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“Free” Isn’t Always Free

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Some things marketed as “free” are not free at all—fees are hidden in the small print. Freebies that carry a cost…

“Free” tablet computer from a cell-phone service provider. You might be told that you qualify for a free tablet, but you might not be told that it will have its own service plan, which will add $10 to $20 to your monthly bill. People are used to getting a “free phone” that is only free because they sign up for a service plan, of course, but this tablet offer is much trickier because most people do not sign up for a service plan when they buy a tablet.

If you protest after discovering the charge on your bill, you will be told it was disclosed in the contract that you signed, but few people read these contracts.

What to do: Decline “free tablet” offers unless you want a tablet that has a service plan…in which case at least ask about the service plan’s rates.

“Free” online tax filing from Turbo-Tax or H&R Block. If you’re one of the 10 million to 15 million people who filed for a tax-return filing extension this year, your 2016 filing deadline is fast approaching. (And the rest of us will be thinking about 2017 taxes soon.) The major tax-preparation software companies promote “free” online versions of their tax-prep software. But these free versions are extremely limited. If you require a Schedule A to itemize deductions…a Schedule C to report investment income…or almost any other form beyond a 1040EZ or 1040A, you likely will have to pay $35 or more to upgrade…and perhaps $30 or so to file a state tax return.

Many taxpayers learn that they need an upgrade only after spending hours entering financial information.

What to do: Consider using the free online tax-prep software CreditKarma.com/tax—it is free even if you use a variety of forms beyond 1040 forms. CreditKarma’s software is not as comprehensive as some tax software, but it’s sufficient for most taxpayers.

Or see if you are eligible for the free online tax-prep software offered by ­TurboTax and H&R Block, among others, through the IRS “Free File” web page (search “free file” at IRS.gov). It tends to be fairly comprehensive and often includes state returns. But it’s mainly for taxpayers of modest income—most of the offerings require adjusted gross income below $64,000.

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Source: Clark Howard, host of The Clark Howard Show, a radio program about saving money, and author of Clark Howard’s Living Large for the Long Haul. Clark.com Date: July 15, 2017 Publication: Bottom Line Personal
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