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How do I report the sale of my home if it was also used as a rental?
Contributed by: JanaA, FreeTaxUSA Agent, Tax Pro Selling your home can be a significant financial event, and in many cases, homeowners may qualify to exclude a portion of the gain from their taxable income. The IRS provides a home sale exclusion if certain ownership and use tests are met. Under IRS Publication 523, you may…
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How does the EITC work? Why does it go down?
Contributed by KiaraB, FreeTaxUSA Agent TaxPro As FreeTaxUSA support agents, we often get asked questions like, “Why am I not getting the EITC?” and “Why did the Earned Income Tax Credit go down when I had more income?” Here is a simple explanation so you can understand how the Earned Income Tax Credit (EITC or EIC) works.…
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How Do I Report a Backdoor Roth (2024 and later)?
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro There are two different types of Individual Retirement Accounts (IRAs) – Traditional and Roth. With a Traditional IRA, you will usually qualify to get a tax deduction in the current year for any IRA contributions you make during the year. When you retire and begin using…
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IRA Recharacterization vs. Conversion: Key Differences
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro Understanding the difference between an IRA recharacterization and an IRA conversion can be a bit tricky. While they might seem similar, it's important to know how they differ. The way these transactions are reported on your tax return can vary significantly and might impact…
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Reporting income from an online product review business
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro Online businesses, as well as opportunities to start one, continue to grow. One emerging opportunity is conducting online product reviews. Before making purchases, buyers often look for products with good reviews. To promote their products, retail sellers are constantly…
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What is Form 8938, and how do I file it?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Form 8938 was introduced under the Foreign Account Tax Compliance Act (FATCA) in 2010 to help the IRS combat offshore tax evasion. The form serves as a reporting tool for U.S. taxpayers with certain foreign financial assets. Unlike the FBAR (FinCEN Form 114), which is…
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Pay your tax preparation fees with your refund
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro At FreeTaxUSA, filing your federal tax return is always free! If you would like to file your state return, we do charge a minimal fee. You also have the option to add our Deluxe or Pro Support upgrades, as well as other products and services. We offer two payment choices…
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I have both Form 1095-C (or 1095-B) and 1095-A. How do I handle this when filing my tax return?
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro When you have both Form 1095-C (or 1095-B) and Form 1095-A, it means you had health insurance coverage through both an employer-sponsored/private plan or Medicare/Medicaid and the Health Insurance Marketplace during the tax year. Each form serves a different purpose and must…
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How do I report income from renting to a family member at a rate below the fair market value?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Your son recently got married, and you allowed the newlyweds to move into your rental property when it became vacant. Renting to a relative can be a great way to help family members while also earning some income. This option might be particularly appealing if you believe a…
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How do I calculate my home’s adjusted basis?
Contributed by: Joshua C., FreeTaxUSA Agent, Tax Pro https://us.v-cdn.net/6037879/uploads/TZ8Y10QT9VC8/adobestock-402358519.jpeg If you sold your home during the year, it’s important to calculate the adjusted basis accurately when reporting the sale on your tax return. This figure determines how much gain (or loss) you…
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How do I file if I live in New Jersey and work in New York?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro https://us.v-cdn.net/6037879/uploads/T3Z31TTFANLX/adobestock-46851395.jpeg Basics: New York taxes all wages earned from NY sources. For a comprehensive list of nonresident income NY taxes, see this article, Do I need to file a New York nonresident return? If you have NY…
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Do I need to file a New York nonresident return?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro If you’re a nonresident of New York state, you must file a tax return if you meet any of the following conditions: 1) You have New York sourced income from one of the following: 2) You want to claim a refund of taxes paid to New York (NY State, NYC, or Yonkers income taxes)…
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What are per diem expenses for business?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro You may have heard the term per diem before, but it may be a little unclear what that means. Per diem is Latin for ‘by the day’ or ‘for each day’ and is, in the simplest terms, daily allowance of expenses for an employee for things like food, lodging and incidentals when…
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What if my spouse lived in a different state?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro If you and your spouse lived in different states at any point during the tax year, you may need to file tax returns for multiple states. Since state taxes are based on residency status, some additional steps may be required before filing. Special rules apply for those in the…
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What are qualified education expenses for claiming an education credit?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Paying for higher education can be expensive — but claiming education credits, such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC), may provide some relief. Whether you’re a student or have a student dependent, the IRS offers valuable…
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What should I do if I live and work in states with a reciprocal agreement and state income tax is incorrectly withheld by my work state?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro Most states with reciprocal tax agreements require nonresident workers to submit an exemption form. This form tells your employer not to withhold taxes for the work state, since you’ll pay taxes only to your home (resident) state. If your employer withheld taxes for the state…
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How do I avoid double taxation in Arizona, California, Oregon, and Virginia when I live and work in separate states?
Contributed by JanaA, FreeTaxUSA Agent, Tax Pro When you live in one state and work in another, this can affect how you file your state taxes. Most commonly, states handle this situation in one of two ways: 1. Reciprocal Agreement-Some states have reciprocal agreements that allow residents to work in neighboring states…
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Can I e-file back taxes?
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro https://us.v-cdn.net/6037879/uploads/OTIDFFOD9FKY/adobestock-131610852.jpeg Life has been hectic, and you now have taxes from previous years that haven’t been filed. Can you e-file the back taxes? That’s a great question—and the answer is, it depends. How to e-file For…
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What is tax reciprocity, and does it apply to me?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro Do you live in one state and work in another? If so, do the two states have a reciprocal tax agreement? Not all states have reciprocal agreements, so it's important to know if your state has one — and if it applies to the state where you work. You can find the list of states…
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What is the Rule of 55?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro You may have heard that if you take out your retirement money before you turn 59 ½, you must pay a 10% penalty. But did you know there's a special rule called the Rule of 55 (see Separation from service) that lets you get your retirement money a bit earlier without the 10%…
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What is a mega backdoor Roth?
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro You’ve probably heard of a Roth IRA — a retirement account where your withdrawals are usually tax-free. But not everyone can contribute directly to a Roth IRA because of income limits. One workaround is an IRA conversion typically called a backdoor Roth: when you put money…
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How do I find my old tax return?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro There are times when you may need to get ahold of a prior year federal tax return that you filed. This could be because you need it to help you e-file your current year return, you want a copy for your personal records, or you need it to obtain a loan. Whatever the reason…
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How do I report a loss from a cryptocurrency scam?
Contributed by: LynR, FreeTaxUSA Agent, Tax Pro Cryptocurrency is an exciting and relatively new investment platform. As with all investments, there are risks, including potential for scams and fraudulent activities and you may become the victim of a cryptocurrency scam. Generally, a financial loss can be a tax deduction,…
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Is retirement income tax exempt in Alabama?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro Sometimes there’s confusion about retirement income and if it’s taxable on your Alabama state tax return - especially since most retirement income is taxable on your federal tax return. The type of retirement income you have will determine if it's tax exempt or not. How will…
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Why the IRS is going 100% digital on income tax refunds and payments for tax due
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro You may not have heard about the executive order signed on March 25, 2025, directing the Secretary of the Treasury to discontinue refunds by check and stop accepting the payment of taxes by check for all government agencies, including the IRS, as of September 30, 2025.…
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What is the Oregon surplus "kicker"?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro The Oregon tax system is unique because, unlike most states, it doesn’t impose sales tax but uses a progressive income tax system. Oregon enacted a law for the management of government spending. The law is known as the "2% surplus kicker" (or "kicker") and was intended to…
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How do Health Savings Accounts and excess contributions impact taxes?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro Health Saving Accounts (HSAs) are popular for managing healthcare costs with tax benefits. Taxpayers with high-deductible health plans (HDHPs) can contribute pre-tax money to an HSA for qualified medical expenses. However, annual IRS contribution limits apply (plus…
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How do I report cryptocurrency losses from bankrupt exchanges or worthless coin?
Contributed by: LynR, FreeTaxUSA Agent, Tax Pro As the usage of cryptocurrency and other digital assets continues to grow, the IRS is continually issuing guidance on reporting transactions along with gains and losses from these transactions. Unfortunately, some cryptocurrencies or exchanges fail or go bankrupt leaving a…
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Am I eligible for the Earned Income Tax Credit (EITC)?
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro If you're working and earning a low to moderate income, the Earned Income Tax Credit (EITC) could put money back in your pocket. It's a valuable tax credit designed to help working individuals and families, but the rules can be a little confusing. In this article, we’ll walk…
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What is depreciation recapture, and why does it matter at tax time?
Contributed by: CoryF, FreeTaxUSA Agent, Tax Pro You sold your business property and are filing your taxes, only to find out you owe a lot of money in capital gains. The most likely reason is depreciation recapture. This article will explain and/or prepare you for the reality of depreciation recapture. When you depreciate…
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What should be reported as cost of goods sold on Schedule C?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Whether you run an online boutique or sell homemade goods at local markets, understanding what qualifies as cost of goods sold on Schedule C is important for anyone who makes or resells products. What counts as cost of goods sold? Cost of goods sold (COGS) refers to…
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Can I still file 2023 taxes?
by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2023 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2023 filing deadline, it’s not too…
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How do I amend a tax return if I’m new to FreeTaxUSA?
Contributed by: Daniel_L, FreeTaxUSA Agent Welcome to FreeTaxUSA! We’re sorry your tax return needs correcting, but we can help with that even if you filed your original tax return elsewhere. 💡Note: When you’ve previously filed using another service, e-filing may be restricted. You may need to print the amendment and…
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Why hasn’t the IRS withdrawn my tax payment yet?
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro You’ve filed your tax return and selected to have the IRS electronically withdraw your tax due. However, the date selected for the withdrawal has passed, and the IRS has yet to process the payment. This can be both frustrating and stressful. This article will explain some…
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What kinds of health insurance premiums can be deducted as itemized medical expenses?
Contributed by: BariS, FreeTaxUSA Agent, Tax Pro Many kinds of insurance premiums, if paid out of pocket, may qualify as a medical itemized deduction. We’ll look at different types of insurance premium payments so you can determine what your situation may be. Perhaps you’ll find an additional itemized medical deduction.…
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Can I still file 2022 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2022 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2022 filing deadline,…
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Can I still file 2021 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2021 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2021 filing deadline,…
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Can I still file 2020 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2020 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2020 filing deadline,…
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Can I still file 2019 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2019 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2019 filing deadline,…
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Can I still file 2018 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2018 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2018 filing deadline,…
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Can I still file 2017 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and AndyS, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2017 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2017 filing deadline,…
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Can I still file 2016 taxes?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Did a major life event prevent you from filing your 2016 tax return on time? Were you missing important documentation? Or maybe you simply procrastinated and forgot to file. Whatever the reason, if you missed the 2016 filing deadline, there may still be steps you can take.…
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What is happening to the clean vehicle credits, and when will the changes take effect?
Contributed by: Joshua C., FreeTaxUSA Agent, Tax Pro The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, has introduced sweeping changes to federal tax policy, including a dramatic shift in how clean vehicle credits are handled. Previously, under the Inflation Reduction Act, the clean vehicle credit…
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How do I report mined cryptocurrency and capital gains from crypto sales?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro The IRS requires you to report digital currency on your tax return each year if you’ve received, sold, exchanged, or otherwise acquired cryptocurrency or other digital assets. If you mine cryptocurrency, there are different reporting requirements when you first acquire the…
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How does the One Big Beautiful Bill Act (OBBBA) impact energy efficient home improvement credits?
Contributed by: TriciaD, FreeTaxUSA agent, Tax Pro In 2025, President Trump enacted the One Big Beautiful Bill Act (OBBBA), introducing significant revisions to deductions related to energy-efficient home improvements. This legislation reduced or eliminated numerous tax credits and deductions previously provided under the…
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How will the OBBBA changes to charitable contributions affect my tax bill in the future?
Contributed by: JanaA, FreeTaxUSA Agent, Tax Pro In July 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), which includes significant changes to charitable contribution deductions, effective for tax years beginning after December 31, 2025. Here’s a look at the new changes and how they may affect your tax…
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How do I report depreciation for a rental that was repeatedly converted between rental and personal use?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro There are many reasons people may choose to convert a home into rental property instead of selling. For example, during the Great Recession, housing prices dropped below what many people had paid for their properties. In some cases, homeowners had to decide between…
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How many years back can you file taxes?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro Technically, you can file back taxes for any past year you are missing. However, in most situations, only the past six years are required to be in good standing with the IRS. The recommendation is to file all past due tax returns, regardless of whether you can pay past…
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Can I file multiple prior year tax returns?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro Life can throw you curve balls, and you may end up in a situation where you need to file your current year tax return along with a couple past due returns from previous years. You’ll want to get caught up as soon as you can. You may have a refund for one year but owe…
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Taking advantage of the stepped-up basis loophole for inherited stocks, property and investments
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro When you inherit stocks, property or other investments, you may have a capital gain to report on your tax return when you sell them. Using the tax provision known as the "step-up in basis" can reduce or eliminate the capital gains tax you owe. How step-up basis works:…