Do You Qualify for a Simple Tax Return? Here’s How To Know

Dad working on taxes.
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Tax season is a whole lot cheaper and easier for people who file simple returns. Those who qualify for simple tax returns can file for free in just a few minutes with some of the top software providers and even directly through the IRS.

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There’s no simpler or less expensive way to give Uncle Sam his cut, so if you can file a simple return, you should. Here’s what you need to know about qualifying for one and the best ways to file for free if you do.

What Makes a Simple Return Simple?

A simple tax return is the most basic way to report income to the IRS and your state. It’s for people who go to a job, collect a paycheck and not much else. The top tax software providers all have their own standards for their free versions, but generally, a simple tax return is filed using only IRS Form 1040 without any added complexity. You probably qualify for a simple return if your taxes are limited to:

  • W-2 income
  • Limited dividend and interest income reported on a 1099-DIV or 1099-INT
  • Student loan or interest deductions
  • *Unemployment income
  • Child tax credits
  • Earned income tax credit
  • IRS standard deduction
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*Some software providers, like TurboTax, do not allow the reporting of 1099-G unemployment income for simple returns. Others, like H&R Block, do.

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If Any of These Apply to You, You Probably Don’t Qualify

If your situation involves more than reporting the most basic income and claiming the most basic credits and deductions, you probably don’t qualify for a free simple return. Start budgeting to pay to file your taxes if any of the following apply to you:

  • Itemized deductions
  • Rental property income
  • Stock sales
  • Income, credits or deductions reported on non-1040 schedules or forms, such as cryptocurrency transactions
  • Business income
  • 1099 self-employment income

Freelancers typically can’t file a simple return. Neither can small business owners or most investors. In most cases, you’ll be notified while you’re going through the process that you don’t qualify for a simple return.

Where Can You File a Simple Return for Free?

The IRS Free File tool allows those with simple returns to file for free with the agency’s third-party partners, but that doesn’t include state returns and it’s only for those with adjusted gross incomes of $73,000 or less.

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The following software providers offer free versions for people with simple tax returns:

  • TurboTax: Free federal and state returns, other options start at $39.
  • H&R Block: Free federal and state returns, other options start at $28.
  • TaxSlayer: One free federal and state return, other options start at $19.95.
  • TaxAct: Federal returns are free for simple filers, but even they have to pay $39.95 per state return. Other options start at $24.95.
  • FreeTaxUSA: Federal returns are free for simple filers, but state returns are $14.99 each. Other options start at $7.99.

All of the major players offer bare-bones filing services for federal returns at least, but don’t expect any bells and whistles. For advanced tools, live help or other assistance, you’ll almost always have to upgrade to a paid version.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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