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Groupon Coupons Tax Software Sale

There are some things like Girl Scout cookie season, the first day of summer, and birthdays, that everyone looks forward to every year. But others—looking at you, tax season—are universally dreaded. Unless you're a seasoned professional, tax season can be confusing and full of hard-to-find forms and even harder-to-understand questions. And on top of all that, if you make a mistake you might owe money at the end of it. 

So, the Groupon Coupons team put together this tax planning guide to help make your 2020 tax prep as easy as possible. We compare the best tax software options so you know if TurboTax or FreeTaxUSA is right for you, we answer common tax questions, and we explain everything else you might need to know to get the biggest tax refund possible this year.

Best Deals from Our Tax Partners

These are without a doubt the best tax prep deals you will find on the internet. We update these deals every week, so check back to make sure you don't pay too much for your taxes.

Best Online Tax Prep Service

TurboTax vs. H&R Block comparison

The Final Verdict

It depends. No tax software will be the best fit for every single filer. We've broken down the very best features of each of the five top rax prep options to give you an idea of which one will be best for you.

Most Convenient

TurboTax: The O.G. of tax software, TurboTax continually updates its interface to make it fast and easy to use. But that convenience comes at a price. Tax filers with more complicated returns will have to pay to upgrade for more services, but TurboTax will definitely tell you along the way, unlike other platforms that just won't support your needs.

Most Customer Friendly

H&R Block: It was rated the No. 1 Best Tax Software by PC Mag because of it allows for some deductions with the free version, its intuitive design, and its lower price point (when compared to TurboTax).

Most Value

TaxSlayer: There are four levels of service, just like TurboTax and H&R Block, but TaxSlayer comes in at a lower price point across the board. The Simply Free option for the most basic of tax returns is free to file both federal and state tax returns and includes student loan interest and education expenses. For access to every tax deduction and credit, upgrade to the Classic package for just $46 total ($17 federal and $29 state). That’s 31% savings or more over the other guys. Learn more about how you can save with TaxSlayer. 

Most Free

Credit Karma Tax: It is the only one of the top five software options that is free to file for both state and federal taxes. But the system doesn't support all situations, so if you've moved states or have several sources of income, it might not work for you.

2020 Tax Deadlines

 

Frequently Asked Tax Questions

Has the tax deadline been extended?

Yes. The federal government announced on March 21 that they were extending the federal tax filing deadlines for 90 days. Federal tax returns are now due Wednesday, July 15, 2020.

Are tax returns delayed because of Coronavirus (COVID-19)?

Not as of March 17. But because of the uncertainty of COVID-19 quarantine measures, many experts are urging filers who expect a refund to submit their tax returns as soon as possible to avoid any potential IRS slowdowns.

How many people get a tax refund?

It varies every year, but in 2019, nearly 73.2% of filers got a refund. That's nearly 96 million Americans. The average tax refund is $2,727.

Can I file my taxes for free?

It depends. Those with simple returns and no deductions will likely be able to file for free. To ensure you get all the deductions you're entitled to, you might have to upgrade. See how the five biggest tax prep software options stack up.

What’s the earliest I can file my taxes?

The IRS will start accepting tax returns on Monday, Jan. 27, 2020. In 2019, the first day to file taxes was January 28.

What is the deadline to file taxes?

Wednesday, April 15, 2020.

Can I file my taxes early?

Some services, like H&R Block and TurboTax, allow you to file as early as Jan. 1, but your return cannot be officially submited to the IRS until filing is open (we predict that will happen around Jan. 20). You’ll just have to wait longer to get your tax refund.

How long will it take to get my tax refund?

The IRS issued refunds for about 90% of taxpayers in less than 21 days from the date their return was received in 2019. See how long it typically takes to get your tax refund.

What is a tax deduction?

A tax deduction is a way to lower your overall taxable income. It's subtracted from your taxable income, therefore reducing how much is paid in taxes in the end. It is different than a tax credit, which is subtracted from your final tax liability. 

For example, if a family’s income is $50,000 per year and they are eligible for a $500 deduction, the family will only be taxed on $49,500 in income.

What is a tax credit?

A tax credit is a reduction in the amount of taxes owed. A tax credit is different than a tax deduction, which is a reduction in your taxable income.

For example, the Child Tax Credit in 2020 is $2,000 per child, so a family with one child that owed $3,000 in taxes would owe just $1,000 after using the Child Tax Credit. 

What is the child tax credit in 2020?

$2,000 per qualified child. This number is up from $1,000 in 2018 because of the Tax Cut & Jobs Act.

 

2020 Tax Brackets

The United States uses a graduated tax bracket. That means that those with the lowest incomes are taxed at the lowest rate (10%), and as incomes rise, so does the tax rate (the highest tax bracket is 37%). But higher earners' income isn't all taxed at the 37% rate. The first portion of their income is taxed at the lowest level, and their tax rate graduates as their income grows until they get to the highest 37% rate. All additional income beyond that is then taxed at 37%.

   

Common Tax Deductions & Credits

The 2017 Tax Cut & Jobs Act raised the standard deduction to $12,200 for single filers and $24,400 for married couples filing jointly. This is a big increase, which means many more Americans will be better off taking the standard tax deduction than itemizing their returns. But not all! If you aren't sure which is best for you, it is probably worth it to run the numbers both ways (most tax software allows you to do this easily). We have broken down some of the most common tax deductions and credits here, and this guide from NerdWallet can help you decide whether to itemize your return.

  1. State and Local Tax deduction: You can deduct up to $10,000 in state and local taxes, including property taxes, local income taxes, and sales taxes. 
  2. Student Loan Interest deduction: If you paid interest on student loans in 2019, you can deduct up to $2,500.
  3. Mortgage Interest deduction: This deduction is more complicated, but essentially you can deduct any mortgage interest you paid in 2019 if your house cost less than $750,000. This breakdown explains it in much more detail.
  4. Charitable Donations deduction: You may be able to deduct the value of any charitable donations you make, whether they are in cash or property, but you need to have a receipt of the donation.
  5. Medical Expenses deduction: Most filers can deduct any qualified and unreimbursed medical expenses that are more than 10% of your adjusted gross income for 2019.
  6. Child tax credit: Up to $2,000 per child and $500 per non-child dependent. Anyone who makes $200,000 or less will get the full $2,000 (or $500) credit. If your income exceeds $200,000, the credit's value starts to go down.
  7. Child and Dependent Care credit: For most filers, you can deduct 20% to 35% of up to $3,000 in daycare or similar costs for a child under the age of 13, an incapacitated spouse or parent, or another dependent. For two or more dependents, the deduction maximum is up to $6,000.
  8. Earned Income tax credit: Designed to help low- to moderate-income workers, the EITC or EIC is something everyone but the highest earners should look into. In the tax year 2019 (filed in 2020), qualified filers will get a tax credit between $529 and $6,557. This credit is especially important because it is refundable, meaning it could significantly impact your refund. For more information about how the Earned Income tax credit works and who is eligible, check out this Nerd Wallet explainer.
  9. American Opportunity tax credit: Filers can claim $2,000 spent on tuition, books, equipment, and other school fees, plus 25% of the next $2,000, for a total of up to $2,500. Living expenses and transportation cannot be included.
  10. Residential Energy credit: Get a tax credit for up to 30% of the cost of installation of solar panels or a solar water heater.

 

Other Tax Resources

Filing your taxes can be confusing and Groupon Coupons knows how important it is to get it right. So here's a list of the resources we find most helpful when we're trying to answer all of our most pressing tax questions.

TurboTax

TurboTax Tools

Use TurboTax's Tools page to estimate your tax refund, learn more about withholding, and make sure you don't miss a tax credit or deduction.

H&R Block

H&R Block Tax Information Center

H&R Block answers lots of common tax questions and helps users with real-time software and filing issues.

FreeTaxUSA

FreeTaxUSA Tax Tips

FreeTaxUSA set up this helpful tips center so you could find the answer to any federal or state tax question in one easy-to-use place.

Credit Karma Tax

Credit Karma Tax

This striped-down tax filing service is free for all users! It is intuitively designed but is not equipped to handle some tougher tax situations. 

NerdWallet

NerdWallet Taxes Page

This trusted personal finance blog created a resource center with easy-to-understand answers to all the common tax questions in one place.

IRS

IRS Free Tax eFile

When in doubt, go with the source. The IRS has all the information you need to file your taxes correctly.