Is there ANY legitimate reason to use one of these companies? Like what if your tax situation is really complicated or you owe hundreds of thousands of dollars?

There are very limited situations where professional representation makes sense. If you're facing criminal tax charges, have a complex business situation with multiple years of unfiled returns, or owe massive amounts (typically $250,000+) with significant assets to protect, then you should hire a tax attorney (not a "tax relief" company). For most people owing under $100,000 with relatively straightforward situations, you can handle it yourself. The IRS has standardized procedures for payment plans, offers in compromise, etc. They follow their own internal guidelines regardless of who's asking. A decent tax preparer can give you guidance for a fraction of what these companies charge.

Yeah I signed a contract but it was so vague about what they actually promised to do. Just said they'd "represent" me and "work toward resolution" without any specifics. I paid by direct withdrawal from my checking account, so I don't think I can dispute it like with a credit card. Been thinking about the BBB complaint though, good idea.

Thanks for bringing that up! Unfortunately, she already closed on the sale in April without setting up a 1031 exchange, and she's planning to retire with the proceeds rather than buying another investment property. I definitely should have mentioned that in my original post. I'm more concerned with making sure I've got the tax calculation right so she knows exactly what she'll owe. I realized I should also check if she's eligible for any state-specific tax breaks since this is a pretty significant capital gain and she's in her 70s.

Yes, that's an important consideration. The bonus depreciation taken would still be subject to recapture, but at ordinary income tax rates (not just the 25% rate that applies to straight-line depreciation). Make sure you separate out the portion that was taken as bonus depreciation from the regular depreciation when calculating the tax. Also remember that for improvements made in 2020, they would have been eligible for 100% bonus depreciation, so likely the entire cost was written off in that year. You'll need to recapture all of that at ordinary income rates.

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.

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.

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.

I had the same issue last week. There's actually a known bug in the current version that affects the PTC calculation if you enter the information through certain screens. Try entering it directly through Form 8962 instead of the Federal Information Worksheet and see if that fixes it.

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.