AVOID THE CHAINS! I worked at one of the big ones for two tax seasons. The training is minimal and they push quantity over quality. Most of the preparers there could handle basic W-2 returns but would be completely lost with brokerage statements or anything remotely complex. For your situation with multiple accounts and a new dependent, you definitely want either an independent EA or CPA. The price difference isn't huge but the expertise gap is massive. The chains often use software that's basically the same as consumer tax software, just with a person inputting the data instead of you.

Thanks for the inside info! That's exactly what I was worried about. I'll start looking for independent pros instead of going to one of the big chains. Been seeing their commercials everywhere so was tempted by the convenience, but sounds like it's worth finding someone with more expertise.

Do you know which states offer free filing? I'm in Ohio and always end up paying for state filing even when I get the federal for free.

I don't have a comprehensive list for all states, but I know Ohio has something called Ohio I-File which is a free electronic filing service. It's separate from the IRS Free File program though, so you'd need to go directly to the Ohio Department of Taxation website to access it. Many states actually do offer some form of free filing, but they don't advertise it well. Check your state's tax department website and look specifically for terms like "free file" or "e-file." Sometimes you need to dig around a bit to find the free options.

Next time try FreeTaxUSA - they handle HSA and basic investment stuff on their free version. I've used them for years and only pay like $15 for state filing. Their federal filing is free regardless of complexity for most situations.

Thanks for bringing that up about her student aid. She did get some grants, but they all went directly to tuition and books, so I think those are tax-free? She doesn't have any loans. About claiming both her and her son - that's good to know. If I had to choose, would it be more beneficial to claim her or him for tax purposes?

Grants that went directly to qualified educational expenses like tuition and required books are generally not taxable, so you're probably right that she doesn't need to file if that was her only income beyond the child support (which isn't taxable to the recipient). As for whether to claim her or her son, it usually makes more financial sense to claim the child if you have to choose. A qualifying child can potentially make you eligible for credits like the Child Tax Credit (worth up to $2,000 per qualifying child) and potentially the Earned Income Credit if your income falls in the eligible range. These are typically worth more than the standard dependent deduction you'd get for claiming your girlfriend.

100% this! I work at a tax prep office and the #1 issue we see with dependent claims is lack of documentation. Keep receipts for major purchases, rent payments, utilities, etc. If you're audited, you'll need to prove you provided over half of the child's total support.

What about Medicare premiums? I'm retired but also have some self-employment income from consulting. Are those deductible too? TurboTax never seems to ask me about this.

Medicare premiums (Parts B and D) are indeed deductible as part of the self-employed health insurance deduction if you have self-employment income! This is a commonly missed deduction. The key is that you can only deduct premiums up to the amount of your net self-employment income. If you're using TurboTax, you'll need to look in the self-employment section and find where you enter your health insurance. There should be an option to include Medicare premiums there. If your consulting income is reasonably substantial, this could be a significant tax savings for you.

I used IRS Free File through one of their partners last year and it was actually pretty straightforward about insurance premiums. It specifically asked about self-employed health insurance in a separate section and had clear explanations. Much more direct than the commercial versions where they hide things in weird places.

You make a good point about the psychological aspect. I hadn't considered that angle before. But regarding business expenses - couldn't those be handled separately from personal taxation? Like keep business deductions but simplify personal taxes? And for charitable giving, I wonder if people would still donate without the tax incentive...

That's a really interesting question about separating business and personal tax structures. It could work in theory, but then you'd still need a complex system for business taxation. Most economists think there should be symmetry between personal and business tax structures to prevent gaming the system. As for charitable giving, studies have shown that tax incentives do influence donation behavior significantly. While people would still give to causes they care about, the research suggests overall giving would decrease by 25-40% if the deduction was eliminated. This would hit smaller local charities the hardest since they rely more on middle-class donors who are more tax-sensitive.

A well-designed flat tax would still have a basic exemption amount. So maybe the first $25,000 or $30,000 isn't taxed at all, then everything above that is taxed at a single rate like 15% or 20%. That would protect low-income earners while simplifying the rest of the system.