How to Save Money When Filing Your Taxes

How to Save Money While Filing Your taxes

Preparing and filing taxes can be complicated and time-consuming. The fear of making a mistake and getting audited is all too real. Tax preparation software may be a solution. It’s often cheaper than hiring a tax preparer to do all the work, and some software options use a guided question-and-answer style to ensure it has a complete picture of your tax situation. Several providers also sell an additional audit-support option, which guarantees someone will help you through the audit process.

Many companies sell several versions of their software, and the more expensive editions can handle increasingly complex tax situations. However, no matter the edition or company there’s almost always a way to save money.

 

Consider The Free File Options

The federal Free File program offers free tax software to taxpayers that earned less than $62,000 in adjusted gross income (AGI – income after some deductions and credits) in 2015. You may be hesitant to try free software, after all with something as complex as taxes you want to make sure your filing is done correctly. However, the Free File program has 13 tax software options, including some from big names like TurboTax, H&R Block, and TaxACT. There may be more stringent age or income requirements depending on the software, and in some cases, you’ll need to pay to file a state return.

It’s worth considering the Free File options because they work with a variety of tax situations. For example, TurboTax’s Absolute Zero Edition offers free federal and state filing (through March 18), but is only available if you file a 1040EZ. You’re ineligible if you have 1099 income (freelance and contract work), own a home, have investment income, or made over $100,000.

The TurboTax All Freedom Edition through Free File has a $31,000 (AGI) income limit. But, it includes a free state return and works with more complex tax situations, such as 1099 income, investment income, and itemized deductions.

One downside with the Free File editions is you may not be able to pay for audit assistance add-ons. Audit assistance often guarantees that someone will help you process the paperwork or answer questions if you’re audited, but you may still be responsible for any payments due.

 

In-Person Assistance

There may also be free options if you’d prefer to speak with someone face-to-face. The IRS-sponsored Volunteer Income Tax Assistance (VITA) program offers free in-person preparation and filing services for individuals and families that made $54,000 or less. The prep sites are often at easy-to-reach public areas, such as schools, libraries, and community centers.

There is also free in-person tax preparation and filing specifically for older taxpayers through the Tax Counseling for the Elderly (TCE) program. As with VITA, the program uses IRS-trained volunteers, but TCE volunteers receive special training to handle typical situations around retirement, pensions, and other issues older taxpayers may face.

 

Look for Coupons

For taxpayers that decide to use one of the paid software editions, there still may be ways to save. Look for coupons and rebates online and in stores’ weekly ads. In the past, stores like Amazon and Staples offered discounts and rebates, including Staples’s online Easy Rebates. Sometimes coupons apply to in-person filing at retail locations, such as those set up by H&R Block and Liberty Tax.

American Express also has an Amex Offer for $10- to $20-off an order of TurboTax Premier or TurboTax Home and Business.

Coupons and rebates aside, prices for software often increase the closer you get to the tax-filing deadline. In some cases, you may be able to lock in a low rate by paying for the software upfront even if you don’t file until a later date.

 

Use Cash-Back Websites

An additional way to save money when buying tax software is to use cash-back websites. These sites are the middlemen of online commerce. They have links to thousands of merchants, and when you use the link the site makes a little money and passes on some of its profits in the form of cash back (often payable by check or via PayPal).

There may be limitations on what versions or purchases qualify for cash back, check the cash-back site’s terms for specifics. There are many cash-back sites and similar online shopping portals that let you earn airline or hotel loyalty programs instead of cash. You can check evreward to compare the latest offers from multiple cash-back sites.

The below are examples of the cash-back offers as of March 10. They may change and some sites also have initial sign-up offers. For example, you can earn an extra $5 cash or $10 gift card after making your first purchase of $25 or more via Ebates. TopCashBack offers new members a $10 bonus.

TurboTax
Ebates – 7.6 percent cash back
Mr. Rebates – 8 percent cash back
TopCashback – 15 percent cash back

H&R Block
Ebates – 10 percent cash back
Mr. Rebates – 10 percent cash back
TopCashback – 25 percent cash back

TaxACT
Ebates – 10 percent cash back
Mr. Rebates – 10 percent cash back
TopCashback – 15 percent cash back

 eSmart Tax
Ebates – 15 percent cash back
Mr. Rebates – 15percent cash back
TopCashback – 30 percent cash back

 FreeTaxUSA
Ebates – 25 percent cash back
Mr. Rebates – n/a
TopCashback – 50 percent cash back

 

Don’t Pay Full Price

Most taxpayers can use at least one of the methods about to save money when filing taxes. About 70 percent of taxpayers qualify for one of the Free File software options. There are also free IRS-sponsored tax preparation centers across the country. Those that decide to buy tax software can look for coupons, rebates, sales, and use cash-back offers to save money.