Did you try any others? I hear CreditKarma Tax (now Cash App Taxes) is also free?

I did try Cash App Taxes (formerly Credit Karma Tax) one year actually. It's completely free for both federal and state, which is amazing, but I found it less intuitive than FreeTaxUSA. The interface wasn't as polished, and I wasn't confident it was catching everything. FreeTaxUSA feels more thorough with its questionnaire and explanations. For me, the $15 state fee with FreeTaxUSA is worth the better experience, but if you're on a super tight budget, Cash App Taxes is definitely a viable option.

Yep, they've been using "dark patterns" in their design for years. They deliberately make it confusing which version you need and hide the truly free options. There have been investigations into their practices. FreeTaxUSA and others are definitely more transparent with pricing.

What kind of penalties are we talking about if someone gets audited and the IRS rejects their claim? Is it just paying back the money or are there additional fines?

If the IRS determines an ERC claim was improper, they can require repayment of the full credit amount plus interest (which is currently at a high rate). In cases where they determine the claim was recklessly or intentionally improper, they can also assess accuracy-related penalties of 20% or even fraud penalties of 75% of the underpayment. There's also the cost of defending an audit, potential damage to banking relationships if a large repayment is suddenly required, and the business disruption of dealing with an extended examination.

Thanks for sharing this - this is exactly what I'm worried about. I keep trying to explain the risks to my client but he only sees the dollar signs and not the potential consequences. Did your brother's business have any specific government orders that restricted their operations, or was it purely the "supply chain" angle that the ERC company used?

He had to close for about 3 weeks in early 2020 like most retail, but reopened with masks/distancing requirements. The ERC company focused mainly on "supply chain disruptions" claiming his inability to get some inventory items qualified as a partial suspension. The IRS disagreed completely. Their position was that since his overall revenue increased and he found alternative products to sell, he clearly wasn't significantly impacted in a way that qualified. The business had its best year ever during COVID because people were shopping locally instead of at malls.

That's a really good point I hadn't considered. How would I check if my software is using the most current tax rules? Is there some version number or update date I should look for?

Most tax software will show the tax year version somewhere in the settings or about section. Look for something that says "Tax Year 2025" or "Updated for 2025 tax law changes." Some will even show the specific update date. If your software offers a way to view the actual IRS instructions they're using for calculations, that can help too. The most reliable way though is to check the preview of Schedule 8812 from both software programs - they should both reference the same tax year and use identical calculation methods for the Child Tax Credit.

The IRS calculator is decent but it doesn't handle some of the more complex situations. I'd also suggest running the numbers quickly through a third software like Cash App Taxes (formerly Credit Karma Tax) which is completely free regardless of income. Having a third calculation might help show which of your current ones is more likely correct.

Interesting point about international competition. Do other major economies like the EU, Japan, etc. also use flat corporate rates? Or are there any examples of major economies successfully using graduated corporate rates?

Yes, almost all major economies use flat corporate rates. The UK, Germany, France, Japan, Canada - all flat rates with various deductions and credits. China has a flat 25% standard rate with reductions for certain industries or regions. There are very few examples of graduated corporate rates in major economies. South Korea has a modestly graduated system with three brackets (10%, 20%, 22%), and the US actually had a slightly graduated system before the 2017 tax reform with brackets of 15%, 25%, 34%, and 35%, though with income phaseouts that effectively flattened it for many corporations. The trend globally has been toward flatter systems with targeted incentives rather than graduated rates.

Your facts about Amazon aren't quite accurate. While they did pay little federal income tax in some years (2017-2018 notably), that was because they used legal deductions for R&D, stock-based compensation, and carried-forward losses from earlier years when they weren't profitable. They've since paid billions in taxes. The tax code incentivizes certain behaviors like R&D and investment. That's by design, not cheating. And corporate profits that go to executive compensation get taxed as personal income at graduated rates. Stock buybacks now have an excise tax specifically to address that issue.

YES! I had a similar experience with withdrawals! They limited me to $3k per day without warning when I needed to pay for emergency home repairs. When I called customer service, they said I should have read the "digital disclosures" that apparently I agreed to. Never again.

This is really concerning to hear. I've only had the account for about 6 months and haven't tried to make any large transactions until this tax payment. Now I'm definitely reconsidering keeping my money there. Thanks for sharing your experiences.

Does Form 4868 help if you've already calculated your taxes and know the exact amount? I thought that was just for extending the filing deadline, not the payment deadline?

You're exactly right - Form 4868 only extends the filing deadline, not the payment deadline. You still need to pay your estimated tax by the original due date to avoid penalties and interest. However, filing the extension can still be useful in this situation because it gives you more time to sort out the payment issues and properly file your return without the additional pressure of the filing deadline. If there are any complications with the split payments or processing time, at least you won't have the added stress of rushing to complete your return at the same time.