If you are still working on filing your taxes this year, you will have another month to file this year. The IRS announced that they will be moving the tax filing deadline from April 15 to May 17, 2021. In addition the deadline for tax payments, like quarterly self-employment taxes, has also been pushed to May 17.

Of course, there are always a multitude of options when filing your taxes. Here’s a few options:

The Best Free Options, $72,000 and under:

If you made less than $72,000 over 2020, you can visit the Free File page on the IRS site. That site provides nine software options on third party sites. Read each option carefully to see if you qualify. Many of the options are limited to a specific age range, state or even dollar figure.

For instance, the TurboTax’s popular software caps the limit at $39,000 rather than $72,000 unless you eligible for the Earned Income Tax Credit. Alternatively, Free1040TaxReturn.com offers the $72,000 limit to anyone under 70, assuming you don’t live in fourteen excluded states.

Some of these sites will also offer free state returns, but others will charge. It’s recommended that you search your state’s website for information regarding free filing options for state taxes.

The Best Free Option, over $72,000:

If you make more than $72,000 in your household, you can also just enter your tax information into the paper forms using FreeFile. Of course, this is significantly more complex as you have to understand how tax forms work rather than answering questions in tax software. However, you can use your tax forms (completed with tax software from previous years) to figure out where to fill out data correctly.

In addition, this is the fifth year that Credit Karma has offered this service. According to the signup page, the service will be completely free. Specifically, they claim to offer free federal & state filing, no additional fees for using the service and have a support staff on hand to answer questions.

The Cheapest Software Options:

If your taxes are very complicated and requires lots of itemizing, you may want to invest in TurboTax. This would be more ideal for anyone that’s a small business owner or has to deal with investments like rental property. The downside is that you will have to pay up to $130 for the right software as an additional $50 when filing your state taxes.

There are also some perks to consider with more expensive software. Some tax software has an auto-import feature that pulls all W2 information in without having to enter it line by line. Other features included in some tax software are audit-checks, saving tax info online and the ability to load your refund onto a Visa prepaid card or a store gift card.

Here’s a quick breakdown on costs for the top five tax software options:

• TurboTax – Federal: $70 to $130
• TaxAct – Federal: $45 to $80
• TaxSlayer – Federal: $25 to $55
• H&R Block – Federal: $50 to $110
• Jackson Hewitt – Federal: $49 (includes state as well)

Bonus Saving Tip!

Check your credit card for % off bonuses or $ off bonuses when using a specific tax software option. For instance, American Express is offering a cardmember perk that offers 30% cashback when filing with TaxAct.

Do You Even Need to File?

Just a reminder, you may not need to file a tax return if you make less than $12,400 per year (under age 65). Here’s a chart that breaks down income thresholds for filing.

However, you may want to considering filing anyway, especially if you can tax advantage of credits like the American Opportunity credit in addition to qualifying for any COVID- related stimulus payments. That could help you get a little extra money back this year.

Are There Deals on Tax Software?

Yes. Turbotax and HR Block software packages will go on and off sale frequently starting in late January through the end of tax season. Look for deals in the Ben’s feed here from retailers such as Amazon and Newegg.

IRS extends 2021 tax filing deadline to May 17

Photo by Vladimir Solomyani on Unsplash

If you are a host who uses Airbnb or other short-term rental websites to rent out a spare room or your entire home, you might want to carefully check that your taxes are filed correctly this year.

Safe to say, Airbnb has become the go-to service for consumers looking for an alternative to traditional hotels. At the same time, Airbnb allows hosts to earn additional income by short-term renting a house, apartment or spare room. But many hosts might not know that Airbnb earnings aren’t simply “free money.” In the U.S., hosts are required to pay taxes on short-term renting earnings – even if the host does not own the property.

To help demystify the specific tax rules that apply to Airbnb hosts, Nolo, a resource for legal guides and advice for consumers and businesses, recently published Every Airbnb Host’s Tax Guide. This first-of-its-kind tax guide is specifically written for short-term rental hosts by tax expert and attorney Stephen Fishman.

If your home or room was rented out for less than 14 days, you’re in luck, as any money you gained is completely tax-free. However, the majority of hosts rent rent out their places for longer than two weeks, so if that’s you, here are three of the most valuable takeaways for Airbnb hosts to save money this tax season, according to Fishman.

How the Tax Cuts and Jobs Act affects Airbnb hosts

The new tax law allows you to deduct expenses without it counting toward the personal deduction limit of $10,000. In addition, hosts are also able to deduct rental expenses like fees paid to a rental agency and the cost of cleaning and repairs on the space you are renting out.

What if you don’t report your short-term income to the IRS?

As you might suspect, there are consequences if you don’t report your income accurately, which Fishman warns can leave you with hefty fines.

“If you don’t report your short-term rental income and the IRS discovers it, you’ll have to pay taxes on the income, plus interest and penalties,” says Fishman. “You could have to pay a negligence penalty of 20% of what you underpaid. This can really add up.”

It’s not just Airbnb that is taxed

Lastly, don’t forget that the new tax laws apply to all short-term rental services, such as VRBO and HomeAway – not just Airbnb.

You can get 20% off Every Airbnb Host’s Tax Guide from the Nolo website by adding this code at checkout: bbanb20

Money-saving tips for Airbnb hosts this tax season

It’s almost tax time again! The IRS has been accepting 2017 tax returns for the past couple months. Interestingly, there are a couple additional days to file taxes this year due to April 15 falling on a Sunday as well as the District of Columbia’s Emancipation Day holiday. That pushes the traditional April 15 deadline to April 17, 2018.

Of course, there are always a multitude of options when filing your taxes. While free is always preferred for Americans under a specific income threshold, we are also going to break down the top software options for knocking out those pesky taxes on a lazy Sunday.

The Best Free Options, $66,000 and under:

If you made less than $64,000 over 2017, you can visit the Free File page on the IRS site. That site provides thirteen software options on third party sites. Read each option carefully to see if you qualify. Many of the options are limited to a specific age range, state or even dollar figure.

For instance, the TurboTax’s popular software caps the limit at $33,000 rather than $64,000 unless you eligible for the Earned Income Tax Credit. Alternatively, Free1040TaxReturn.com offers the $64,000 limit to anyone under 70, assuming you don’t live in five excluded states.

Some of these sites will also offer free state returns, but others will charge. It’s recommended that you search your state’s website for information regarding free filing options for state taxes.

The Best Free Option, over $66,000:

If you make more than $66,000 in your household, you can also just enter your tax information into the paper forms using FreeFile. Of course, this is significantly more complex as you have to understand how tax forms work rather than answering questions in tax software. However, you can use your tax forms (completed with tax software from previous years) to figure out where to fill out data correctly.

In addition, this is the second year that Credit Karma has offered this service. According to the signup page, the service will be completely free. Specifically, they claim to offer free federal & state filing, no additional fees for using the service and have a support staff on hand to answer questions.

Disclaimer: Credit Karma has some issues during 2017 with tax returns, but it’s likely the service has worked out the issues over the past year. Here’s a Reddit review thread for this year.

The Cheapest Software Options:

TaxAct remains the champion for the least expensive, basic tax software at between $15 for federal filing and $17 for state filing. It’s also highly competitive (feature-wise) to H&R Block as well as TurboTax, particularly ideal for anyone that’s filing a simple return. It’s a little less intuitive for people that are self-employed or have lots of investment income, but it will do the job with a little digging. It’s our pick for the best option for most users.

If your taxes are very complicated and requires lots of itemizing, you may want to invest in TurboTax. This would be more ideal for anyone that’s a small business owner or has to deal with investments like rental property. The downside is that you will have to pay up to $120 for the right software as an additional $37 when filing your state taxes.

There are also some perks to consider with more expensive software. Some tax software has an auto-import feature that pulls all W2 information in without having to enter it line by line. Other features included in some tax software are audit-checks, saving tax info online and the ability to load your refund onto a Visa prepaid card or a store gift card.

Here’s a breakdown on costs for the top five tax software options:

• TurboTax – Federal: $60 to $120 / State: $40
• TaxAct – Federal: $15 to $70 / State: $17 to $40
• TaxSlayer – Federal: $24 to $47 / State: $29
• H&R Block – Federal: $50 to $95 / State: $40
• Jackson Hewitt – Federal: $55 to 75 / State: $40

Do You Even Need to File?

Just a reminder, you may not need to file a tax return if you make less than $10,350 per year (under age 65). Here’s a chart that breaks down income thresholds for filing. However, you may want to considering filing anyway, especially if you can tax advantage of credits like the American Opportunity credit. That will help you get a little money back this year.

Are There Deals on Tax Software?

Yes. Turbotax’s software packages will go on and off sale frequently starting in late January through about early April. Look for deals in the Ben’s feed here from retailers such as Amazon and Dell.

The Cheapest Ways to File your Taxes this Year