Tax laws are constantly changing which makes it hard for the average taxpayer to comply without some type of assistance. Unfortunately, tax assistance is normally accompanied by some type of fee whether it is from visiting a seasonal tax preparation chain (i.e., HR Block, Jackson Hewitt, Liberty Tax, etc.) or by purchasing tax software (i.e., TurboTax, TaxCut, etc).
Often times the amount a taxpayer is willing to pay for tax preparation directly affects their ability to realize their maximum refund potential by claiming available tax breaks and deductions. Fortunately, the IRS has partnered with approximately 20 private tax software developers to deliver free e-filing tax options for millions of taxpayers.
Free E-filing Criteria
Each participating software company is responsible for setting its own eligibility criteria to determine who can e-file for free. The criterion includes, but is not limited to, the taxpayer’s state of residency, age, income, and military service. However, despite the varied criterion, individuals or families with adjusted income of $57,000 or less should be able to find at least one software developer who will benefit them. Note that some companies may not charge for federal tax preparation but may charge for the state tax preparation.
How to File Taxes for Free with the IRS
Taxpayers must go through the IRS webpage to access the site listing the tax software developers participating in this year’s IRS-sponsored Free File Program. Once on the site, a taxpayer has the option to use a tool which will ask a few questions to determine the best software for their particular financial situation. Alternatively, a taxpayer can manually browse through a listing of all free e-file software providers. In either case, several options will appear along with a brief description of the services provided.
E-filing Benefits
Each year an increasing number of taxpayers opt to file their taxes electronically, also known as e-filing. E-filing provides several advantages over the traditional paper filing method. One of the most significant advantages is the speed in which tax refunds are received; taxpayers can get their refund directly deposited into their check or savings account in as few as 10 days. Other advantages include a reduction in errors submitted to the IRS and a quick acknowledgment that a return has been received. The error rate with e-filing has historically been about 1% compared to 20% for the traditional paper filing method.
E-file Sources:
IRS Website - Free File Now Available to Almost All Taxpayers; Software Can Help Find New Economic Recovery Tax Breaks that Could Be Overlooked
The information contained within this article is for general guidance only. As such, it should not be used as a substitute for consulting with professional accounting, tax, legal or other competent advisers.
Lauren Massie - “There is no knowledge that is not power” ~ Ralph Waldo Emerson
