We all like the word “free”, but we don't like it when it doesn't apply to us. The Federal Trade Commission said Monday that Intuit, the company behind tax preparation software TurboTax, can no longer promote its service as “free.” Because this is not accurate. Most customers find that they are not eligible to use the free product offered by Intuit and must upgrade to the paid version.
FTC Consumer Protection Director Samuel Levine said in a statement that the commission's opinion and order were “a major victory for consumers and honest marketers.” The opinion says Intuit engaged in a “pervasive, persistent, and intentional” deceptive advertising campaign.
The FTC's opinion noted that TurboTax's advertisements represented its product as free in “numerous advertisements.” The company's “Absolute Zero” ad campaign cited by the committee included the phrase “Free Guaranteed” and the line “At least your taxes are free.”
“The committee issued an order setting clear standards that Intuit must follow,” Levine said. “They must stop their deceptive advertising and tell the truth about how many people actually qualify for products they claim are 'free.' This order also sends a message to the entire industry. “Free'' means free, not “free to some.'' When companies use the power of “free'' in deceptive ways, like Intuit, they face FTC enforcement action. expected to receive.
“Intuit is appealing this deeply flawed decision and believes Intuit will prevail if this matter ultimately returns to a neutral body,” a company representative said in an emailed statement to CNET. “There is,” he said.
“There are no financial penalties associated with the FTC's order, and Intuit does not expect any material impact to its business,” a lengthy statement posted on the company's site said. The company also said it is proud to help more than 124 million Americans pay their taxes for free.
The FTC's announcement is timely, as this year's tax season has just begun with the April 15 tax filing deadline. These are anxious times for many people collecting records, crunching numbers, and filling out tax forms one after another. This is big business for companies like Intuit and H&R Block, as well as accountants across the country. According to industry research firm IBISWorld, tax preparation services brought in $13.9 billion in revenue in 2023.
CNET brings together tax tips and services, including tax preparation software reviews and tax news articles. The 2024 tax season begins on January 29th, the first day the IRS begins accepting his 2023 tax forms. Employers must send the employee her W-2 and 1099 income tax forms by the end of January.
TurboTax $141 million settlement
There is a lot of background to this incident. In May 2022, New York Attorney General Letitia James announced a record multi-state agreement with Intuit, requiring the company to pay $141 million in restitution to millions of consumers across the country and provide “free , Free, Free'' advertising campaign.
Not everyone who used TurboTax in the past few years received their money, but 4.4 million people in all 50 states and the District of Columbia did. These are taxpayers who tried to use the free version of TurboTax for tax years 2016 through 2018, were told they were not eligible to file for free, and continued to pay for the TurboTax product. Each received about $30 each year for tax preparation services that were supposed to be free. The funds were transferred in the summer of 2023.
At the time, Intuit sent a statement to CNET saying the company was “pleased to reach a resolution with state attorneys general that will ensure our company refocuses on providing critical services to U.S. taxpayers now and in the future.” I think so.''
That response was echoed in a lengthy statement posted on Intuit's blog, which said the company did not admit any wrongdoing and had agreed to pay money to “shelve this matter.”
How can I prepare my taxes for free?
Preparing and filing annual taxes can be a headache for many people. However, there are more and more options available for free.
Free options for for-profit tax preparation companies
Some for-profit tax preparation companies still offer free options. This is how this whole mess started. Providers offer a variety of services, so you need to check what exactly is free and which options require payment.
Please note that if you have any tax complications, you may need to upgrade to one of the paid versions of the service. Most allow you to file a 1040, but some provide other basic tax needs.
H&R Block lists the free service as “simple returns only,” meaning 1040 plus limited Schedules 1, 2, and 3. A CNET review of H&R Block's tax preparation products states: “The simple interface makes H&R Block easy to use online, which I especially like.” Alerts you about mistakes when entering your tax information. ”
Other services with free tax preparation options include Intuit's TurboTax (yes, regardless of settlement), TaxSlayer, and TaxAct.
IRS Direct File Pilot
The IRS is rolling out its own free file program called Direct File, but it's limited to 12 states and to people who meet certain eligibility requirements. No one has to use it, but it's another option.
Eligible taxpayers must reside in Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming. This includes most states without a state income tax, as well as states that have implemented or are developing state tax filing solutions. Other states will be added later.
However, just living in a pilot state is not enough to qualify. This is not an option for people who have gig economy or business income, itemize deductions, or claim the child support credit, saver's credit, or premium tax credit. His Direct File page on the IRS site lists details of the income, credits, and deductions you can take for using the free system.
Tax consultation for the elderly
If you are over 60 years old, you may be able to use a system called “Senior Tax Consultation''. (Ignore the negative connotations of the word “elderly”; Brad Pitt is 60 years old.)
The program leverages IRS-certified volunteers to provide free assistance and basic income tax return preparation via e-filing to eligible individuals at regional locations across the country. Our search site allows you to enter your postal code to find a provider near you that offers this free tax support.
If you are under 60 and meet other requirements, you may also receive free tax assistance through VITA, the IRS Volunteer Income Tax Assistance Program. In addition to seniors, this program helps low- to moderate-income individuals (typically those with incomes below her $64,000), people with disabilities, and people with limited English proficiency with tax filing. To do. The same search site helps qualified individuals find providers.
AARP Tax Assistant
Tax-Aide, a similar program from AARP (formerly the American Association of Retired Persons), provides free tax assistance to anyone, but with a special focus on those over 50 or with low to moderate incomes. Masu. There is also a help search site.
Military personnel may require special taxes. The Department of Defense offers a suite of free tax services called MilTax. It includes tax preparation and filing software tailored to military life, with personalized support from tax consultants trained in military-specific tax situations. Interested military personnel can schedule a consultation with a MilTax expert by calling 800-342-9647 or using live chat.