The OnLine Taxes (OLT) Free File Edition

OLT is part of the IRS's Free File Alliance

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OnLine Taxes (OLT.com) is part of the IRS Free File Alliance, a program that offers many taxpayers with free tax filing options. It's web-based software that you can use to prepare federal tax returns, but you must qualify. With no price tag for many filers, it's one of the best values available.

The IRS has indicated that 70% of Americans are eligible to use Free File even with the qualifying restrictions.

About the Free File Alliance

Your income must be less than $69,000 as of the 2019 tax year to qualify for the federal Free File Alliance program. This is the income you'll report on the tax return you'd file in 2020.

You can print out your tax forms on a link provided on the IRS's Free File website if you earn more than $69,000 in 2019, and they're free as well. You'll have to complete them on your own, but the site does offer some minimal guidance.

The IRS partners with the Free File Alliance tax software providers to offer this service. Tax software providers are free to adjust their income requirements downward, and some do, but OLT adheres to the $69,000 figure. This is your adjusted gross income (AGI) after various deductions, not your overall gross income.

Your AGI must be at least $14,000 to qualify with OLT unless you're Active Duty Military.

Some providers also impose age and state restrictions, but OLT doesn't do that. And OLT includes a free state return if you qualify for the free federal return.

Navigation and User Interface

The software's interface consists of a series of data input worksheets. Users first have the option to select their tax return type by choosing from Form 1040, Form 1040NR, and Form 1040-SS.

The NR return is for non-residents, and the SS return is for residents of the U.S. Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico to report self-employment income if they're not otherwise obligated to file a tax return.

The IRS changed things up with tax return forms beginning in 2019. Forms 1040EZ and 1040A are no longer available beginning with the 2018 tax year.

The software alerts users of the many changes resulting from 2018's Tax Cuts and Jobs Act (TCJA) right up front, and it also provides an icon with pertinent information throughout the filing. The software gathers a range of personal and family information before beginning the tax preparation process.

The Data Entry Portion

A variety of headlines and help notes provide for guidance when you get into the data entry portion of the program. The process flow appears at the top of each screen, including income, deductions/credits, health care, other, and review.

Users can also go to federal, state, file, view return, preferences, and account at the top of the screen when information has been input. On the right-hand side of each page is a box providing help for the page’s topic.

Income Entries

Beginning with income, the software allows for a multitude of earnings data in numerous sections, including wages, interest and dividends, investment income, retirement and pension income, miscellaneous income, self-employment income, other investment income, gambling, and lastly, other income types. All these include the necessary addendum forms that apply to each income type.

Deductions and Credits

The software moves to deductions and credits after income. The user begins with an outline in this section, including adjustments to income, deductions, qualified business income deductions, credits, payments, and refundable credits.

Unfortunately, OLT doesn't accommodate claiming the earned income tax credit as of 2020, a credit that can provide a good bit of tax relief to low-income families.

The Final Two Sections

The final two sections include health care and "other." You'll be required to provide information on your health plan for the year and your Form 1095-A in the first section. Users have the option of choosing from various forms in the final, other section. They're grouped by taxes, other taxes, and miscellaneous. Each page displays the required payment or available refund in the top right corner.

The software provides a review after all sections are completed. Users can return to double check items. They can also navigate to suggested areas where additional information might be required.

Users can view PDF copies of their federal returns when they're satisfied with the information they provided, and then they can move on to the state return.

The state return process follows the same procedures. The software walks the user through income, deductions and credits, health care, and other issues. It also provides a review of the state return and a PDF copy when it's completed.

Help Features

OnLine Taxes displays a sidebar on the right side of each page that provides pertinent information about the page’s topic and links to additional information where available.

OLT offers a variety of direct help choices with its free file version, which are also expanded in the OLT Premium offering. Users can get contextual help from the Comprehensive Knowledge Base, FAQs, Federal Error Code Help page, and the OLT Top 10 Tax Tips page. OLT also provides help line information for the IRS.

The free file OLT version also offers live chat and email responses seven days a week during tax season. Users who email questions will usually receive a response within 24 to 48 hours.

Overall Experience of the Software

OLT offers everything a user would expect in an online tax preparation service. It also seems to go above and beyond the necessary data entry by requesting an additional layer of personal information along with a broadened array of addendum form options in the income and credits sections.

Taxpayers with just a little tax savvy might fare better than those who need a bit more guidance, however. Some users have reported that they were left to determine which corresponding form or schedule they were supposed to complete and submit with their returns. The help features will answer your questions, but it might take a little more time.

The OLT Paid Service

Beyond the Free File option, OLT also offers an attractive OLT Premium upgrade for only $7.95 per federal return and a reduction in the state filing cost to $7.95. You can check out the OLT software for yourself at OnLine Taxes Free File Edition.

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