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People who are looking for a deal to prepare taxes online, who are looking for a deal themselves, see a lot of promotions.

It’s a marketing battle for tax free deals online between some of the big names. But you’ll need to review the restrictions and rules to see which deal actually saves you money and what doesn’t.

For example, Gig workers or the self-employed often don’t qualify for free services and can be directed to more expensive online options at places like TurboTax, H&R Block, and TaxAct.

Meanwhile, Jackson Hewitt raises his hands, drops all the “free” offers and charges one flat price for all in the name of simplicity.

$25 flat rate

Jackson Hewitt Tax Services offers a flat rate of $25 if you pay your taxes — federal and state — online. The fee covers both state and federal, and as many state revenue as needed. If you need to file multiple state returns, you’ll still pay one flat fee.

The rate is nearly halved for many taxpayers who file a federal and state return.

A year ago, Jackson Hewitt charged $25 in federal revenue plus another $24 in state revenue. The $49 price tag covered as many state revenue as necessary.

Since inflation has made many consumers fear higher prices in the future, Jackson Hewitt Online is promoting a three-year, $25 price lock for all customers who submit their 2021 files to the company.

File this year for $25 and you’ll be able to pay $25 at Jackson Hewitt Online and file a return for 2022 next year. And you can do the same for $25 when you file a 2023 return in 2024.

Going for one flat rate gives consumers reassurance that they won’t be charged more than expected, said Zach Cohen, head of digital products at Jackson Hewitt.

“Really, the online tax preparation marketplace tried to misrepresent the pricing,” he said. “But taxation is not a game.”

Anyone who does a quick Internet search for an online tax file will see that nearly every listing says “free,” Cohen said.

“However, very limited online filers actually get free tax preparation,” Cohen told me in a phone interview.

“Companies stream for free up front but then force people to upgrade as they go deeper into the tax preparation process.”

Cohen said the actual price for some consumers who use the Internet to use the software to set up their own taxes could end up being $75 to $125 or more.

“It’s ridiculous,” Cohen said. And we decided to take a stand.”

While many may be happy with the low price guarantee, some who once benefited from Jackson Hewitt’s free tax software services may not be happy with the standard rates.

Cohen said the company’s research has found that a very limited subset of people actually qualify for free. But he acknowledged that if people really qualify for free, they should use a service that allows them to set up and submit returns for free.

Before taking such a step, he said, the taxpayer needs to consider that their tax file may become more complex in the near future — such as returns involving online brokerage accounts, first home, and independent income.

“And this is very likely to lead to their promotion to a paid category” at other companies, he said.

Jackson Hewitt Online assures that the $25 price guarantee for online tax preparations in the coming years is a better option for many consumers.

“In our experience, people understand that tax preparation programs have value and are willing to pay reasonable prices for it,” Cohen said.

There is the convenience factor of working with the same company or the same brand of online software.

Free is still there

Jackson Hewitt’s pricing conflicts with some marketing campaigns that pay for free services. The big names – including TurboTax, H&R Block, and TaxAct – continue to offer some free online services.

TurboTax has announced a new offer called “$0 Anyway,” which the company said will apply to about 60 million simple tax return filings. There are no restrictions on income.

The company said last tax season, more than 17 million people filed their taxes through TurboTax and paid nothing, which was more people in any year in the company’s history.

This year, TurboTax said it’s expanding its free offering, allowing filers with minimal revenue to offer files completely free of charge using its various services.

TurboTax said it gives low-income taxpayers the option to do their taxes themselves, get help from a tax expert along the way, or have it delivered to a dedicated tax expert to do their taxes for them, for $0.

Guides have a February 15 deadline to use TurboTax Live Full Service Basic to offer a simple return for free. This product allows you to turn in your entire return to a tax expert.

Taxpayers who use TurboTax Live Basic to file a simple return will pay nothing if they place the order until March 31. This product offers tax expert help along the way.

The free TurboTax edition is available all season.

Who has a small return? According to TurboTax, the taxpayer only files a Form 1040. TurboTax Free Edition, TurboTax Live Basic, and TurboTax Live Full Service Basic help tax candidates whose tax statuses can include W-2 income, limited interest and dividend income, and choose to take the Standard Deduction, as well as those claiming the Earned Income Tax Credit, and the Child Tax Credit Student loan interest reporting.

What are some limitations?

Before you assume that you’ll be able to file your tax return for free, check the restrictions that apply online.

Oftentimes, you won’t be able to use free online tax software if you sell stock, sell your home, have mortgage interest, pay property taxes, or have independent income.

TurboTax says that situations not covered by TurboTax Free Edition, TurboTax Live Basic, and TurboTax Live Full Service Basic include returns opting for itemized deductions, reporting unemployment income reported on a 1099-G, business report or 1099-NEC income, including Stock sales, rental property income and credits, and report discounts and income are included in Tables 1-3.

If you own a small business, for example, TurboTax will recommend their service for “freelancers” at $119. A state return filing costs an additional $49 per state. The Self-Employed Program searches for over 500 debits and credits.

Some offers may work better for one person than another.

H&R Block is announcing this season on TV that more people can sign up for free with them than TurboTax.

H&R Block told the Free Press that it does offer a few more forms under its TurboTax free filing offerings, including unemployment income on Form 1099-G, education credits on Form 8863, tuition payment of Form 1098-T, and Form 8615 that includes The tax for children with an income investment of more than $1,900, the adoption of a Schedule R for the elderly or disabled, Form 1099-G for certain government payments, and Form 8915-F for the eligible distribution and payment of the 2021 Disaster Retirement Plan.

Taxpayers need to review their tax situations and forms, as they try to find the best free services as well.

IRS.gov’s “Free Files” system remains an option for many people, and again it won’t work for everyone. You will have to choose a tax software provider that participates in the system and will provide services to those in your case. The IRS said 70% of applicants in the country are eligible for a free file.

If your adjusted gross income is $73,000 or less in 2021, you can use free tax software to prepare your tax return and submit it electronically to the IRS. Government.

Taxing isn’t really fun, but saving more money along the way in tax preparation can ease some of the pain.

(Susan Tompor is a personal finance columnist for the Detroit Free Press. She can be contacted at stompor@freepress.com.)

© 2022 Detroit Free Press. Distributed by Tribune Content Agency, LLC.

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