-
How to report an employment lawsuit settlement payment
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro Work can be hard enough on its own. Dealing with an employment dispute adds emotional strain. If you’re at the point where the process is over and a settlement has been paid, you may have to pay taxes on that payment. Your attorney may have explained this, but perhaps not…
-
How do I report a worthless stock or investment on my tax return?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro When a stock or security becomes worthless, you have a capital loss, not a bad debt. A bad debt is created when you lend money or sell something on credit and don’t have an expectation to be paid back. When a security is worthless, here are some things to keep in mind:…
-
What is an NOL (net operating loss) and how do I report it on my tax return?
Contributed by: LynR, FreeTaxUSA Agent, Tax Pro Have you ever had a bad year when your business lost a lot of money? Or perhaps you’ve lost your home or property in a disaster and insurance didn’t cover the damage. If these losses exceed your other income, you may be able to claim a net operating loss and use the loss to…
-
What should I know about the residential clean energy credit before I buy my solar panels?
Contributed by: JanaA, FreeTaxUSA Agent, Tax Pro What is the energy credit? The residential clean energy credit is a tax credit that allows you to deduct a percentage of the cost of installing qualifying solar energy systems. This credit is applied to your federal tax liability to reduce your tax amount due. Credit amount…
-
Can I get a deduction or credit on my tax return for college, private school or homeschool expenses?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro Expenses for schooling can add up, especially when it’s not public K-12 schooling, which is subsidized by county taxes. When it comes to filing your tax return, it would be nice to be able to get a deduction or credit for some of those out-of-pocket expenses. But is it…
-
How do I enter my 1099-K for business income?
Contributed by: Daniel_L, FreeTaxUSA Agent In this article, we’ll discuss the following topics: Basic Form 1099-K information Help to identify business income Use of Schedule C to report business income Directions for entering 1099-K business income; and Tip and extended example Form 1099-K Form 1099-K reports electronic…
-
What do I need to know about railroad retirement benefits?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro If you or a family member receive retirement benefits from the Railroad Retirement Board, you’ll get special tax forms at filing time. Forms to be aware of are: Form RRB-1099-R Form RRB-1099 Form RRB-1042S (for some international recipients) Understanding these forms is…
-
What are 401(k) limits for highly compensated employees (HCE)?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro A 401(k) plan allows employees to save part of their wages for retirement with benefits like tax-deferred growth and employer matching contributions. Annual contributions to a 401(k) plan are limited. Highly compensated employees (HCEs) are subject to certain rules…
-
Qualifying for and claiming a clean vehicle (CV) credit – what do I need?
Contributed by: JoshuaC, FreeTaxUSA Agent, Tax Pro Please note that with the passage of the One Big Beautiful Bill Act of 2025, the clean vehicle credit is ended, meaning qualifying and EV purchases must be made before September 30, 2025. This article is to explain how the credit works if you are preparing a prior year tax…
-
What is Form 1099-DA, and how will it affect my tax return?
Contributed by: BarbaraL, FreeTaxUSA Agent, Tax Pro What is IRS Form 1099-DA (Digital Asset Proceeds)? Did you get a brand-new form this year titled Form 1099-DA and wonder what it even means or what you’re supposed to do with it? Starting in calendar year 2026, you might receive a 1099-DA if you sold, traded, or got rid…
-
What is the new deduction for senior citizens, and how will it impact taxable social security benefits?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro With the recent signing into law of the One Big Beautiful Bill Act (OBBBA), millions of older Americans got a significant tax break through a new deduction available from 2025 to 2028. You may be wondering how the deduction works and if it affects social security benefits.…
-
What are the top 10 changes introduced by the One Big Beautiful Bill Act (OBBBA)?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. This new law extended and replaced the Tax Cuts and Jobs Act (TCJA), which was set to expire at the end of 2025. The OBBBA takes effect from 2025 through 2028. You may be wondering what…
-
Do I qualify for the new deduction for overtime pay?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro The new tax law was signed on the 4th of July 2025. It includes a provision that allows people who are paid overtime to take a deduction of up to $12,500 of their overtime pay. The deduction is set to be available from 2025 until 2028. While the IRS still has guidance…
-
What are deductible medical expenses?
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro You might feel that you pay a significant amount out of pocket for medical expenses. Did you know you may be able to claim these expenses on your tax return? They can be reported as an itemized deduction on Schedule A. However, this will depend on your situation, as there…
-
What counts as deductible travel expenses?
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro Knowing what travel expenses are deductible can be confusing such as meals, transportation, and lodging. As a self-employed individual, generally most, if not all, travel expenses can be deducted. Business travel expenses are reported on Schedule C. There are certain…
-
What do I need to report from my 1099-K?
Contributed by: Daniel_L, FreeTaxUSA Agent Form 1099-K Form 1099-K reports electronic payments you received for goods or services through credit cards, debit cards, or any other third-party payment network like Venmo or PayPal. Your 1099-K filer or issuer records these transactions. When the threshold is met by dollar…
-
Reporting Name, Image and Likeness (NIL) income
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro Congratulations! Your sports prowess was just monetized into an NIL deal! Not only do you get to do cool things like endorse national brand labels, drive a sports car from a major car dealership, eat at up-scale restaurants or a local favorite hamburger joint, wear…
-
Who is a qualifying person for head of household filing status?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Using head of household filing status usually gives you a lower tax rate than the rates for single or married filing separately. It also provides you a higher standard deduction. You may be able to file as head of household and take advantage of these benefits if you: are…
-
When to report Paid Family Leave and Family Leave Insurance on your taxes
Contributed by: BarbaraL, FreeTaxUSA Agent, Tax Pro Taking time off for the delivery of a new baby or to care for a family member? You might get money from Paid Family Leave (PFL) or Family Leave Insurance (FLI). No surprise—this income can affect your taxes. Don’t worry! In this article, we’ll explain what PFL and FLI…
-
What is the IRS Gig economy tax center
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro Do you make money part-time online through platforms like FiVRR, Etsy or eBay? Did you create an App that’s earning you money every time it’s used? Or maybe you’re running a full-time retail shop through Amazon, renting out a spare room in your house, or letting others…
-
Why is my mortgage interest deduction limited?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro The IRS allows homeowners to claim a mortgage interest deduction for mortgage interest and points paid on a loan secured by your home, whether it’s your main home or a second home. However, to prevent disproportionately benefiting higher-income homeowners, the IRS has set…
-
Are my car loan interest payments deductible?
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro With the signing of the One Big Beautiful Bill Act into law, you may be wondering if your car loan interest is now deductible, or you may have heard there’s no tax to pay on car loan interest. In this article we’ll cover all you need to know to see if you qualify for the…
-
What do I do if box 2a is blank on my 1099-R?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro When you receive a Form 1099-R, the retirement company that issues the form doesn’t always calculate the amount in box 2a for you. How do you know what portion of your retirement distribution or payment is taxable? In many cases, it’s up to you to figure out what amount to…
-
What if more than one person can claim a child?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro In certain situations, a child can meet the tests to be a qualifying child of more than one person. This means multiple individuals could potentially claim the child as a dependent or designate them as a qualifying person for the head of household filing status. However, a…
-
IHSS income: what is it and is it taxable?
Contributed by: BarbaraL, FreeTaxUSA Agent, Tax Pro If you're an IHSS (In-Home Supportive Services) provider, you might receive a W-2 for your caregiving work, even if that income isn’t taxable. Thanks to IRS Notice 2014-7 some caregivers are allowed to exclude (subtract) this income from their federal Adjusted Gross…
-
How do scholarships and grants affect your ability to claim an education credit?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Paying for higher education can be expensive, so any financial assistance is helpful. Scholarships and grants are invaluable resources that can reduce the cost of tuition and other educational expenses. Additionally, education credits, such as the American Opportunity Tax…
-
Why is my refund lower than what FreeTaxUSA calculated?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro When you prepare your tax return with FreeTaxUSA, our goal is to help you file an accurate tax return while maximizing your refund or minimizing the amount of tax you owe. If you’re due a refund, the IRS will send it to you after they finish processing your tax return.…
-
First time using FreeTaxUSA
Contributed by: AndreaS, FreeTaxUSA Agent, Tax Pro Filing your own tax return can seem like a daunting task! But at FreeTaxUSA, we like to keep our software easy to understand and approachable so anyone can feel confident preparing their own return. Best of all, federal returns are always free! There is a small fee for the…
-
How do I enter the sale of a second home?
Contributed by: AndreaS, FreeTaxUSA Agent, Tax Pro A second home is typically a home that is used by you part of the year. This includes a vacation home or a smaller home in another city you live in occasionally throughout the year for business. It is a home used for personal use that isn’t your main home. When you’re…
-
How do I report a car rental as a business expense?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro The gig economy is a flexible labor market where individuals engage in temporary, project-based work. The gig economy has experienced huge growth over the last decade. Companies like Uber, Lyft, Uber Eats, DoorDash, and Amazon Flex, are just a few examples of this trend.…
-
How to report the sale of a collectible
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro You inherited a set of antique silver flatware from your grandmother. You never use it and recently learned the price of silver has gone up, so you can sell it now for a good price. However, you wonder whether you need to report this on a tax return since it’s the sale of…
-
My house burned down. May I deduct the disaster loss on my taxes?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro A disaster loss is when something unexpected happens and you lose a personal item like a car, home, shed, barn, or other things with value. For example, you have a barn on your property that burns down when a severe storm comes through your area and the barn is struck by…
-
Do I need to report the sale of my main home?
Contributed by: AndreaS, FreeTaxUSA Agent, Tax Pro Most homeowners don’t need to report the sale of their main home (primary residence) on their tax return. However, there are circumstances when it’s required. In this article, we’ll guide you through the eligibility requirements for the home sale exclusion and explain when…
-
How do know if I am self-employed or an employee?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Many businesses choose to issue Form(s) 1099-NEC instead of Form(s) W-2. This makes sense for people who want to be treated as running their own business. But for others, it can be confusing and frustrating. Some taxpayers are shocked because they don’t understand why…
-
What is the difference between a refundable and nonrefundable tax credit?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro To save energy costs, you did some upgrades to your house this year by upgrading your air conditioner, windows, and doors. When you filed your return, you applied for an energy-efficient home improvement credit. However, you didn't see a significant refund and wondered…
-
What if my 1099-K amount is wrong?
Contributed by: Daniel_L, FreeTaxUSA Agent Form 1099-K Form 1099-K reports electronic payments received for goods or services through credit cards, debit cards, or any other third-party payment network like Square, Venmo, or PayPal. The 1099-K “filer” or issuer records these transactions. When the threshold is met by…
-
Why can’t I get all the child tax credit in my refund?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro You may remember during the pandemic getting a massive $3,000 to $3,600 per child refundable child tax credit that was paid throughout the year – that was nice, wasn’t it? However, now you may be wondering why you never see anywhere near the $2,000 per child tax credit in…
-
What if my mortgage was refinanced or sold to another lender, and I have two 1098 forms for the same mortgage?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro The FreeTaxUSA software is limiting your mortgage interest deduction because the two 1098 forms you’ve entered show combined balances over $750,000. This doesn’t seem right! How can you claim the maximum deduction? Don’t worry; we’re here to help. Let’s start by looking at…
-
How do I report foreign rental property?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Reporting income from a rental property can be complicated. If your rental property is in a foreign country, there are a few additional steps and considerations. From foreign income and real estate taxes to depreciation methods and converting the currency from the foreign…
-
Using one vehicle for multiple businesses (2024 and later)
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later. Nowadays, many individuals earn some extra cash through various side hustles. Activities such as dog walking, ridesharing, delivering food, or renting space are common. Individuals using the same personal vehicle for multiple…
-
How do I report a 1099-K for a loss on the sale of personal items?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro If you sell a personal item (such as a used car, furniture, or clothing) for less than you originally paid for it, you don't need to report it on your tax return. This is because losses on the sale of personal-use property are neither tax-deductible nor included as income.…
-
Basics of navigating the FreeTaxUSA software
Contributed by: AndreaS, FreeTaxUSA Agent, Tax Pro You’ve started an account in FreeTaxUSA but are a little uncertain about how our software works. No worries, here’s some tips and tricks so you can navigate through the software like a pro. How does it work? Our software works like an interview; it will ask you some basic…
-
Can I file using head of household filing status if I am married?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Generally, no. In most cases, head of household filing status is only for a single person who provides shelter and support for a dependent who lives with them most of the year. However, there are a few rules that may allow a married person to file using head of household…
-
I received a 1099-NEC, but I don’t think I am self-employed
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro January rolls around, and you're patiently waiting to receive tax forms in the mail. Slowly, the regular forms come, such as the W-2, 1099-INT, and 1098 for mortgage interest. Then a Form 1099-NEC arrives in the mail. What is this form about? An inspection shows it was…
-
Do I need to report disability income on my tax return?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Every good accountant will answer questions like this by starting with two words: “It depends.” If your disability income is only coming from social security, then none of the income is taxable and you don't need to file a tax return. Conversely, some disability income is…
-
Should I file using the married joint or separate filing status?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Married filing jointly is commonly recognized as the most advantageous filing status. However, are there many reasons to use the married filing separate or (in some cases) the head of household filing status even while you’re still married? The answer is “it depends.”…
-
What do I do if FreeTaxUSA keeps declining my card even when I’ve verified the card should work?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Nothing is more frustrating than having a credit card that gets declined, especially when you’re confident the card should work fine. If this is something you’re experiencing with FreeTaxUSA, here are some things to try: Verify Card Details: Ensure the card number,…
-
What is an SEP plan and how do I calculate my limits and enter it in FreeTaxUSA?
Contributed by: CoryF, FreeTaxUSA Agent, Tax Pro Please consult a financial institution for set-up instructions for your business SEP. They can provide a detailed discussion on this complex subject. Simplified Employee Pension explanation What options are available to save for my retirement when I am self-employed? The…
-
When should I fill out Form SS-8?
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro You were hired on to work for your new employer, congratulations! As far as you knew, you were an employee and every time you were paid, whatever taxes needed to be sent to the IRS were taken care of. You assumed you’d receive a W-2 at the end of year to file on your tax…
-
When do I need to hire a tax professional?
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro FreeTaxUSA helps millions of customers across the nation prepare and successfully file their tax returns every year. Our software is simple to use and designed to guide our users from start to finish to maximize their refund or pay the least amount of tax due. Whether…