In recent news, TurboTax has agreed to pay $141 million to customers who could have filed their taxes for free, but were instead charged fees. The issue was brought to light by a ProPublica investigation that revealed TurboTax was intentionally hiding its free filing option from eligible taxpayers. This article will explore the details of this case and what it means for taxpayers.
The Background of the Case
The IRS has a Free File program that allows taxpayers who make less than $72,000 a year to file their taxes for free. TurboTax is one of the companies that participates in this program. However, ProPublica's investigation found that TurboTax and other tax preparation companies were making it difficult for eligible taxpayers to find the free filing option.
Instead, TurboTax was directing eligible taxpayers to its paid service, which can cost up to $120. This led to many taxpayers unnecessarily paying for a service that they were entitled to receive for free.
TurboTax's Response to the Investigation
After the investigation was made public, TurboTax issued a statement apologizing for its actions. The company admitted that it had not done enough to make the free filing option easily accessible to eligible taxpayers.
TurboTax also agreed to pay $141 million to customers who were affected by the issue. This money will be used to refund fees that were charged to eligible taxpayers who used TurboTax's paid service when they could have filed for free.
What This Means for Taxpayers
The ProPublica investigation and TurboTax's response, highlight an important issue for taxpayers. It is crucial to be aware of all options available when it comes to filing your taxes.
Taxpayers who make less than $72,000 a year should take advantage of the IRS Free File program. This program is designed to help eligible taxpayers file their taxes for free, saving them money on tax preparation fees.
If you are unsure if you qualify for the IRS Free File program, you can use the IRS's online tool to check your eligibility. The tool will ask you a few questions about your income and tax situation, and it will determine if you qualify for free filing.
Conclusion
In conclusion, the recent news of TurboTax paying $141 million to taxpayers who could have filed for free highlights the importance of being aware of all options when it comes to filing your taxes. Eligible taxpayers should take advantage of the IRS Free File program to save money on tax preparation fees.