This is true but dangerous advice without context. Even if you're under the threshold, you might still want to file if you had any taxes withheld from paychecks because that's the only way to get a refund of that money. Also, certain credits like the Earned Income Credit require filing to receive them.

Thanks for suggesting H&R Block. I actually tried their free version first before TurboTax, but they also wanted me to upgrade as soon as I entered my 1099-DIV information. Seems like most of the big companies use investments as a trigger for their premium versions.

That's frustrating! These companies are really aggressive with their upselling. Maybe try starting at the IRS Free File page (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) instead of going directly to the tax prep sites. Sometimes the versions you access through the IRS have fewer restrictions.

This is actually really good advice! I switched my small investments to a Roth IRA last year and it made my tax filing so much simpler this year. No more reporting tiny dividends and occasional stock sales.

That's good to know about VITA! Unfortunately with my income at $78,500 I'd still be above the threshold you mentioned. Are there any other community programs with higher income limits?

You're right that at $78,500 you'd be above the standard VITA threshold. Some regions have expanded programs with higher limits, but they're not common. At your income level, your most cost-effective option is probably still using a budget tax preparer like FreeTaxUSA, TaxSlayer, or Cash App Taxes. Even though they're not free for you, they're much cheaper than the premium services and offer essentially the same functionality for most straightforward tax situations.

I used Cash App Taxes (formerly Credit Karma Tax) last year and it worked fine for me. Completely free for both federal and state with no income restrictions. The interface isn't as polished as TurboTax but it gets the job done. Just make sure your tax situation isn't too complex - they don't support some more obscure forms and situations.

Thanks for sharing your experience! That's good to know about the limitations with complex situations. My taxes are pretty simple - just a W-2, some student loan interest, and a small amount of bank interest, so it sounds like it might work for me.

Thanks for raising this point! My divorce was finalized in 2017, so I'm still under the old rules where alimony is taxable income to me and deductible for my ex. That's why I need to figure out the correct year to report it.

Got it! Since you're under the pre-2019 rules, then yes, constructive receipt applies and the experts above are correct - it's 2023 income for you since you received and deposited the check in 2023, regardless of when the funds became available. Just make sure your ex is also treating it as a 2023 payment on their return to avoid any IRS matching issues.

But what if the bank hold was because of insufficient funds in the payer's account? That seems different from a standard hold.

Which tax software do you use? I usually just use the free online ones but I'm willing to pay for something if it'll make this process easier.

I use TurboTax Premier which is specifically designed for investors. It's not the cheapest option, but it directly imports from most brokerages and handles all the stock transactions automatically. H&R Block's Deluxe + State is another good option that's a bit less expensive and also has import capabilities for many investment platforms. If you want a free option, FreeTaxUSA can handle investments too, but you might need to enter summary information manually rather than direct importing.

This is actually not quite right. The composite method doesn't exempt you from reporting - the IRS still needs to be able to match what's on your 1099-B. What you're thinking of is summary reporting which is only available if all your basis was reported to the IRS (covered securities).