I run a small freelance business on the side of my regular job, and last year I paid way too much for tax software. This year I want to find some good free tax software for self-employed folks.
The problem I've found with most free options is they don't handle business expenses well, or they make you upgrade to a paid version once you enter any 1099 income. I need something that can track mileage, home office deductions, and business supplies without charging me an arm and a leg.
Has anyone found free tax software that actually works for self-employed situations? I'm willing to put in a bit more work if it means saving $100+ on software fees.
As someone who tests a lot of tax software, I can tell you that finding truly free tax software for self-employed people is challenging. Most free versions cut off once you enter any business income.
However, I've found that FreeTaxUSA handles self-employed situations in their free federal version. They don't charge extra for Schedule C or business deductions. The catch is they charge $15 for state filing, but that's still much cheaper than the $100+ that TurboTax or H&R Block charge for self-employed versions.
Another option is to use the IRS free file program if your income is below $79,000. Some of the partners in the IRS free file alliance offer free self-employed filing at that income level.
I have a friend who does freelance graphic design, and she uses Cash App Taxes for her business income. She says it handles Schedule C pretty well for free.
The mileage tracking isn't automatic though - you have to enter your miles manually. But it does calculate the deduction for you once you enter the numbers.
One thing she mentioned is that Cash App Taxes doesn't have as much guidance for business deductions as paid software. You need to know what you can deduct rather than having the software walk you through it. But if you're familiar with business deductions already, it works fine.
I've been self-employed for years and here's my experience: the truly free options are limited for business income. Most will make you upgrade once you try to file.
That said, I've had success with TaxAct through the IRS free file program. My income was below their threshold and I got completely free federal and state filing with Schedule C support.
The key is being organized with your records. Free software won't hold your hand through business deductions, so you need to know what you can claim. Keep good records of mileage, home office expenses, supplies, etc., and then just enter the totals.
It's more work than paid software, but saving $100+ is worth it to me.