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) offers free web-based software to prepare federal tax returns. It's part of the IRS's Free File Alliance, a program that seeks to offer taxpayers free filing options. It's one of the best values available in 2019.

The Free File Alliance

The federal Free File Alliance program comes with some restrictions. Your income must be less than $66,000 as of the 2018 tax year—income reported on the tax return you'll file in 2019. You can print out your tax forms on a link provided by the IRS's Free File website if you earn more than that, and they're free as well.

Tax software providers are free to adjust their income requirements downward, and some do, but OLT adheres to the $66,000 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.

Some providers also impose age and state restrictions, but OLT does not do that.

Navigation and User Interface

The software's interface consists of a series of data input worksheets that are much improved from the 2017 edition.

Users first have the option to select their return type by choosing from: 1040, 1040-SS, 1040-NR, and 1040X. The IRS has changed things up with tax forms, so Forms 1040EZ and 1040A are no longer available for the 2018 tax year.

The software alerts users of the many changes resulting from the 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/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.

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 1095-A in the first section. In the final, other 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.

Paid Service

The free federal plan charges $9.95 if you also want to file a state return, but that's very reasonable.

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. Users get the addition of live phone and chat help support and audit support with the upgrade.

Amended returns for all options are free as of 2019.

To check out the OLT software for yourself, visit OnLine Taxes Free File Edition.