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I usually file our 1040 with TurboTax which is not free. I just found out about the IRS's free file.
I'm going to try it, but are there any catches or problems I should look out for?
There's more than one "free" filing option offered by the IRS. First, make sure you're actually on the IRS web page. Check the link suffix. It should read dotgov, not dotcom. There are dotcoms claiming to be IRS sites that steer you into paid services.
Understand which "free" IRS option you're using.
Guided tax software (plug and play...it tells you what to do and does the math) has an income limit.
"Free fillable forms" requires you to do more of the work. You supply financial information in order to fill out the forms but it will do most (but not all) the math. If your tax situation is simple it isn't hard, but the program won't do everything or guide you while doing it. You need to read various form instructions for yourself.
FWIW, I've used the Free fillable forms option for years. Doesn't cost a cent to complete and submit anything.
The free tax software like FreeTaxUSA,TaxAct, and others will guide you throught the process and do calculations for unfriendly things like the AMT, qualified dividends calculations, social security taxable amount and so on. But they have income limitations.
Free Fillable Forms has no income limitations, but only does basic arithmetic.
As I understand it, the Free Fillable Forms is not held on IRS servers, but rather is done by the Free File Alliance LLC, whoever that is. I think it's the same people who offer the free tax software, but I dunno for sure.
It's not really a catch nor a bad thing, maybe even a good thing, but the Free Fillable Forms file is deleted every year so you can't go back and see them online.
So you'll have to print out a copy, and/or save the PDF's, which you would probably do anyway.
The other free software options like FreeTaxUSA,TaxAct, etc will keep your tax forms and if you use them next year they transfer your old info (name, filing status, etc) to the next years form and provide a side-by side compare between the years. That may also be a bad thing because they keep your info, and maybe someday one of them will get hacked.
Most of the free tax software people make their money by charging like $20 to do the state tax form and file that electronically for you if you want that service. Some are free even for state if you make less than like $45,000. In my state there's no way to file electronically other than going through one of the tax prep software people. The very quick turnaround time and not wondering if the mail got delivered makes the $20 worthwhile it to me.
Free Fillable Forms does nothing for your state taxes.
My mom got a pension amount and on the 1099R it says taxable amount is unknown.
When entering this into FreeTax I tried to leave the taxable amount blank but it says "the taxable amount is usually the same amount as the gross."
But that certainly wasn't true last year. The taxable amount from this was about 1/4 the gross amount.
There is a complicated worksheet in the 1040 book and I may have to use it. But I didn't have to use it last year with TurboTax. Is this just a shortcoming of FreeTax?
I usually file our 1040 with TurboTax which is not free. I just found out about the IRS's free file.
I'm going to try it, but are there any catches or problems I should look out for?
California also has something for state taxes.
Filing uses to be with a fee. now that is going away.
There is new "free" tax software if your form isn't complicated. If you just do wages & use standard deduction could be easy. If you have investments gets complicated. THe more forms & schedules you have to go with the 1040.
You know that worksheet you use to calculate taxable social security, it's filled in in Freetax but the worksheet for pensions is not filled in. I wonder why.
You know that worksheet you use to calculate taxable social security, it's filled in in Freetax but the worksheet for pensions is not filled in. I wonder why.
Location: IN>Germany>ND>OH>TX>CA>Currently NoVa and a Vacation Lake House in PA
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It cost me $72 to file using H&R Block's online software this year. It's truly a bargain. That included itemized deductions, a 1099-R form, and Virginia state taxes too.
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