1040.com Review – Easy and Affordable
When it comes to online tax preparation software, 1040.com has a huge advantage over everyone else – they’ve got a great domain name. Named after the Federal tax form that every taxpayer has to file, 1040.com has online tax preparation software to help just about anyone. They’re not just some Johnny-come-lately, either – 1040.com is owned by Drake Software, which makes some of the most highly regarded commercial tax preparation software on the market. 1040.com is their consumer product, and they’ve made it easy to access, easy to use and generally affordable for everyone. Read on for our full 1040.com review.
1040.com Tax Software Overview
Drake Software makes tax filing products for commercial tax preparers, but they also have products for individual taxpayers, which they provide through their 1040.com site. Like most companies offering tax preparation products, they offer several different versions of the software which are tailored to the needs of their customers.
As part of the Free File Alliance, 1040.com offers a free edition of their software to help taxpayers file their Federal income taxes. Of course, no one makes any money allowing people to file their Federal income tax returns for free, so there are some restrictions as to who can use the Free Federal edition. There are perhaps a dozen different criteria that you must meet in order to qualify, but in general:
- You must earn less than $100,000
- You claim no dependents
- You and your spouse are under 65
- You are not in bankruptcy
- Your income is primarily from W2 wages
- No credits other than Earned Income Credit
If you meet these (and all other) criteria, you may file your Federal taxes for free. State taxes are extra, and at present time are priced at $19.95.
1040.com Basic Edition
The 1040.com Basic Edition is going to cover many of those of those who do not qualify for the Free Edition. Like the Free Edition, the 1040.com Basic Edition still covers only those who earn less than $100,000 per year and only those who take the standard deduction only and is not using itemized deductions. This version does allow for some adjustments to income, such as an IRA deduction, Student Loan Interest deduction, tuition and fees deductions and educator deductions. Additionally, the Basic Edition also allows you to claim certain tax credits besides the Earned Income Credit, such as Child and Dependent Care Credit or Retirement Savings Contribution Credits. As with the Free edition, state filings are separately priced at $19.95.
1040.com Deluxe Edition
The 1040.com Deluxe Edition is going to cover everyone who does not qualify for either the Free or the Basic editions. Currently priced at $39.95, the 1040.com Deluxe Edition allows for any amount of income, itemized deductions, business expenses and income, rental property income, self-employment income, stock adjustments, and pretty much anything else that might come up on either a typical or atypical tax return. As with the other editions above, the state returns are priced separately at $19.95.
Using the methods employed by a number of other tax preparation products, 1040.com works you through your return by asking you a series of questions. This interview-style method uses your answers to determine which forms you’ll need to fill out and file, making it easy to get your taxes done in a relatively small amount of time. Online support is available and the Website has a number of helpful articles regarding taxes and tax filing. Once you are done, you can file your return electronically as well as print out a copy of your return for your own records. The 1040.com site also includes a tax calculator to show you how much you’ll have to pay in penalties if you aren’t covered with health insurance as required by the Affordable Care Act.
One interesting feature of 1040.com tax software is that even if you’re using one of the paid versions of the product, you won’t have to actually pay any money out of your pocket to use it. The company’s E-Collect feature allows you to pay by allowing 1040.com to deduct their fees from your anticipated refund. They do note that fees may apply when using this feature, but for those who don’t want to pay up front, it’s a nice option.
While 1040.com offers an affordable product that’s easy to use, we need to remind you that no tax software is perfect, and no tax software can forsee all possible situations. Most software is designed for the typical scenarios encountered by the majority of taxpayers. While the software used at 1040.com can accommodate you when you provide information regarding tax deductions, it cannot know about every tax deduction for which you could be eligible. That’s not a problem with the tax software, that’s a problem with your tax strategy. The law allows hundreds or even thousands of ways to legally deduct expenses from your income and every extra deduction you take means less taxes that you pay.
The problem with that situation is that most taxpayers don’t have a clue as to what deductions they may qualify to take. That’s not ignorance; it’s simply a matter of the tax code being so enormous and complex that the average taxpayer doesn’t have time to think about it, let alone read it and understand it.
It turns out, however, that you and everyone else are probably paying more in taxes than you should be, and that you could be taking a lot more deductions, and thus, paying less in taxes, than you currently are. If you only knew which deductions you were entitled to take, you’d take them, right? No one wants to voluntarily pay more in taxes than they’re required to.
Well, there is a way to easily find out what deductions you can be taking, and it won’t confuse you with legalese. You’ll be shown what to do and how to do it in plain, easy to understand English. Once you find out what deductions to take, then you can use software such as 1040.com to do the rest.