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How to confirm the charity you want to contribute to is a qualified 501(c)(3) and eligible for a deduction
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro Have you ever donated to a charity only to later realize that it wasn't tax-deductible? I have, and it's frustrating -- especially if you’re counting on that deduction to lower your tax bill.This article will guide you through how to verify an organization’s tax-exempt…
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How do capital gains and losses affect my tax return?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro Capital gains and losses play a significant role in determining your tax liability. Whether you’re selling stocks, real estate, or other investment assets, understanding how these transactions are taxed can help you plan smarter and potentially reduce your tax bill. We’ll…
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What is income in respect of the decedent, and how is it reported?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro When a loved one passes away, there’s a lot to manage — including figuring out which tax returns need to be filed. FreeTaxUSA only handles Form 1040, which covers the final tax return for the decedent as well as any individual tax returns for beneficiaries. However, it’s…
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Can I contribute to both an SEP-IRA or 401(k) and a traditional IRA, and claim deductions for both?
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro If you’re self-employed or have access to a workplace retirement plan and you’re thinking about maxing out your retirement savings, you might wonder: Can I contribute to both a traditional IRA and an SEP-IRA or 401(k), and deduct both on my taxes? The short answer is yes…
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Are my business-related meal expenses deductible?
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro Owning a business and understanding which expenses are deductible can be overwhelming. When you’re self-employed, business related meal expenses are typically deducted and reported on Schedule C, Profit or Loss from Business (Sole Proprietorship) Most meal expenses are…
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How to file back taxes
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro and PhillipB, FreeTaxUSA Agent, Tax Pro Occasionally, taxes are not filed by the deadline and may remain unfiled for several years. We recommend filing them as soon as possible. FreeTaxUSA supports filing returns for the past seven years. If you have multiple years to file,…
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What do I need to know about taxes when starting an LLC?
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro So, you’re thinking of starting your own business and forming an LLC. This is an exciting step! But once you’ve filed the paperwork with your Secretary of State, you might wonder: What now? Whether you’re a solo entrepreneur or forming an LLC with others, it’s important…
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What happens to money in my FSA if I don't use it?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro Back in 1978, Congress passed a revenue act creating Flexible Spending Accounts (FSA) to aid employees with medical and dependent care costs. An FSA allows a person to contribute pre-tax money from wages into a designated savings account to use on qualifying medical and…
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How is FMLA income reported?
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro Are you wondering how to report the income you received while taking time off under the Family and Medical Leave Act (FMLA)? The way this income is reported depends on where it comes from and how it’s paid. Example Alex took parental leave after having a baby. Some of the…
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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 the amount decrease?
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'll 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 the…
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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 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 realized when you sold the property — and that in turn determines whether any…
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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 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 source income, and you’re a nonresident, a nonresident NY state tax return…
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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 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 online filing tax software like FreeTaxUSA, the IRS only allows e-filing for the…
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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,…