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I've used FreeTaxUSA for the past 3 years and highly recommend it. Federal filing is completely free no matter your situation, and state is only $15. Never got hit with surprise upgrades or fees like with TurboTax. If your taxes are relatively simple with W-2 income, student loan interest and an IRA contribution, you'll have no problems. The interface isn't as flashy as TurboTax but it gets the job done and their support was actually really helpful when I had questions.
Do you feel like it finds all the possible deductions? That's my main worry - missing out on money I should be getting back.
It walks you through all possible deductions and credits with a comprehensive questionnaire just like the expensive services do. For someone in your situation, it asks about education expenses, student loan interest, retirement contributions, and other common deductions. I actually found FreeTaxUSA to be more transparent about explaining which deductions you qualify for compared to TurboTax. They don't hide information behind paywalls or try to upsell you constantly. Every time I've compared my results between multiple tax programs, the refund amount has been identical because ultimately it's all based on the same tax laws.
Tax preparer here! People think different software gives different refunds, but that's not how taxes work. Your refund is determined by tax law, not which program you use. The reason your friend got a bigger refund probably has NOTHING to do with the software and EVERYTHING to do with their specific tax situation (dependents, homeownership, education credits, etc.) That said, for free options in 2025: IRS Free File if you make under $73k, Cash App Taxes (completely free), FreeTaxUSA (free federal), or FileYourTaxes.com. They're all fine for simple returns with W-2 income like yours.
Have you checked out the VITA (Volunteer Income Tax Assistance) program? If your income is under $60,000, they'll do your taxes for FREE. They have locations all over - libraries, community centers, etc. Just Google "VITA tax site near me" and you should find something. The volunteers are IRS-certified and they do a great job.
Thanks for this suggestion! I looked it up and there's actually a VITA site at my local library this weekend. Do you know if I need to bring anything specific with me? I have my W-2 and ID but not sure what else they might need.
Definitely bring your photo ID, social security card (or a document with your SSN), all tax documents (W-2s, 1099s, etc.), and last year's tax return if you have one. Also bring your bank account info (routing and account numbers) for direct deposit of your refund. They usually prefer if you make an appointment, so call ahead if possible. Some sites also require you to fill out an intake form before your visit to save time. Most locations can file both federal and state returns for you, and they double-check everything to make sure you're getting all the credits you qualify for.
I was in a similar situation last year and ended up using TurboTax Free Edition. It was actually really easy, even though I was super nervous about making mistakes.
Has anyone used the IRS Direct File system for filing extensions? I heard they launched something new this year but not sure if it works for business extensions or just personal ones.
Direct File is only for simple personal returns right now, not for business returns or extensions. For your 7004, you'll need to either use commercial tax software, have your accountant e-file it, or mail in a paper form. I've been using FreeTaxUSA for my S Corp returns for years - they handle the 7004 extension filing too and it's pretty straightforward.
Is anyone else confused about COVID tax rules for S Corps? I feel like they keep changing and I don't know if any of the special provisions still apply for 2025 filing season.
Most COVID-related tax provisions have expired now. For the 2025 filing season (2024 tax year), things have largely returned to pre-pandemic rules. Employee Retention Credits ended, PPP loan forgiveness is old news, and the special sick leave credits are gone. The only lingering effects might be if you're still carrying losses forward from the pandemic years, but the special expanded rules for those have mostly reverted to normal too.
Aside from the identity theft possibility, I want to point out something important about S Corps that might be relevant here. There's a common misconception about how S Corp extensions interact with personal returns. When you file an extension for your S Corp (Form 7004), it ONLY extends the filing deadline for the business return (Form 1120-S), not your personal return. However, the S Corp income flows through to your personal return via Schedule K-1. If you haven't received your K-1 yet because the business return isn't done, you still need to file a separate extension for your personal return (Form 4868). Is it possible your accountant filed your personal extension but didn't clearly communicate this? That wouldn't explain the "already filed" error, but it's worth checking if there was miscommunication about what was actually filed.
That's actually a good point I hadn't considered. I assumed my accountant had only filed the S Corp extension, but maybe there was confusion and they filed something for my personal taxes too? Though wouldn't that have shown up when I checked my IRS account online?
An extension request for your personal return typically wouldn't appear in your online account history the same way a filed return would. The IRS online account usually shows filed returns, not extension requests. Your accountant might have e-filed your extension without your knowledge thinking they were being helpful. However, that still doesn't explain the specific error code you received, which indicates an actual return was filed, not just an extension. If your accountant had filed an extension for you, you should still be able to e-file your actual return later. The fact that you got an "already filed" rejection strongly suggests either identity theft or a significant error, such as your accountant accidentally filing a return instead of an extension.
Random question but did you have unemployment in 2024? There was a massive unemployment identity theft ring discovered recently. Criminals were filing fake unemployment claims using stolen identities, then filing tax returns to claim refunds on the taxes withheld from those benefits. If someone filed unemployment in your name, they might have also filed a tax return to collect tax withheld from those fake benefits. This happened to my brother and the first sign was exactly what you're experiencing - rejection with that same error code.
This is a hugely important point. Unemployment fraud and tax identity theft are closely linked now. You should check with your state unemployment office to see if there are any claims filed under your SSN that you didn't submit. If there are, you'll need to report that fraud to the state as well as to the IRS.
Paolo Conti
These company rental services are exploiting a grey area rather than a complete loophole. The way it typically works is: 1. You pay the US company for "services" rather than directly selling to US customers 2. The US company invoices your customers and collects payment 3. The US company takes a percentage as their fee 4. They send the rest to you as payment for your "service" to them In theory, the US company should pay taxes on their fee income. YOU still need to pay taxes in your country on the money you receive. The problem? Many countries have tax treaties that might make this arrangement ineffective or even illegal depending on specifics. Plus, if the IRS determines you're the beneficial owner of the income, you could face serious penalties for not filing US returns.
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Amina Diallo
β’What about VAT/sales tax collection though? That seems like a legitimate reason to use these services - handling all the state-by-state sales tax requirements in the US is a nightmare for foreign businesses.
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Paolo Conti
β’Sales tax collection is indeed one of the few legitimate benefits these services can provide. The US sales tax system is notoriously complicated with different rules across 50 states plus local jurisdictions. Having a US entity handle that complexity can be valuable. However, there are specialized sales tax compliance services that can handle just this aspect without the problematic "company rental" structure. Services like Avalara or TaxJar can manage US sales tax compliance for foreign companies at a much lower cost than these rental arrangements. You'd still need to register for sales tax in relevant states, but these specialized services can handle the calculation, collection and filing without the questionable tax structure these rental companies use.
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Oliver Schulz
The whole concept reminds me of nominee directors and shareholders that are common in offshore structures. The difference is those arrangements at least acknowledge who the beneficial owner is with private agreements. These rental services seem intentionally vague about who actually owns what. If you're using one, make sure you understand: 1. Who legally owns the IP of what you're selling 2. Who's responsible if there's a lawsuit against the US entity 3. How your country's controlled foreign corporation rules apply 4. Whether this creates permanent establishment issues My company looked into this and decided it created way more risk than reward. We just bit the bullet and properly set up a US LLC with transparent tax treatment.
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Natasha Kuznetsova
β’Did setting up a proper LLC end up being much more expensive than the rental option? These services charge like $500/month which seems steep but cheaper than maintaining a full legal entity with annual fees, registered agent, etc.
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