Who is free tax filing right for?
Taxpayers who file Form 1040 only are ideal candidates for free tax filing. Those with more complex tax returns are better off using tax prep software designed to walk them through the entire process. Here’s a breakdown of the types of taxpayers who can take advantage of most free-file offers:
- W-2 income to declare only
- Claim the standard deduction (rather than itemizing)
- Claim the Earned Income Tax Credit (EITC)
- Claim Child Tax Credit
- Have limited interest and investment income
- Have student loan interest to deduct
Here’s an idea of the kind of taxpayer who is unlikely to qualify for most free tax prep offers:
- Itemize deductions
- Have business or 1099-NEC income
- Rental property income
- Stock sales
- Unemployment income
- Credits, deductions, and income reported on schedules 1-3 (although Cash App Taxes and H&R Block free file versions accommodate filers with these schedules)
Features of the best free tax software
In compiling this list, we looked for tax software with the following characteristics:
- Easy-to-use interface
- Access to a tax professional when needed
- Strong customer support
- Free file fillable forms
- Audit support
- Free filing of both a federal and state return
Are there hidden costs with free tax filing?
It’s important to know that you may run into fees if you need assistance. For example, if a problem arises and you need a tax professional to walk you through, there may be a fee involved.
Most tax preparation programs allow you to begin your taxes for free and it’s only when you’re deep into the return you learn you’ll need to upgrade to a different program. If you go into tax preparation without knowing which type of return works best for you, you could be disappointed by having to spend more money than planned to complete your taxes.
When paying for tax filing services makes sense
While a free file program makes sense under some circumstances, it’s not right for everyone. If you’re not sure which way to go this tax season, ask yourself the following:
How has my life changed over the past year?
If you’ve had a child, purchased a home, retired, or experienced any other life change, it may be time to upgrade to tax prep software that can better accommodate your needs.
What’s going on in my home?
If you’ve started a home business, even a small side hustle, paying for tax prep software will probably help you find hidden deductions.
What’s my adjusted gross income?
If you have a relatively high adjusted gross income, you may have enough deductions to benefit from itemizing your tax return – a task that will require paid tax prep software.
How do I make money?
How you make money matters. For example, anyone who owns rental property needs a more comprehensive tax return than free tax prep software provides.
How do I feel about completing my own tax return?
Even the best free tax filing software might not ease your tax filing fears. If the idea of doing your own taxes, even with a tax professional walking you through, is enough to make you break out in hives, it may be worth it to pay for full-service tax preparation. Your only job is to upload the documents needed for a tax expert to properly complete your return.
If you’re eligible to file a tax return for free, taking advantage of the opportunity means leaving more in your bank account.
Conclusion: So above is the Best Free Tax Software for October 2023 article. Hopefully with this article you can help you in life, always follow and read our good articles on the website: W Tài Liệu