The new year is just around the corner, which means that tax season will soon be upon us. While the tax bill itself is dreaded by most, having to pay just to file your taxes adds further insult to injury. That’s why, beginning next year, Credit Karma is offering to file your taxes for free – no strings attached.

Who is it for?

Beginning with the 2017 tax season, one of our favorite credit score companies is rolling out Credit Karma Tax. This service boasts completely free tax filing for most everyone, without hidden fees or gimmicks.

Related: The Most Common Tax Deductions

The new service is available for almost anyone who files taxes using a Form 1040, 1040EZ, or 1040A. It also doesn’t matter if you’re submitting your return as a single or joint filer.

However, there are some exclusions and not everyone will be able to use Credit Karma’s tax software. For example, you cannot complete your taxes with Credit Karma Tax if you are filing with any of these:

•         Multiple state or non-resident state returns
•         State filings without a federal return
•         Non-resident federal filing (1040NR)
•         Foreign earned income credit
•         Non-dependent earned income credit
•         Married filing separately (MFS) in common law states
•         Estate and Trust income from K1 forms

Small Business Owners and the Self-Employed

If you are a small business owner or are self-employed, you can also take advantage of the new, free service from Credit Karma for your individual filings. They are able to support all necessary forms that you personally need in order to report your small business income and losses.

Whether you file with a 1040 schedule C (sole proprietorship), 1040 schedule E (partnerships, estates, trusts, multi-member LLCs, S corporations, C corporations), or 1040 schedule SE (self-employment tax), you can file your individual earnings/loss reports through Credit Karma.

However, you should note that you are not able to file your taxes as a business through Credit Karma Tax just yet. They cannot support small business forms or businesses that need to file as an S-corp, C-corp, partnership, or multi-member LLC. For those more advanced filings, you will need to utilize another paid service or a tax professional.

Learn More: 8 Must-Have Small Business Tax Deductions

What’s the catch?

You may be wondering what the catch might be – how can Credit Karma Tax truly be free, without any hidden fees or sneaky caveats? Well, you’ll be glad to know that no, there are no gimmicks and yes, it really is completely free.

There are no trial periods, no income limits, no expiration dates, and you won’t be upsold on a paid version halfway through the process. In fact, Credit Karma Tax doesn’t even have a paid version! It’s free for everyone eligible to use the service, whether for federal or state returns, and that’s the end of it.

In order to keep their new tax filing service free, Credit Karma is very upfront about using affiliate marketing to bring in revenue. This means that the company could analyze the personal, credit, and tax information you provide to them through your account. They may then suggest certain financial products that they believe would suit you and your needs well. These could include loans, credit cards, or certain insurance products.

Of course, you are under no obligation to take advantage of any suggested products, and you won’t be hounded about them, either. But if you do sign up for any of these affiliate offers, Credit Karma will often earn a kickback from the other company. This is what allows them to provide their tax filing service without a fee, without affecting you.

While they may use your account to determine which products would suit you best, rest assured that all of your personal and financial information is very safe. Credit Karma was established in 2007, and has a strong track record of providing both excellent and secure (free!) services.

Their membership exceeds 60 million members, and they take that trust very seriously. They have an on-site security time, encrypt all transmissions on their website, and regularly have third-party security companies scan their site for any vulnerabilities.  Since they are an Authorized IRS e-file Provider, they are also required to comply with all security, privacy, and business standards that the IRS sets.

Aren’t there a ton of free tax filing services already?

Sure, there are a number of others already who offer free tax filing, and we have recommended many of them to you. These include companies like TurboTax, TaxAct, and FreeTax USA, among others. So, why would you move from one of them to Credit Karma Tax?

Well, you may not want to. If you’re already established with one of the other companies, it may be easier for you to continue using their services. This is especially true if you’re able to import your return from last year, which could save you a lot of time when filing in spring 2017. (Credit Karma Tax is not yet offering prior return importing, since this is a new service. However, my personal guess is that this will change for 2018.)

Related: How to Get an Extension on Filing Your Taxes

If you’re unhappy with who you’ve used in the past, are new to the “free online filing” game, or just want to use a fresh company, though, Credit Karma might be right up your alley. They’re a strong competitor to the market, and a totally free filing makes tax time sting a bit less.

They’re not perfect, though. As mentioned above, there are a few people who cannot use Credit Karma Tax to file their returns. These include non-residents and those filing multiple state returns, among others.

It’s important to note that Credit Karma Tax is a self-directed tax preparation service. This means that they will guide you throughout the process, but you are ultimately responsible for submitting the correct information and answering the questions appropriately. As such, the company does not offer any sort of IRS protection. If you are audited or make a mistake on your taxes, they will not represent you or cover any fines incurred. This type of service is typically offered through companies with paid filings, like H&R Block, or as an optional add-on service from some free filing companies, like TurboTax. If this is something you absolutely need to have, Credit Karma won’t be your best option.

Also, always remember that no online filing company can replace the advice and guidance of a tax professional.

How do I sign up?

If you would like to be one of the first to gain access to Credit Karma Tax, you need to sign up online now. The service will be rolling out in January 2017, and members can get in line now to be notified when it goes live. You will have to be sign up to be a member on Credit Karma in order to use the tax filing service, but this is (of course) free and easy. Oh, and don’t forget that your 2016 taxes are due on April 18, 2017.

Learn more, explore the site, and sign up for Credit Karma Tax here. Then, let us know what you think about the service!

The post Credit Karma Tax is Rolling Out in January — and It’s Free appeared first on The Dough Roller.

via Finance Xpress