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“Free” Tax Prep?

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You have likely seen or heard advertisements on billboard, TV or radio for “free tax filing” of 1040EZ returns this season from certain tax preparation companies. 

 

Beware! We think it's important to know exactly what this means to avoid unanticipated tax preparation costs and fees associated with financial products that promise fast refunds, such as Refund Anticipation Checks.

 

Below is a list of things to know about tax preparers who offer “free” preparation of 1040EZ forms:

  • 1040EZ forms are for taxpayers who meet the following criteria: filing status of single or married filing jointly, no dependents, claiming a standard deduction and have no mortgage payments. Last year, only 16% of their customers were eligible for the free preparation of 1040EZs.
  • The 1040EZ is for federal taxes only; taxpayers still pay for their state return to be completed as well as any other forms (for claiming credits or certain types of interest or expenses). Some states allow taxpayers to file their state returns online for free, but this is not part of the free service you receive. .
  • Additional fees usually apply to those claiming the Earned Income Tax Credit (EITC). Most people who claim the EITC do not qualify for the 1040EZ form.

 

For more information on this topic or other tax news, contact any of our Tax Forward representatives in Carrington, Jamestown and Fargo.

 

Disclosure:
This advice is for general information purposes only and may not apply to you. Every tax situation is different. This is not intended to be legal advice. Taxpayers should consult a Tax Forward representative regarding their individual tax situation.

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Guest Friday, 19 September 2014

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