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I had the same issue last year! The confusion comes from how FreeTaxUSA displays the information. The Earned Income Credit (EIC) is already included in your "TOTAL PAYMENTS" - that's why that number matches your EIC amount exactly. So your tax calculation is: Total Tax ($832) - Total Payments ($420) = Amount Owed ($412) If you weren't eligible for the EIC, your Total Payments would be $0 and you'd owe the full $832. So the credit is definitely working for you! FreeTaxUSA could definitely make this clearer in how they display it. TurboTax shows it differently which makes it easier to understand, but they charge way more for self-employment filing.
Is FreeTaxUSA good for self-employment returns? I've been using TurboTax but the fees are killing me for the self-employment version.
FreeTaxUSA is actually really good for self-employment returns and WAY cheaper than TurboTax. They include all the Schedule C forms and self-employment calculations in their free federal filing. You only pay for state filing (around $15). The interface isn't quite as polished as TurboTax, but it has all the same features for self-employment. It walks you through business income, expenses, home office deductions, vehicle expenses - everything TurboTax does but without the ridiculous upcharge for self-employment features. I switched three years ago and have saved at least $200 in tax prep fees since then.
Wait, I'm confused about something. If your total tax is $832 and your EIC is $420, then yes, you would owe $412. But where does the self-employment tax fit in? Is that part of the $832 or separate? I'm self-employed too and always confused about how all these numbers work together. Anyone know a simple way to understand this?
The self-employment tax is included in that $832 "Total Tax" amount. It's actually made up of two parts: 1. Self-employment tax (15.3% of your net self-employment income) 2. Income tax (based on tax brackets, but likely $0 in OP's case because of the standard deduction) Since their income after the standard deduction is $0 for income tax purposes, the entire $832 is probably just self-employment tax. The confusing part is that you still owe self-employment tax even when you don't owe income tax. Self-employment tax starts from dollar one of profit, while income tax only kicks in after your income exceeds the standard deduction.
Quick tip for anyone still looking - Form 3895 in Proseries 2023 can also be accessed through the Smart Worksheet function. Just type "3895" in the Smart Worksheet search bar and it will take you to the right input screen. Saved me a ton of time once I figured this out!
Does this Smart Worksheet trick work for finding other hidden forms too? I'm new to Proseries and still learning all the shortcuts.
Yes! The Smart Worksheet search is actually the fastest way to find any form in Proseries. It works for pretty much everything - just type the form number or even keywords like "depreciation" or "health insurance" and it pulls up relevant forms and input screens. For new Proseries users, I also recommend using the "Recent Forms" dropdown which shows the last 10-15 forms you've accessed. Between these two features, you'll rarely need to dig through the regular menus once you get comfortable with the software.
Is anyone else noticing that even after entering the Form 3895/1095-A information, the Premium Tax Credit calculation seems off? I've entered everything correctly but the numbers don't match what my clients received on their actual forms.
Has anyone used those online "quit claim deed" services to transfer property? I'm in a similar situation and wondering if we need a lawyer or if those DIY services are good enough for a simple transfer between family members.
DON'T use those online services for property transfers!!! My cousin did that last year to add his son to his deed and completely messed up the title. Cost him $3,800 in lawyer fees to fix it. Definitely get a real estate attorney for this - way cheaper than fixing mistakes later.
Just a heads up since I went through this recently - make sure your mom doesn't file her gift tax return (Form 709) herself unless she's really comfortable with tax forms. My dad tried to DIY it and actually reported the gift incorrectly which caused a whole mess. Either get a CPA or make sure you're using good tax software that handles gift tax returns. It's not super complicated but there are a few tricky sections that are easy to mess up.
Just my 2 cents - I've used both Tax Slayer and Free Tax USA. For me Free Tax USA wins hands down. The interface isn't as pretty but it's WAY more transparent about what's happening with your taxes. Tax Slayer kept trying to upsell me on stuff I didn't need. One thing to watch out for with Free Tax USA is that if you have HSA contributions, make sure you enter them correctly. The form is a bit confusing and I almost double-counted mine last year which would have messed up my return.
One thing to consider is audit support! I used Free Tax USA last year and got a letter from the IRS questioning some of my deductions. Free Tax USA's help section had exactly what I needed to respond correctly, but they don't provide direct representation if you get audited unless you pay extra for their "Audit Defense" add-on when you file. Not sure about Tax Slayer's audit support, but worth looking into if that's a concern for you!
Abigail Patel
Another approach - you could also just manually calculate your mortgage interest deduction instead of using the 1098 form input in H&R Block. Add up all the interest you paid from your monthly statements and enter it as a lump sum. Tax software tries to be helpful with those form inputs but sometimes it creates unnecessary restrictions. Remember that the 1098 is just information reporting - what matters is the actual interest you paid during the tax year.
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Dylan Fisher
ā¢Would this cause any issues with the IRS matching systems? I'm worried that if I don't enter the exact forms as they were sent to the IRS, it might trigger some kind of mismatch or audit flag.
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Abigail Patel
ā¢It shouldn't cause issues as long as the total interest amount you claim matches what was reported on your 1098 forms. The IRS matching system is primarily concerned with the total interest amount, not how you entered it into your tax software. That said, it's always best to keep copies of your 1098 forms and mortgage statements to document exactly how you calculated your deduction in case you're ever questioned. As long as you can show that your total claimed interest matches what was reported to the IRS, you should be fine.
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Daniel White
Has anyone run into this issue with TurboTax? I'm experiencing the same thing with my mortgage that was sold twice last year, but using TurboTax instead of H&R Block.
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Nolan Carter
ā¢I had this issue with TurboTax last year. What worked for me was entering the forms separately and when it wouldn't accept the $0 principal, I just put $1 instead. Then for the form from my new lender, I entered the correct principal balance as of year-end. TurboTax combined the interest amounts correctly for my deduction.
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