Here comes tax time for that huge group of Americans who wait until the proverbial last minute to file their income taxes. For them, crunch time is approaching and they need to find all of those tax receipts and records that they will need in order to file Federal Income Taxes. Fortunately, one of the best tax tricks for 2014 is getting free tax preparation software. The best part is that there is no real downside as long as you are smart and keep an eye out for optional add-ons, upgrades, and online tax filing options that might shatter your free tax software deals.
Many of the deals websites out there (check out Slickdeals.net and Gottadeal.com as well as Dealnews.com for starters) will notify you when companies like Intuit offer free online TurboTax applications for users who show up within a certain time frame. The HR Block guys similarly offer free TaxCut software signups from time to time.
If you are wondering what the catch is, because obviously these companies can’t make money by giving their programs away online, then good for you. The first step to avoid being a sucker who gets scammed is to be aware of what makes sense, what motivates people and companies, and trying to see the find print.
In this case, the fine print comes in the form of add-on offers. Depending on which deal on tax software you get, it might be free to input all the data and print the return, but there is a charge to e-file. Another strategy is to offer free Federal Income Tax preparation and free e-file, but to charge for doing your state income tax return. Unless you live in New York, California, or another state with complicated state income taxes, chances are your state return is pretty easy to do by yourself. Of course, there is always the “subscription” trap, where you think you are getting something for free, but are actually signing up for a $99.95 annual subscription to something. Just make sure you don’t enter a credit card number and you should be OK.
These sites also require registration and while these are legitimate companies that don’t benefit from spam or overly aggressive marketing, you can be sure they’ll be in touch sooner or later.
In Colorado, for example, the State of Colorado offers every resident free online e-filing of their state income taxes. For 90% of residents, all that you need to do is plug in a handful of numbers from your completed IRS Form 1040 tax return (they even tell you which line numbers to use) and then hit submit. (There is more to it for certain circumstances like partial-year residents, land income, and so on.) In other words, you would be a fool to buy TurboTax State edition if you live in Colorado.
If you don’t want to watch the deal websites (which is really the easiest way) you can also pop onto the main product webpages at turbotax.com and taxcut.com and see if they are running a public deal. However, you might have to dig around a little bit. After all, these companies don’t want to offer free software to someone who is coming there to buy it!