Are there actually legitimate free tax filing products that don't share your data?

Thanks for the info! But when I tried going through the IRS Free File last year, I ended up getting charged $39.99 for state filing even though I was below the income threshold. Is there any way to avoid that or is state filing always extra cost even through the Free File program?

The Free File program should include state returns for free if you access it directly through the IRS portal. What likely happened is you may have inadvertently gone to the company's regular website instead of through the IRS Free File portal, which is a common issue. Always start at the IRS.gov/FreeFile page and use the lookup tool there to find and click through to the appropriate service. The companies often have similar-looking "free" editions on their main websites, but those typically charge for state filing or have other limitations that the official Free File versions don't have.

Does it handle state taxes too? Most "free" ones I've tried hit you with charges when you get to the state part. Also, how does it handle reporting crypto? I've got a bit of that to report this year.

I'm always skeptical of these "free" services. What's the catch with this one? Are they selling your data or something? There's always some way they make money off your information.

Yes, it handles state taxes too! That was actually one of my concerns as well, but they included my state return at no cost. The whole federal and state process was completely free for me. As for the catch, I was worried about that too, but they're pretty transparent about their business model. They offer premium features for more complex returns, but for basic situations like W2 income and some investments, it's genuinely free. I didn't see any evidence of data selling, and they have a pretty clear privacy policy that explains how they use information.

How does this actually work? Does it just call the IRS for you or something? I don't understand how they can get you through faster than calling yourself.

Yeah right. There's no way to "skip the line" with the IRS. Sounds like a scam to get your personal info or money. The IRS wait times are terrible for everyone - that's just how it is.

It does call the IRS, but uses an automated system that navigates the phone tree and waits on hold for you. Then when an agent finally picks up, it calls your phone and connects you directly to that agent. So you don't have to sit listening to the horrible hold music for hours. I was definitely skeptical too! I thought it had to be some kind of scam, but after trying to get through to the IRS myself multiple times without success, I was desperate. It's not about "skipping the line" - you still wait your turn, but their system does the waiting instead of you having to stay on the phone yourself.

Does it handle multiple state filing? I moved mid-year and now have to file in two states which is causing me headaches with other "free" options.

Yes, Cash App Taxes does support multiple state filing for free, which is pretty rare among free filing services. I haven't personally used that feature since I've only needed one state, but it's definitely included in their free package. It's worth noting though that their interface for multiple states isn't quite as user-friendly as some paid options. You might need to be a bit more careful making sure you're allocating income correctly between the states. But for the price (free), it's hard to complain too much.

I used FreeTaxUSA last year and it was great! Federal was completely free and state was only $14.99. The interface is simpler than TurboTax but honestly that made it less confusing. It handled my W2 and some stock sales without any problems.

Thanks for sharing your experience @Michael Green! This is exactly the kind of real-world advice I was hoping to find. I'm actually in a very similar situation to the original poster's daughter - just started my first job after college and need to figure out how to file taxes myself instead of having my parents handle everything. Your point about starting at the official IRS.gov/FreeFile portal is really important. I almost made the same mistake last week when I was researching options - I went directly to one of the tax software websites and was about to sign up for their "free" version before reading this thread and realizing I needed to go through the IRS portal instead. I'm curious though - when you were entering the investment information from your 1099 forms, did the software automatically calculate things like capital gains/losses, or did you have to figure out those numbers yourself beforehand? I have a small brokerage account with some mutual fund sales from last year and I'm not entirely sure how to calculate the gains correctly.

@Ava Thompson Great question! The software actually does all the capital gains/losses calculations for you automatically - you just need to enter the information from your 1099-B forms exactly as they appear. Your broker should have sent you a 1099-B that shows each sale transaction with the date you bought the investment, the date you sold it, your cost basis what (you paid ,)and the proceeds what (you received .)The tax software takes those numbers and automatically figures out whether each transaction was a short-term or long-term gain/loss based on how long you held the investment, then calculates the totals for you. It was actually much easier than I expected! One tip - if you sold mutual fund shares, make sure your broker reported the cost basis correctly on the 1099-B. Sometimes there are different methods for calculating cost basis like (FIFO or average cost and) you want to make sure you re'using the same method your broker used. But honestly, for most basic situations like ours, the numbers on the 1099-B are usually correct and you can just enter them directly into the software.

@Ava Thompson Great question! The software actually does all the capital gains/losses calculations for you automatically - you don t'need to figure out those numbers beforehand. When you enter the information from your 1099-B which (your broker sends you ,)the software pulls the purchase price, sale price, and dates, then calculates whether it s'a short-term or long-term gain/loss and does all the math. For mutual fund sales, your broker should provide a 1099-B that shows each transaction. Some brokers even provide the data in a format that can be imported directly into the tax software, which makes it even easier. If you have a lot of transactions, this import feature can save you tons of time versus entering each sale manually. The software will also automatically put the gains/losses on the correct tax forms like (Schedule D and) flow the totals to your main return. It really takes the complexity out of investment reporting for straightforward situations like ours. Just make sure you have all your 1099 forms from your broker before you start filing - they re'usually available online by early February.

@Ava Thompson The software automatically calculated everything for me! That was one of the things I was most worried about going into it, but it turned out to be much simpler than I expected. When you enter your 1099-B information that (s'the form your broker sends for investment sales ,)the software pulls in all the details like your cost basis, sale price, and sale dates. Then it automatically determines whether each transaction was a short-term or long-term capital gain/loss and does all the math for you. You just need to enter the numbers exactly as they appear on your 1099-B forms. The one thing to watch out for - make sure your broker reported the cost basis correctly on your 1099-B. Sometimes for older investments or transfers between brokers, the cost basis might show as not "reported and" you ll'need to look up your original purchase information. But for most mutual fund sales, especially recent ones, everything should be clearly listed on the form. TaxSlayer also has a really helpful feature where you can import investment information directly if your broker supports it, which saves you from having to type in all those numbers manually. Made the whole process much faster and reduced the chance of typos!

@Ava Thompson The software automatically calculated all the capital gains/losses for me! That was actually one of the things I was most worried about before filing. When you get your 1099-B from your broker, it should show the sales proceeds and cost basis for each transaction. The tax software has a section where you can either manually enter each sale or import the information directly some (brokers support automatic import .)Once you input the basic information - what you sold, when you bought it, when you sold it, and the cost basis - the software automatically calculates whether it s'a short-term or long-term gain/loss and does all the math. The software also totals everything up and applies it to the right sections of your tax return automatically. I was pleasantly surprised at how straightforward it was - much less intimidating than I expected! The key is just making sure you have all your 1099 forms from your broker before you start, since those have all the numbers you need.

@Ava Thompson The software actually does all the capital gains/losses calculations for you automatically! That was one of my biggest concerns too since I had no idea how to figure out the math myself. When you enter the information from your 1099-B form which (your broker should send you ,)the software takes the sale proceeds and cost basis that s'already listed on the form and calculates whether you had a gain or loss. It also automatically determines if it s'short-term or long-term based on how long you held the investments. For mutual fund sales, it s'even easier because most brokers now report the cost basis directly to the IRS, so all that information should already be on your 1099-B. You literally just enter the numbers from the form and the software handles all the calculations and puts everything on the right tax forms. The one thing to double-check is that your broker used the right cost basis method like (FIFO vs specific identification ,)but for small accounts with basic mutual fund transactions, the default method is usually fine. The software will show you a summary of all your transactions before you finalize everything, so you can review it to make sure it looks reasonable.

@Ava Thompson Great question! The software actually does all the capital gains/losses calculations automatically, which was a huge relief for me. You just enter the information exactly as it appears on your 1099-B form from your broker - things like the date you bought the shares, date you sold them, sale proceeds, and cost basis. The tax software then automatically determines whether each sale was a short-term or long-term gain/loss and calculates the tax implications accordingly. It even generates the required Schedule D form behind the scenes. I was worried I d'have to figure out all those calculations myself, but the software handled everything once I input the raw data from the 1099-B. One tip that helped me: if you re'unsure about any numbers on your 1099-B, most brokers also provide a year-end tax summary that breaks down your total gains/losses in an easy-to-read format. This can be helpful for double-checking that you ve'entered everything correctly before submitting your return. The whole process took me maybe 20 minutes to enter all my investment data, and that included a few mutual fund sales and some dividend income. Much simpler than I expected!

@Ava Thompson The software actually does all the heavy lifting for calculating capital gains and losses! You don t'need to figure out the math yourself beforehand. When you enter the information from your 1099-B which (your broker should send you ,)the tax software automatically calculates whether each sale was a gain or loss, and whether it s'short-term held (less than a year or) long-term held (more than a year .)The 1099-B form from your broker will show the proceeds from each sale and usually the cost basis what (you originally paid as) well. You just enter those numbers into the software and it handles all the calculations. If for some reason the cost basis isn t'reported on your 1099-B, you might need to look up your purchase records, but most major brokers include everything you need on the form these days. One tip that helped me - gather all your tax documents first before starting the filing process. Having your W-2, 1099-DIV if (you received dividends ,)and 1099-B all in front of you makes the whole process much smoother than trying to hunt down information as you go.

@Ava Thompson The software actually does all the capital gains calculations for you automatically! That was one of the things I was most worried about before filing, but it turned out to be much simpler than I expected. When you enter the information from your 1099-B form which (your broker should send you ,)the software takes the sale proceeds and cost basis that are already listed on the form and calculates the gain or loss for you. It also automatically determines whether each transaction is short-term or long-term based on how long you held the investment. The only thing you might need to double-check is if your broker didn t'report the cost basis to the IRS this (usually only happens with older stocks bought before 2011 .)In that case, you d'need to look up your original purchase price, but for mutual funds bought recently, this shouldn t'be an issue. One tip that really helped me: I gathered all my tax documents W-2, (1099-DIV, 1099-B, etc. before) starting the software so I could just work through them systematically. Having everything in front of me made the whole process feel much more manageable and less overwhelming.

@Ava Thompson Great question! The software actually handles all the capital gains/losses calculations automatically, which was a huge relief for me. When you enter the information from your 1099-B form, you just input the numbers exactly as they appear on the form - things like the sale proceeds, cost basis, and sale dates. The software then automatically calculates whether each sale resulted in a gain or loss, and whether it s'short-term or long-term based on how long you held the investment. What really impressed me was that it also automatically fills out Schedule D the (capital gains form and) transfers the totals to the main tax return. I was dreading having to figure out all those calculations myself, but the software made it completely painless. One tip: make sure you have all your 1099-B forms from your broker before you start. Some brokers send multiple 1099-B forms if you had sales from different types of accounts, and you ll'need to enter information from each one. The software keeps a running total as you go, so you can see exactly how your investment activity affected your overall tax situation.

@Ava Thompson Great question! The software actually does all the capital gains/losses calculations automatically - you don t'need to figure out the numbers yourself beforehand. When you enter the information from your 1099-B form, it shows the purchase price, sale price, and dates, and TaxSlayer calculated everything for me including whether gains were short-term or long-term. What really helped was that it showed me the calculations step by step, so I could see exactly how it arrived at the final numbers. For mutual fund sales, it s'usually pretty straightforward since the 1099-B from your broker will have all the cost basis information already calculated. The software just takes those numbers and puts them in the right places on your tax forms. One thing that surprised me was how much the software explained along the way. When I entered my mutual fund sale, it actually showed me a little popup explaining the difference between short-term gains taxed (as regular income and) long-term gains lower (tax rate ,)which helped me understand why the dates mattered. Really made the whole process feel educational rather than just mechanical number-entering.

@Ava Thompson Great question! The software actually does all the capital gains/losses calculations for you automatically - you don t'need to figure out those numbers beforehand. When I entered my investment information, I just had to input the data exactly as it appeared on my 1099-B form things (like the sale price, date sold, cost basis, etc. and) TaxSlayer calculated whether it was a gain or loss and whether it qualified as short-term or long-term. The really helpful part was that it explained the difference between short-term held (for one year or less and) long-term held (for more than one year capital) gains as I was entering the information. For mutual fund sales, your broker should have provided all the necessary information on your 1099-B, including the cost basis, so you re'basically just copying numbers from the form into the software. One tip: if you have multiple transactions, the software can usually import the data directly from a file provided by your broker, which saves a lot of manual entry time. Most major brokers offer downloadable tax files that work with the popular tax software programs.

@Ava Thompson The software actually handles all the capital gains/losses calculations automatically! That was one of my biggest worries too, but it turned out to be much simpler than I expected. When you enter the information from your 1099-B which (your broker sends you ,)the software pulls in all the necessary details - purchase dates, sale dates, cost basis, and sale proceeds. It then automatically calculates whether each transaction was a short-term or long-term gain/loss and does all the math for you. The only thing you need to make sure of is that your broker reported the cost basis correctly on the 1099-B. Most major brokers do this automatically now, but it s'worth double-checking against your own records if you have them. If for some reason the cost basis is missing or incorrect on the form, the software will prompt you to enter it manually. One tip that helped me: gather all your 1099 forms before you start the filing process. I had a 1099-DIV for dividends and a 1099-B for the mutual fund sales, and having them all in front of me made the whole process much smoother. The software basically just asks you to transcribe the numbers from the forms into the corresponding fields.

@Ava Thompson The software actually does all the capital gains/losses calculations for you automatically! When you enter the information from your 1099-B form, you just input the numbers exactly as they appear on the form - things like the proceeds from sales, the cost basis, and the dates. The software then figures out whether each transaction was a short-term or long-term gain/loss and does all the math. What made it even easier was that my brokerage Fidelity (actually) provided a summary sheet that broke down all my transactions in a format that matched exactly what the tax software was asking for. Most major brokers do this now, so check if yours provided something similar - it makes the whole process much more straightforward. The only thing I had to be careful about was making sure I didn t'double-count anything. Some transactions appeared on multiple forms, but the software has built-in checks that usually catch those kinds of errors. Overall, the investment portion took me maybe 15 minutes even though I was worried it would be the most complicated part!

@Ava Thompson The software actually handles all the capital gains/losses calculations automatically! That was one of my biggest concerns too when I first started. When you get your 1099-B from your broker, it will show all your sales transactions for the year. The tax software has you enter the information from that form or (sometimes you can import it directly ,)and it automatically calculates whether each sale was a gain or loss, and whether it s'short-term held (less than a year or) long-term held (more than a year .)For mutual fund sales specifically, the 1099-B should show your cost "basis -" basically what you originally paid for the shares you sold. The software takes that cost basis, compares it to what you sold the shares for, and calculates the gain or loss automatically. You don t'have to do any of the math yourself! The only thing to double-check is that your broker reported the correct cost basis on the 1099-B. Sometimes if you transferred investments from another account or bought shares over multiple years, the cost basis calculation can get a bit complicated, but for straightforward mutual fund purchases and sales, it s'usually accurate.

@Ava Thompson The software actually handles all the capital gains/losses calculations automatically! You don t'need to figure out the math yourself beforehand. When you enter your 1099-B information, the tax software pulls the purchase price cost (basis and) sale price directly from the form, then calculates whether you had a gain or loss and whether it s'short-term or long-term based on how long you held the investment. Your broker should provide all the necessary information on the 1099-B form, including the dates you bought and sold the mutual fund shares and the cost basis. The software then walks you through entering this information field by field. It even explains the difference between short-term gains held (less than a year, taxed as regular income and) long-term gains held (more than a year, taxed at lower capital gains rates .)One thing that helped me was having all my tax documents organized before starting - W-2, 1099-DIV for any dividends, and 1099-B for the sales. The software makes it really clear which document each piece of information should come from, so you re'not guessing about where to find the numbers you need.

@Ava Thompson The software actually does all the capital gains/losses calculations for you automatically! That was one of my biggest concerns too when I started the process. When you get your 1099-B from your broker, it will show all your sales transactions for the year. You just enter the information exactly as it appears on the form - the software takes care of matching up your sales with your purchase prices cost (basis and) calculating whether each transaction was a gain or loss, plus whether it s'short-term or long-term based on how long you held the investment. The really helpful part was that TaxSlayer would show me a summary after I entered each 1099-B, breaking down my total gains/losses so I could see exactly what was happening with my taxes. It made the whole process much less intimidating than I expected. One tip: make sure you have all your 1099 forms before you start filing. Brokers have until the end of February to send them out, so if you re'missing any, it s'worth waiting rather than having to amend your return later.

@Ava Thompson The software actually handles all the capital gains/losses calculations automatically! You just enter the information directly from your 1099-B form that your broker sends you. The form will show your proceeds from sales, your cost basis what (you originally paid ,)and the software does all the math to determine if you have gains or losses. What made it really easy was that TaxSlayer asked me to upload a photo of my 1099-B form, and it automatically populated most of the fields. For the few things it couldn t'read clearly, I just had to type in the numbers from specific boxes on the form. The software then categorized everything as short-term or long-term gains based on how long I held the investments. The mutual fund sales should work the same way - your broker will provide all the necessary information on the 1099-B, including the adjusted cost basis. You don t'need to calculate anything yourself beforehand. Just make sure you have all your tax documents from your broker before you start filing, and the software will walk you through exactly where each number goes. One tip: if you re'unsure about any numbers on your 1099 forms, most brokers have customer service lines specifically for tax questions during filing season. I called mine once to clarify something and they were really helpful in explaining what each section meant.