money The 4 best services for doing your taxes online for free
It’s April 15, and normally that means it’s Tax Day here in the U.S. But with the coronavirus pandemic still wreaking havoc on American’s lives and livelihoods, the Internal Revenue Service (IRS) has once again extended the annual deadline for filing.
This time, you’ve got until May 17 to submit your individual taxes, and make sure you avoid any unnecessary run-ins with the agency. If you’re filing the old fashioned way with pen and paper, well, best of luck to you. I tried doing that as part of a story a few years ago, and thought I was getting back more than $10,000 before I realized I misplaced a decimal point and only got $200.
My advice, if your taxes are relatively simple, meaning you didn’t buy or sell property, aren’t self-employed, and don’t run a Fortune 500 company, your best bet is use some basic consumer tax software. And these are some of the best.
H&R Block — Free
Features:
Free individual federal and state filing
Can file for Earned Income Tax Credit
Includes student loan deduction
Missing:
No mortgage interest or property tax deductions
No itemized deductions
H&R Block (HRB) is one of the most popular sources for tax help in the country. But you don’t have to rely on the company’s in-person tax service to file your taxes. Instead, you can go online and take advantage of H&R Block’s free offering, which includes federal and state taxes. Students will be especially happy to know that the free version of the service includes deductions for student loan interest.
If you’re a homeowner or need to account for a health savings account, though, you’re going to need to upgrade to H&R Block Deluxe for $49. And if you’re looking for on-demand help from a tax professional, you’re going to need to upgrade to the company’s H&R Block Premium offering. The downside is that you’ll have to pay an additional $44 for your state tax filing.
TurboTax — Free
Features:
Free individual federal and state filing
Includes filing with unemployment income
Can file for Earned Income Tax Credit
Missing:
No student loan deduction
No mortgage interest or property tax deductions
No itemized deductions
TurboTax (INTU) was the first tax software I used after realizing that a single person renting an apartment with one job didn’t need to pay $300 for a professional to do his taxes. The service is incredibly straightforward and makes doing your taxes a relative breeze. I say relative, because no matter how I do my taxes, I’m always afraid that the IRS will somehow find a reason to audit me and throw me in the slammer.
While TurboTax’s free edition should work for most people, I always end up upgrading to the Deluxe edition for $60, because it provides one-on-one help from tax professionals. And if you have student loans or are a homeowner, you’ll need to upgrade to the Deluxe version to deduct student loans or mortgage interest.
Like H&R Block, TurboTax’s Deluxe option includes an additional fee for state filings. In this case, it’s $50.
TaxSlayer — Free
Features:
Free individual federal and state filings
Includes student loan deduction
Includes filing with unemployment income
Missing:
No mortgage interest or property tax deductions
No itemized deductions
Limited to customers earning less than $100,000 a year
TaxSlayer is among the most recognizable tax services out there, and for good reason. It provides many of the same features as its competitors, and tosses in student loan deductions in the free version. But the company limits using that edition to customers earning less than $100,000 a year.
If you don’t qualify for that, you’ll need to upgrade to TaxSlayer Classic for $24, and pay an extra $39 to file your state taxes. Still, that’s not a bad price compared to the company’s competitors.
IRS free filing
Here’s a little secret you might not know about. The IRS has a program that lets you file your taxes for free if your adjusted gross income was $72,000 or less. The offering includes partnerships with a host of tax prep services including those listed above, but there are limits.
Most of the services cap the amount you can make in a year to access their offerings, and some don’t include free state filing. A number of the services are also limited to specific age groups. FileYourTaxes.com’s free IRS filing program, for instance, is only available to filers 65 and younger.
Regardless of which online filing software you choose, be sure to double check all of your information before clicking that submit button, and if your return looks suspiciously high or low, you might want to reach out to your selected service’s help department.
After all, you don’t want to deal with a filing error just because you rushed.
Sign up for Yahoo Finance Tech newsletter
Got a tip? Email Daniel Howley at dhowley@yahoofinance.com over via encrypted mail at danielphowley@protonmail.com, and follow him on Twitter at @DanielHowley.
More from Dan:
Amazon Prime now has 200 million members, jumping 50 million in a year
Microsoft is updating its MacBook Air competitor for the work from home age
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit. Find live stock market quotes and the latest business and finance newsFor tutorials and information on investing and trading stocks, check out Cashay.
