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Updated on Friday, March 11, 2016
OnLineTaxes, or OLT.com, is an online tax preparation platform that provides free service to those with even the most complicated returns. It doesn’t matter if you have to report dividend interest, freelance income, or rental properties; the one-size-fits all price is $0.
Tax Prep Process
To start using OnLine Taxes, you will need to set up an account. No credit card information is requested. From there you start giving your basic information, including name, address, Social Security number, dependents, and health care coverage information.
Health care information, such as Form 1095-A for those who bought a plan on the marketplace, and W-2 input forms are set up almost identically to the paper forms you received in the mail, making the input process relatively easy.
Under “Additional Information,” you will be asked to provide your driver’s license or state ID card information. Many states have started asking for this information when filing state tax returns in an effort to reduce fraud. At this point in time, the only state that has mandated it as a requirement is Alabama.
You’ll then move through all of your income information. OnLine Taxes provides an interactive checklist that allows you to enter only the sources of income applicable to your specific situation. It is grouped conveniently by: wages, salaries and tips; interest and dividends; investment income; retirement and pension income; miscellaneous income, which is especially common for freelancers; self-employment, landlords and farmers; other investment income; gambling income or losses; and “other types of income,” which catches all the other random ways you may have pulled in money in 2015.
As you move through the process, OnLine Taxes keeps you updated on your estimated return or tax due via the “Federal Tax Due” box in the upper righthand corner.
For those that are required to file a Schedule C, OnLine Taxes essentially walks you through the form line-by-line. Wording isn’t made any more user-friendly than if you were filling the form out yourself, but the sidebar contains an interactive glossary and “Useful Links” section that serves to clear up any questions you may have.
After completing your income, you’ll move into adjustments that could potentially lower your adjusted gross income (AGI.) This section is set up categorically in a similar vein to the income user interface. You will then be asked if you would like to itemize or take the standard deduction.
Next, you’ll input any additional taxes due. When we ran this test, the program automatically calculated additional healthcare-related taxes, though it is a good idea to run through each potential tax in case there are any other areas in which you may owe.
Credits, payments, and other miscellaneous information are set up in a checklist like previous sections, and need to be completed before you’ll be able to review your summary. The summary will pull up any incomplete data and warnings before allowing you to file. For example, our fictional filer needs to get an IRS-issued PIN, find out the contact information for their school and file additional forms for tax penalties owed.
Overall, OnLine Taxes is intuitive, but not as user-friendly as some other, higher-priced programs. It requires a bit more manual labor, and a basic understanding of how tax law applies to your individual situation.
It is difficult to beat OLT.com’s pricing. Federal returns are free for everyone, with state returns available for $9.95. Customer service is only available via email, but if you upgrade to Premium Edition, live chat and phone support is available. This package also gives you access to audit support. Premium pricing is $7.95, and state returns are reduced by two dollars to $7.95 under this pricing model.
The only additional fee you could end up paying to OnLine Taxes is a $29.95 charge for paying for your state return filing fee or Premium Edition via a reduction from your tax return. If you pay upfront, there is no additional charge.
Who Should Use OnLine Taxes?
If you have a firm grasp on the tax regulations you are subject to, you’ll have a hard time beating OnLine Taxes when it comes to value. The pricing model is particularly attractive to those who have complex tax situations that require filing multiple forms. Since customer support is so limited, you may want to steer clear if you have burning questions about deductions, credits or liabilities.
However, if you’re willing to cough up $7.95 for the Premium Edition, access to phone support may negate those concerns. It is a far cheaper option than paying for a simpler user interface on competitors’ products, which can run you over $100 if you are filing a complex return.