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Trying to determine ahead of next year's filing season if I can use TT Basic or Free Filing options

For the past few years TT Deluxe has said that I should use the standard deduction. How can I determine this on my own so that I do not waste money using TT Deluxe instead of TT Basic or even a free filing option? I have medical expenses (doctor/dental visits, labs, shots, medications, medical/dental insurance premiums, mileage, etc.), mortgage interest, charitable contributions, etc, but it never seems to be enough to outweigh the standard deduction (married, filing jointly). How can I figure this out before hand to see if I can make my tax filing easier?

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3 Replies

Trying to determine ahead of next year's filing season if I can use TT Basic or Free Filing options

If you enter itemized deductions like medical expenses and mortgage interest or property tax, you cannot use the Free Edition, nor can you use the Free Edition if you have self-employment income. If you enter itemized deductions using online TurboTax you must upgrade to Deluxe or higher.    If you have self-employment income, you have to prepare a Schedule C for your business expenses----in order to do that, you need either online Premier or any version of the CD/download software.

 

 

WHY DO I HAVE TO PAY?  I WANT THE FREE EDITION

 

The information that you can enter in Free Edition is pretty limited now.  Thanks to the new tax laws that began for 2018 returns, there are no more simple Form 1040EZ or 1040A's.  Everything goes on a Form 1040 that has three extra "schedules" with it, and if you need any of those schedules, you are not able to use the Free Edition.  Using the standard deduction instead of itemizing does NOT mean you will not need any of those schedules.https://ttlc.intuit.com/questions/4511011-what-happened-to-the-1040a-and-1040ez   If you started in the Free Edition and entered any data that required any of those three schedules, you have to upgrade to a paid version and if you are watching the screens carefully you are alerted to the upgrade.

 

 

When you chose to “start”  in the Free Edition —

Directly below the words “Free Edition” there is a blue link that says “For simple tax returns only”   If you click that link it brings up this information:

 

 

You can file with TurboTax Free Edition if you have a simple tax return.*

*A simple tax return is Form 1040 only.

Situations covered in TurboTax Free Edition include:

  • W-2 income
  • Limited interest and dividend income reported on a 1099-INT or 1099-DIV
  • Claiming the standard deduction
  • Earned Income Tax Credit (EIC)
  • Child tax credits
  • Student Loan Interest deduction

Situations not covered in TurboTax Free Edition include:

  • Itemized deductions
  • Unemployment income reported on a 1099-G
  • Business or 1099-NEC income
  • Stock sales
  • Rental property income
  • Credits, deductions and income reported on schedules 1-3

 

How does TurboTax make any money?

Customers with more complex tax situations will file with our paid TurboTax products that provide all the additional forms and guidance they need. We also offer additional benefits that go beyond filing your taxes, but they are optional and are not required to file simple taxes for free. We hope that, over time, as our customers with simple returns need more capabilities as their financial situations change (for example owning a home, having a child, managing investments), they have loved our products and services so much that they will choose our paid TurboTax offerings to prepare and file their returns.

 

 

 

Or—-Use this IRS site for other ways to file for free.  There are 8  free software versions available from the IRS Free File site

 

https://apps.irs.gov/app/freeFile/

 

Or—if you live in certain states you may be eligible to use the new IRS Direct File

 

( AZ, CA, FL, MA, NH, NV, NY, SD, TN, TX, WA, WY )

 

https://directfile.irs.gov/

 

 

 

How can I see my TurboTax  fees? 

 

  https://ttlc.intuit.com/questions/2565973-how-do-i-review-my-fees-in-turbotax-online

 

If your TurboTax fees are higher than expected, you can reduce them by removing add-ons     (BEFORE you e-file) :

 

 

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. (Only the amount that is MORE than 7.5% of your AGI counts)   The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

 

Your standard deduction lowers your taxable income. The standard deduction makes some of your income “tax free.”  It is not a refund. 

 

2024 STANDARD DEDUCTION AMOUNTS

 

SINGLE $14,600    (65 or older/legally blind + $1850)

MARRIED FILING SEPARATELY $14,600    (65 or older/legally blind + $1500)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1500)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1850)

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Trying to determine ahead of next year's filing season if I can use TT Basic or Free Filing options

@snoblack 

AND, if you do continue to use the desktop software (You have been using desktop haven't you?)......

 

IF you need a state software set, then BASIC desktop does not include a free state software set, and adding a state to it ends up costing more (usually) than desktop Deluxe with the free state software set.

 

The Online Deluxe or Premium versions do not include any state software, that's always extra.

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Trying to determine ahead of next year's filing season if I can use TT Basic or Free Filing options

If you are using TT online, it is "free to start".  If you start in the basic version, you will be prompted to upgrade if you enter a situation that requires an upgrade.   If you only upgrade to itemize, and then the program says "you don't have enough to itemize and standard is better", then you can downgrade back to the free version by choosing the "Clear and start over" option and entering your data again.  However, there are other reasons you might have to upgrade and if you have one of those situations, itemizing or standard will not make a difference.

 

If you are using Turbotax installed on your own PC or Mac from a CD or download, there is no "free" version.  There is Basic and Deluxe, but Basic does not include any state income taxes.  If you live in a state with income tax, the most cost-effective option is to buy the "Deluxe Federal+1 free state" CD from a reputable retailer like Staples, Target, or Amazon.  

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