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Tax filings and payments are due by Tuesday, April 18, 2023. That day is just around the corner, and tax preparation takes time and careful attention. Understanding the tools available to you is important, too.
Using a tax preparation service or a professional tax preparer is great if you can afford it. But many people are unaware that there are free tax software options available online.
No matter how you file taxes, there is free tax software on the market that can help you get it done quickly and efficiently. Here is a look at some of the free tax software options that could help you during tax season.
It may seem odd at first to list Credit Karma as one of the best free tax software since most folks associate them with free credit scores. But it is true: Credit Karma offers a free, online tax preparation program now called Cash App Taxes. To start, you must download the app.
Unlike other free tax filing software that may charge for state returns or certain deductions, Cash App claims there are no restrictions. You can file state or federal taxes for free regardless of the deductions or credits you choose.
Credit Karma/Cash App Taxes Advantages
TaxSlayer is not new to the tax filing game. Their paid versions are a top-notch option for tax filers with both simple and complex tax situations. But, if you are a simple tax filer, TaxSlayer's free edition, TaxSlayer Simply Free, will work just as well as the paid version.
TaxSlayer Simply Free allows users to file federal income tax andstate tax returns for free. However, the service is only offered to those with the simplest tax returns, such as W-2 income filers. If your tax situation meets the following the free service could be for you:
Tax situations not covered would include:
TaxSlayer Simply Free advantages
H&R Block has been a trusted brand in tax preparation service for a long time and its free tax filing option is a popular choice among simple tax filers and first-time tax filers. The H&R Block help center is available to guide those through the process.
H&R Block offers free federal income tax and state tax returns and supports many of the common forms and schedules, such as Form 1040, Form 1098-T (tuition payment), and even Schedule EIC -- Earned Income Credit. The free service is open to those in the following situations:
Those who contribute to health savings accounts (HSAs), have itemized deductions, or are Schedule C (Self-employed) are not eligible for the free service and must upgrade to a paid tier of service.
H&R Block Free Online advantages
TurboTax is one of the top services for tax filing. Its free service brings the same expertise that has built a reputation in the industry. Those with W-2s and other simple tax returns will enjoy all it has to offer.
Free federal income tax and state tax returns are available and TurboTax Free Edition supports many of the important, commonly filed forms and schedules:
Certain forms and schedules associated with more complicated returns, such as Schedule SE (Self-employed), Schedule D (Capital gains and losses), and educational forms, such as 1098-E and T (Student loan interest and tuition statement) require a paid tier.
TurboTax Free Edition advantages
TaxACT offers free federal tax filing for a wide range of individuals such as filers claiming dependents, unemployment income, college expenses, or retirement income. It's one of the services approved for free tax filing by the IRS. To qualify for the service, you'll need to be 56 years old or younger with an adjusted gross income of less than $65,000, or military personnel with an income under $73,000.
In addition to complementary federal filing, TaxACT provides free state tax returns for: AR, AZ, GA, IA, ID, IN, KY, MA, MI, MN, MO, MS, MT, NC, ND, NH, NY, OR, RI, SC, VA, VT, and WV.
Using TaxACT is fairly simple. You can manually import your information or import PDF files from other services such as H&R Block or TurboTax. There's a glossary with over 300 terms in addition to TaxAct Alerts that ensure accuracy to help you avoid an audit. TaxACT guarantees your return is correct for up to $100,000. And although it's free, you can access your returns for up to seven years.
TaxACT Free Edition Advantages
There are really only three options when it comes to filing taxes:
The IRS offers free filing depending on your income amount. Incomes of $73,000 or less are eligible for free federal tax filing with an IRS partner site.
You can file your tax return as early as January 24 this year. The sooner you file, the sooner you can receive your refund (if you're due one). Numerous tax preparation services and professional tax preparers stand ready to help during this tax season. Of course, these services often come with a fee depending on the tax situation. Complicated tax filers dealing with less common forms and schedules will benefit the most from professional services.
The new tax filing extension deadline is quickly approaching. For those with common, less complicated tax filings, such as W-2 employees, the process can be more simple and even free. Many of the top-tier tax preparation services offer free editions for simple tax filers who qualify, bringing their expertise at no cost to you.
Regardless of whether you file yourself using online tax software or a tax professional, you still have to do most of the legwork to get organized. You can make tax filing easier by getting organized in advance in a few ways:
Find and review the previous year's tax return: Last year's tax return can be a good starting point to determine what type of deductions you took and what figures and documents you may need to collect for the current year.
Save and categorize your receipts: If you plan on taking deductions for specific categories such as medical or work-related expenses, keep your receipts organized by categories such as uniforms, dry cleaning, prescription drugs, and more.
Download your tax forms: You could always wait to receive your 1099s in the mail or you can download them for free from the financial institution issuing them. Some of the most common 1099s you may receive are for your investments and for interest earned through your bank or credit union.
Most tax services offer a limited free version for simple tax filings without too many credits or deductions. In many cases, the service only offers free federal taxes and state taxes have an additional fee. Freelancers or individuals with significant investments may also need to pay a fee for more complex tax filing.
Cash App Tax, formerly Credit Karma Tax, offers free tax filing for the widest range of situations, credits and deductions.
Most online tax software gives you the option to make changes to a tax return if you've missed something or filed incorrectly. You'll need to log in to the platform and search for the option to amend the tax return. In some cases, you may need to reach out to customer service for help in filing an amended return.
The fastest way to get a tax refund is by filing online and selecting direct deposit as the refund method. The process will take less than three weeks and you won't have to worry about the check getting lost in the mail. If you choose to mail in a tax return, a refund can take six to eight weeks after it's received by the IRS.