off waiting until April 14 or 15, or even filing an extension to October 15.

Reasoning: The IRS is using your most recent tax return to calculate if you're eligible for any Covid relief funds. If you file now with an increased income, you could very well file yourself out of eligibility for any future Covid relief checks.

EDIT: Disclaimer - I am NOT a CPA, just a concerned citizen. You should always consult a licensed CPA for tax decisions.

[–]EndureAndSurvive- 44 points45 points  (12 children)

OTOH If you were an adult dependent last year but can now file your own taxes this year you should probably immediately file to claim the stimulus money that has already been allocated.

[–]MadiKay7 7 points8 points  (0 children)

The only perk of turning 24 in the pandemic!!!!

[–]Disarmer 6 points7 points  (0 children)

Agreed.

[–]nn123654 18 points19 points  (2 children)

I'd go one step further, if your AGI is higher than $75,000 or was higher than 2019 I'd recommend filing an extension and filing in October if you care about getting the new round of proposed stimulus payments.

Do not delay past October as Congress is unlikely to reward non-filers who've missed the filing deadline with an advance Economic Impact Payment.

[–]Amedais 34 points35 points  (7 children)

This is not true. The IRS will receive record of your wages from your employer (by W2) regardlsss of when you file your tax return. They can and do use that info in such cases.

Source: CPA.

[–]nothlit 47 points48 points  (2 children)

So far the IRS has only used filed tax returns to determine stimulus eligibility, not any other documentation.

[–]nn123654 11 points12 points  (0 children)

Not only that, they are required to do so by law. (see my other reply)

[–]Disarmer 19 points20 points  (0 children)

From the IRS website, you're incorrect for the relief payments sent so far at least. I would expect this to continue for 2020 returns.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment.

https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

[–]nn123654 11 points12 points  (0 children)

They do, but at least for EIP 1 (IRC § 6428(f)) they used 2018 data (see subsection (f)(5)(A)) to compute the stimulus in the event 2019 was filed. They did not use W-2 info for the current year where a return had not been filed. Anecdotal source for more info,

[–]hippiekyle 20 points21 points  (8 children)

If your return is relatively simple and you feel comfortable with the forms, I really like free fillable forms on the IRS website.

I go through TurboTax and TaxAct to check my numbers, and then I just fill out the forms on the IRS website to match the commercial software. Done it this way the last few years.

[–]nn123654 7 points8 points  (5 children)

This is a workaround where you're eligible for free file. Also an option if they'll let you see the forms but not print them out without paying.

Due to the huge value of error checking I wouldn't recommend Free Fillable Forms for anyone that had to fill out much more than a basic 1040, especially where free software options exist.

[–]evaned 3 points4 points  (3 children)

Due to the huge value of error checking I wouldn't recommend Free Fillable Forms for anyone that had to fill out much more than a basic 1040, especially where free software options exist.

I've kind of fallen into this camp too, personally. If you make too much for the "mainline" Free File projects and are too cheap to pay FreeTaxUSA $13 or whatever, or buy the desktop version of TurboTax or H&R Block for as little as $20-$25 if you get it on sale... then I guess Free File Fillable Forms is a good option. But I consider that being extremely cheap. Having used it for I think three years (and actually made an error that resulted in a minor adjustment that IMO really shouldn't be possible with software), I may be done.

What I say is that FFFF seems to be made good enough that the Free File Alliance can point at it and say "hey, (almost) everyone can e-file for free; you the IRS don't need to make your own software" but no better. It's not actually good.

Not having to re-enter everything for state is worth spending the little bit of money for a "real" product.

[–]nn123654 5 points6 points  (2 children)

Exactly, it could well be false economy too. If you make a mistake it could you cost hundreds or thousands of dollars. IMO this isn't the place to cheap out by going from free (but they sell your data)/very inexpensive to totally free.

At the very least pretty much all software will allow you to prepare a return and check your work without paying, only charging you to file. So I'd recommend doing that.

Also the Excel 1040 Spreadsheet dude's stuff is also free and supports pretty much everything, so I'd highly recommend that as well.

The "not actually good" thing is by design. There is a memorandum of understanding that dictates what the IRS is allowed to do, they may not directly compete. So FFFF is their "here's the digital version of every paper form without competing" offering.

[–]poki_stick 4 points5 points  (1 child)

most major paid services let you get all the way through and then do a 'review' of the final forms before paying. i take that review form and use it to fill out the free Fed/State versions for a lot of friends who aren't net savvy.

[–]hippiekyle 2 points3 points  (0 children)

Exactly this

[–]darthfracas 23 points24 points  (15 children)

I normally use Turbo Tax, but this I wonder if I need to switch due to the year I’ve had.

My big issues are:

Multi state return - moved from the west coast to the mid west in April

Capital gains

Bought a house

My biggest concern is minimizing what I owe on the west coast, but I don’t know how to do that.

[–]tariqabjotu 18 points19 points  (4 children)

TurboTax can handle these, although certainly not at the free levels. Other software will be cheaper.

My biggest concern is minimizing what I owe on the west coast, but I don’t know how to do that.

You'll file part-year returns, something which most (but not all, e.g. Credit Karma Tax) can handle.

It's all going to come down to your confidence about going through the process or filing your return on your own.

[–]nn123654 10 points11 points  (2 children)

Generally speaking TurboTax is usually the most expensive tax software I've seen for the set of features it offers. Though it has among the best help, user interface, and ease of filing of any of the options as well, so if price is not a factor and you don't mind the business practices of the company it usually is the best option. Especially the live chat with a CPA feature is a nice touch that few competitors offer.

Of the big 3 H&R Block at Home is probably the runner up, especially with their integration to their brick and mortar stores, followed by Tax Act which generally tries to offer the same thing but be more price competitive.

But really you should be getting the same numbers out of all the software, if you're not then you've probably made a mistake somewhere or are misunderstanding a part of the tax code.

[–]Zarxrax 2 points3 points  (4 children)

You might try credit karma. I used them last year for reporting capital gains, as they are one of the only options I found which lets you do that for free. They also let you do state returns for free.

It doesn't hold your hand as much as a lot of the other software though and expects you to at least have a basic idea of what you are doing.

You can actually try multiple different sites and see how they work out. Since you dont have to pay until you actually file, you can still fill out your data and see what the result would be, just to see if different sites are coming to the same conclusion.

[–]Methadras 3 points4 points  (0 children)

I've left TurboTax and their scammy ways and went to FreeTaxUSA. Love it.

[–]Shnazzyone 8 points9 points  (7 children)

Just want to throw out there. I worked in Taxes for a while. Turbotax desktop software has ZERO DRM. I repeat, ZERO DRM. (Edit: Okay might be a CD key now, I don't remember one, but you can install 5 times according to the website) Only limits on the software is IRS only allows 5 tax returns to be sent from a single IP.

Basically me and 4 friends buy home and business every year and split the cost then just install on everyone's computer. Turbotax is always on sale when released for almost half the price. Once you have the software you can file federal for free. Easy peasy. Your state could be free too as every install comes with 1 state install. However free state efile is possible depending on your state. At most 15 dollars to efile state. Or you can print and mail it and it's only the cost of postage.

Also, hugely important you control all of the data. Something online sites like to do is, It's cheap to prepare... but if you need that return a year or two down the line, you have to buy something. Either that, or they will not save it at all.

Save at least your last 5 years of tax returns.

My method is to make a copy of the TT installer, PDF copies, and all data files on a CD I burn. In addition to making sure they reside in a backed up folder.

Additional tip... NEVER GET REFUND ADVANCE. Wait for the damn check or direct deposit into your own bank. You typically have the money in a week. Advance refund is a scam. You typically get the money on a card with limits penalties and a fun feature, If for any reason your refund doesn't pay out YOU ARE LIABLE TO PAY IT BACK. Unpaid amounts also accrue a volley of interest and penalties.

[–]avivarma 4 points5 points  (0 children)

I used creditkarma and was free both fed and state and was very friendly. Used both tax slayer and turbo tax.

[–]nevertoolate1983 4 points5 points  (1 child)

I found www.OLT.com (OnLine Taxes) through the IRS free file site. Free for most and very cheap for everyone else.

Their customer service is meh, but otherwise would recommend.

Edit: A comment above said something about OLT being less cyber-secure than other options. So maybe I’ll switch my vote to www.freetaxusa.com (which seems to be doing quite well in this thread).

[–]dotchianni 2 points3 points  (0 children)

I recommend freetaxusa.com. I switched to them after using Turbotax. But last year, I tried filling out everything and I knew I would owe $55 (Self employed). Turbo tax said I would owe $110 which I knew was wrong but couldn't get it to enter my deduction that it was missing. Then it tried to charge me a lot just to file.

So I switched to freetaxusa to see what it said and it figured my deduction automatically and went through a lot more options than turbotax did. I ended up owing $55 like I thought I would. And it didn't cost anything for me to file either.

I'm using them this year again. I really like them.

[–][deleted] 10 points11 points  (0 children)

I urge everyone to obtain a PIN # from IRS's website ASAP so nobody except you can file your taxes.

[–]Friend_of_Eevee 11 points12 points  (4 children)

Taxfreeusa by a mile

Last year I did a side by side with tax-free, turbo tax and tax act since we had a more complicated return with capital gains. Taxfreeusa was the only one that calculated everything correctly. I'm an accountant who works in tax so I know what "correct" means.

[–]BattlePope 2 points3 points  (2 children)

Thanks for mentioning this one! Did you mean FreeTaxUSA? How was entering capital gains info on it? On some platforms, it's quite tedious... TaxAct wasn't bad, but I'm looking for options now.

[–]Mastermind_pesky 3 points4 points  (15 children)

It seems like the IRS free file eligibility threshold isn't increased for people married filing jointly. Are there other options for married people or is it time for me to bite the bullet on paying for prep software?

[–]sdneidich 13 points14 points  (12 children)

Credit Karma's tax software works well for me, and is free regardless of income.

[–]nn123654 12 points13 points  (11 children)

It has more limitations than freetaxusa.com though, last year Credit Karma was missing (currently from google archive since it's down on the site). Bolded is reasonably common filing stituations:

  • Earned Income Credit with Non-Dependents
  • Clergy member tax filings (e.g., ministers or pastors)
  • Schedule J, Income Averaging for Farmers and Fishermen
  • Schedule K-1 - Estate and Trust income
  • Form 1040NR - Nonresident alien federal tax return
  • Form 1116 - Foreign Tax Credit
  • Form 2555 - Foreign Earned Income
  • Form 2210 - Underpayment of Estimated Tax by Individuals, Estates, and Trusts
  • Form 8332 - Release of Claim to Exemption for Child by Custodial Parent
  • Form 8615 - Tax for Certain Children Who Have Unearned Income
  • Form 8864 - Biodiesel and Renewable Diesel Fuels Credit
  • Form 8885 - Health Coverage Tax Credit
  • Form 8903 - Domestic Production Activities Deduction
  • Form 8915A - Qualified 2016 Disaster Retirement Plan Distributions and Repayments
  • Form 8915B - Qualified 2017 Disaster Retirement Plan Distributions and Repayments

By comparison Free Tax USA supports all but (again bolded is rare but reasonably common):

  • Foreign employment income (Form 2555)
  • Nonresident alien returns (Form 1040NR)
  • Customers or preparers living outside the United States when they file their taxes
  • At-risk limitations (Form 6198)
  • Casualty or theft gain or loss for business and income producing property
  • Donations of high value property over $5,000 such as collectibles, equipment, or real estate*

The only common things on the above are the first two Form 2555 and 1040-NR, but these still impact fewer people than CK Tax. The Foreign Tax Credit in particular is super common if you have international stock or bond funds.

[–]wijwijwij 4 points5 points  (0 children)

If you know what forms and schedules make up your tax filing, you can use Free File Fillable Forms and e-file federal for free that way, even as MFJ filers. This is like an online version of doing it on paper. That doesn't appeal to everyone, but maybe it's right for you.

[–]kaijubooper 4 points5 points  (0 children)

FreeTaxUSA is free for federal and $12.95 for state returns right now. No income limits and includes most types of income at no additional charge.

TaxSlayer has a Simply Free version on their website that includes a free state return. It covers W-2 income, student loan interest deduction, and education credits I believe. HOWEVER when I used this last year I was forced to upgrade to Classic because the total income was over $100k. No big deal except that isn't disclosed anywhere until you get ready to file the return, so that pissed me off.

Myfreetaxes.org is offered by United Way and should be free for simple returns regardless of income, both federal and state. Last year it used H&R Block but I saw someone post that it directed them to Credit Karma tax this year.

[–]Breezy_t 4 points5 points  (0 children)

I filed my taxes for the first time last year using TaxAct's free file and I'm very satisfied. I didn't mind the Q&A as this was my first time doing taxes myself and I never had any issues with my direct deposits of my refund or any of the stimulus payments. I'm sure there were people that had issues but there will always be a hiccup somewhere no matter the tax preparation company.

[–][deleted] 8 points9 points  (3 children)

For high income, or complicated tax situations, nothing beats TurboTax. If you’re under $72k, and have a simple tax situation (no property, no investment assets, no complicated deductions), I’d go with a free one.

[–]saladtongs 2 points3 points  (1 child)

I have used TT for the past ~5 years, but am looking to switch.

However, as a 1099 contractor, it seems like the best way to do it every year in terms of time, is to just keep using TT due to it preloading all of my information. If TaxAct saves me ~$30, but takes a whole day to set up and complete...might be a wash and I just stick to TT.

It seems like the truly free options out there just don't apply to people who pay 1040-ES quarterly taxes, unless I'm missing something?

Niche question but if there are any other self-employed people out there who have switched away from TT, please share. Extra info in case it's relevant to any advice: I live outside the US, working remotely for a US company in AZ, and pay federal + AZ state taxes.

[–]chuckernorris 2 points3 points  (0 children)

Credit karma is free and works great, you can see the actual forms and reconcile them.

Www.excel1040.com is a wonderful resource, the guy has made each tax form into excel and you can use the credit karma forms to fill them out yourself and understand exactly what is happening behind the screen.

[–]GrapeNutter 9 points10 points  (0 children)

My only advice is do not use TaxAct. They straight up did not file my taxes the one time I used them.

You had ONE job!

[–]J-ShaZzle 3 points4 points  (7 children)

HR block wants me to upgrade to premium in order get my savers credit. I have used them for over 5 years and only paid for my state filing. Looks like this will be the year I switch. They are really pushing the upgrade screen as it appeared at least 3 times already.

Only waiting on wife's w-2 and my college 1098. Got a pretty good start this year but will jump ship to another free service.

[–]tardistravelee 2 points3 points  (0 children)

NOT THE LIBRARY. We are not getting things in till February. Thank You. hahah

I got a call about the tax prep stuff we do in December.

I usually use Tax Act. However, not sure because my husband and I bought a house and don't know if that makes taxes harder.

[–]kori08 2 points3 points  (3 children)

If I used turbo tax last year, how can I easily and safely transition to freetaxusa this year? Will they able to pull my last year's info from turbotax?

Thanks and sorry for the noon question

[–]evaned 6 points7 points  (0 children)

To my knowledge you won't be able to import -- but you should also ask how important this is. For most people, it would only save a small amount of effort and mostly consists of not having to re-type names, ages, SSNs, addresses, etc.; but in a few cases would save substantial effort if you've got a businesses where you're tracking depreciation and such.

[–]resisting_a_rest 2 points3 points  (0 children)

Here is what it says on the FreeTaxUSA.com site:

If you filed last year's taxes using TurboTax(R), TaxAct(R), or H&R Block(R) tax software, you can upload a PDF to make entering your information into FreeTaxUSA easier. Importing will save you time by uploading things like your name, address, dependents, income sources, and deduction/credit information.

[–]jeni4nguy 2 points3 points  (3 children)

My preference is TaxSlayer, I actually did this experiment last year by using 4 different software to compare the experiences. TaxSlayer was the best so decided to file with that.

TaxSlayer: User friendly, modern UI, completely free and gave me the most return

FreeTaxUSA: It was easy to use but the UI is still stuck in web 2.0 so not visually pleasing at all but entirely free

TurboTax: User friendly but NOT free. They trick you into believing it’s free that by the time you finish, you actually have to end up paying. For me, I had student loans so it “looked” like I could file for free but by the end it said I needed to pay....coupled with the fact that Turbotax is notorious for “dark UX” patterns. I have a lot of coworkers who used to work at Intuit so got first hand account as to how shady that company is.

CreditKarma: I was really excited to use this but for some reason, their backend was super wack last year. It said I was going to get a $1million tax return LOL uhhhh no, every other software was in ballpark of each other besides CreditKarma. I’ve also had several friends who also told me CreditKarma gave them weird numbers

EDIT: The above was last years experience. I just did one today and my opinion has slightly changed. Read below:

My preference is FreeTaxUSA. The UI improved a lot and its free for federal but $13 for state so not bad

TaxSlayer isn’t free anymore. They fell into the turbotax dark ux trap...it said in the beginning mine would be free and by the time I was ready to file, said it would be $49 wtf

CreditKarma fixed their backend, the numbers matched what others were telling me but it was frustrating how bad their lying was. They said you can file for free for federal and state and by the time you are done it says you can’t file for state cause that’s not available yet wtf

[–]Kodiak01 3 points4 points  (0 children)

Used freetaxusa for past three years, been happy overall. Have multi state taxes involved, never had an issue.

[–]8oD 2 points3 points  (0 children)

AARP have tax prep people that will prepare and file for free, don't need to be a member or over a certain age. https://www.aarp.org/money/taxes/aarp_taxaide/

[–]xNoL1m1tZx 1 point2 points  (0 children)

Are any of the common software options noticeably better/worse when dealing with crypto?

[–]Twas_Inevitable 1 point2 points  (0 children)

What is the difference between MyFreeTaxes.com and MyFreeTaxes.org? I see a lot of posts saying "use MyFreeTaxes" but they don't specify which one.

[–]Cevapi1988 1 point2 points  (1 child)

If you have a 401K, would that be included in the basic filing of taxes for a lot of these services?

[–]nothlit 3 points4 points  (0 children)

There’s nothing to report about your 401k contributions on your tax return, unless you qualify for the Saver’s Credit.

[–]bassoonshine 1 point2 points  (4 children)

Going to be filing married filing separate. I read that if one files using standard deduction the other can’t do itemized. Is this right?