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Intuit departs IRS Free File program: What that means for TurboTax users

Angela Lang / CNET

Intuit, the company behind Tax filing software TurboTax announced on July 15th Blog post Don’t participate anymore IRS Free File Alliance, Partnership between the IRS and the tax filing software industry Free tax software for Americans earning $ 72,000 Less than.

Intuit cites the desire to focus on “limitations to the Free File program” and “further innovation in ways not permitted by current Free File guidelines” within the free program.under Agreement Participants who manage the program limit the marketing of paid products to companies that use free file solutions.

In addition to tax services, the company says it focuses on pilot programs that help customers save money, pay off debt and increase their income. An Intuit spokeswoman told CNET that the company “is committed to continuing to provide free tax reserves while accelerating innovation to address all consumer financial problems.” .. TurboTax Free Edition Is the industry’s most used free tax preparation offer and remains available to more than 50 million people who file simple tax returns. “

We don’t know how Intuit’s withdrawal from the Free File Alliance will affect existing Free File customers, the IRS program, or the 2021 tax season (scheduled for 2022), but we’ve received details from the company. I did. Read the inside story of the Free File Alliance, the changes for Intuit’s Free File users, and the remaining options for the IRS Free File program.

What is the Free Filing Alliance?

Prior to its termination, Intuit was a member of the Free File Alliance for almost 20 years.During this time, the company H & R block And other alliance members-actively lobbyed Congress to prevent the IRS from creating its own Free tax filing system.. Members of the Free File Alliance said the competition with the IRS was “Continuing competitive threat to our business” It “It can have a significant negative impact on your bottom line.“”

Their efforts were rewarded in April 2019, when the U.S. Houseways and Means Commission passed. Taxpayer First Law, Agreed that the IRS will not create its own system-as long as a group of tax filing companies offers free services to eligible taxpayers.

The bill was passed after it was issued in April 2019 ProPublica Articles,this reported Intuit deliberately used misleading marketing and website design known as the “dark pattern” Internet tactics to direct taxpayers from the Free File program to paid products.That December, the IRS New tax filing contract This prevents businesses from hiding free products in Internet searches.We also lifted the ban on allowing the IRS. Create your own Tax filing system. “This renewed agreement is part of the IRS’s greater efforts to help taxpayers meet their tax obligations,” IRS Commissioner Chuck Letchig said in a press release.Intuit Public support Change.

Still, only a small percentage of qualified taxpayers use the free solution.according to Federal reviewIn 2019, less than 3 million people used the free file program, but more than 100 million taxpayers were targeted.

If the free version of TurboTax is still available, what exactly has changed?

An Intuit spokeswoman told CNET in an email that he plans to extend the benefits of using TurboTax Free Edition to “complete tax and subsequent financial conditions.” According to Intuit, such service extensions were not possible with the IRS FreeFile rule.

“TurboTax Free Edition is a different product than what TurboTax donates to prepare for free taxes through the FreeFile program,” a spokeswoman said. “The Free File program provided by Intuit is called the IRS Free File provided by TurboTax. These are quite similar, but the Free File program guidelines include providing filers with a completely free refund prepayment. That is not allowed. They need money faster to pay the bills. “

I filed my tax using the IRS Free File provided by TurboTax. What about my data?

Intuit did not immediately answer CNET’s question regarding user data for 2020 returns submitted through the FreeFile program. Company website Provides an overview of how to request a copy of your personal data, change your marketing settings, and delete your data from the server.

What is my free tax software option now?

Many major tax software providers offer free tax filing services when income levels are below certain thresholds and filing is easy. Credit karma tax Offering free state and federal filings in 2021 H & R block We offer free options for W-2 tax filers and those who have been unemployed in the past year.

Even though Intuit has terminated the program, there are still many free file options available. Taxpayer Total annual adjusted revenue is less than $ 72,000.The· IRS program It currently contains 8 participants.

You are also eligible to use the program if you earn more than $ 72,000 a year. Free file-fillable form –Electronic version of IRS paper form-Although preparation assistance is not included.

What other free tax reserve resources are available?

Depending on your income, age, and other factors, you are eligible to prepare and file free taxes from any of the following federal programs:

  • Volunteer income tax support. VITA Is a federal grant program that provides free tax preparation services to low- and middle-income filers, persons with disabilities, and non-English speaking people with an annual income of $ 57,000 or less.
  • Tax counseling (TCE) for the elderly.The· TCE The program provides free tax returns and tax assistance to seniors over the age of 60 on pension and retirement tax issues.
  • Pentagon provides Service member And their family Free tax resourcesIncluding software from H & R block, And financial and legal counseling. MilTax participates in the VITA program, and consultants can respond directly by phone, live chat, or at the nearest military base.

The IRS oversees the VITA and TCE programs. These programs include IRS partners and certified volunteers who must pass tax law training that meets or exceeds IRS standards. Tax returns are subject to an IRS quality review prior to filing.

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