Instead Plans Free Tax Prep and Filing Service to Revolutionize Tax Industry

What's Happening?

Tax management platform Instead is set to offer free tax return preparation and filing services for various forms, including 1040, 1041, 1120, 1120-S, and 1065. CEO Andrew Argue announced that the service will be phased in, starting after the April 15, 2025 tax deadline, initially allowing users to file extended returns. Instead has recently gained approval as an official e-filer with the IRS and several state tax authorities. The company aims to leverage technological advancements to reduce costs and provide free filing options, while maintaining paid services for more complex tax strategies and advisory.

Why It's Important?

Instead's initiative to offer free tax filing services reflects a significant shift in the tax preparation industry, driven by technological advancements and the adoption of artificial intelligence. This move challenges traditional revenue models and could lead to increased competition among tax service providers. By reducing the cost barrier, Instead is democratizing access to tax filing services, potentially benefiting millions of taxpayers who currently pay for such services. The company's approach highlights the evolving landscape of tax preparation, where efficiency and cost-effectiveness are becoming paramount.

What's Next?

As Instead rolls out its free tax filing service, the company plans to expand its offerings and secure additional approvals from tax authorities. The service will fully launch for the 2026 tax year, eliminating the need for a PTIN. Instead will continue to offer paid services for advanced tax strategies and advisory, as well as develop an API product for additional revenue. The industry may see further shifts as firms adapt to new technologies and explore alternative revenue models.