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What To Know Before You Use ‘Free’ Tax Software

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Major tax preparation companies advertise free tax filing services, but many of those programs have added fees.

The IRS has a “free file” program for people who make $69,000 or less a year, no strings attached.

As tax season approaches, many individuals turn to free tax software as a means of preparing and submitting their tax returns. While these programs can provide a cost-effective alternative to hiring a tax professional, it is important to be aware of their limitations and potential drawbacks. Before using free tax software, here are a few factors to consider.

Accuracy and completeness

Most free tax software providers do not guarantee the accuracy of their calculations or the completeness of their forms. This means there is a greater likelihood of errors, since the responsibility for inputting information and verifying calculations falls on the user. Additionally, free software may not include all the forms and schedules you need to accurately file your tax return, which could lead to penalties and interest charges if not addressed.

Technical requirements

Some free tax software programs require specific operating systems, internet browsers or other technical specifications to run effectively. Before choosing a free tax software program, it is recommended that you review the minimum system requirements to ensure your computer and web browser are compatible with the software. Failing to meet these requirements can lead to software crashes, data loss, or other technical issues that can delay or complicate the tax preparation process.

Data privacy and security

Many free tax software offerings are marketed as ‘cloud-based’ or ‘online’, meaning that your tax information is stored on remote servers managed by the software provider. While this can be convenient in terms of allowing you to access and update your tax information from any device with internet access, it can also raise concerns about data privacy and security. It is important to choose a well-known and reputable provider that takes data privacy and security seriously, and to take appropriate measures to secure your own devices and network.

Customer support and assistance

While free tax software often provide users with access to tax experts, the scope and availability of expert assistance can vary widely. Some programs may offer only limited support, such as an online forum or FAQ section, while others may provide access to a dedicated tax expert who will assist with complex tax questions. It is recommended that you research the program’s customer support options and determine if they fit your needs.

In conclusion, using free tax software can be a cost-effective alternative to hiring a tax professional, but it is important to be aware of its potential drawbacks. Before choosing a free tax software program, consider the accuracy and completeness of the software, technical requirements, data privacy and security concerns, and customer support options. By taking these factors into account, you can make a well-informed decision about which program is right for you.