Does the IRS prepare taxes for free?
The IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals. The VITA program has operated for over 50 years, offering free tax help to people who generally make $56,000 or less, persons with disabilities and limited English-speaking taxpayers who need assistance in preparing their own tax returns. In addition to VITA, the TCE program offers free tax help, particularly for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors. While the IRS manages the VITA and TCE programs, the VITA/TCE sites are managed by IRS partners and staffed by their volunteers who want to make a difference in their communities. The IRS-certified volunteers who provide tax counseling are often retired individuals associated with non-profit organizations that receive grants from the IRS.
VITA/TCE services are not only free, they are also a reliable and trusted source for preparing tax returns. All VITA/TCE volunteers who prepare returns must take and pass tax law training that meets or exceeds IRS standards. This training includes maintaining the privacy and confidentiality of all taxpayer information. In addition to requiring volunteers to certify their knowledge of the tax laws, the IRS requires a quality review check for every return prepared at a VITA/TCE site prior to filing. Each filing season, tens of thousands of dedicated VITA/TCE volunteers prepare millions of federal and state returns. They also assist taxpayers with the preparation of thousands of Facilitated Self-Assistance returns.
Here’s how Free File works:
- Go to IRS.gov/freefile to see all Free File options.
- Browse each of the offers or use a “look up” tool to help you find the right product. Each Free File partner sets its own eligibility standards generally based on income, age and state residency. But if the taxpayer’s adjusted gross income was $69,000 or less, they will find at least one free product to use.
- Select a provider and follow the links to their web page to begin a tax return.
- Complete and e-File a tax return only if you have all the income and deduction records you need. The fastest way to get a refund is by filing electronically and selecting direct deposit. If you owe, use direct pay or electronic options.
Most companies provide a special offer for active duty military personnel who earned $69,000 or less. Those taxpayers can choose from any participating Free File provider regardless of the company’s other eligibility standards. Free File also can be a valuable tool for younger taxpayers or first-time filers with modest incomes as well as retirees and working families seeking to save money.
Free File providers also offer state tax return preparation, some for free and some for a fee. Again, use the “look up” tool to find the right product. There are two products in Spanish. With Free File, you can even use any digital device, personal computer, tablet or smart phone. Free File products are mobile enabled so you can do your taxes on your smart phone or tablet and e-File with your hand-held device.
You should also know your protections under the IRS Free File program. They include:
- Get a free federal tax return – As long as you qualify for the Free File federal return offer, you must not be charged for preparation and e-filing of a federal tax return.
- Be protected from unnecessary fees – Other than state tax preparation fees and a possible fee if you choose to continue with tax preparation when you don’t qualify for the federal return offer, you must not be offered or solicited marketing, promotional rebates, or any other form of selling activity on the Free File company’s website. Any state preparation or non-qualifying fees must be disclosed on the company’s Free File landing page.
- Be guided in your choices – If you find you don’t qualify for a specific company’s Free File offer after visiting their Free File website, you may return to the IRS.gov Free File website to seek another Free File online offer. Each Free File company will provide you information when you don’t qualify, with the option to select a link to bring you back to IRS.gov Free File site to select another company.
- Get help if you need it – If you need help when you are on the company’s Free File website and doing your taxes, you may refer to the company’s free customer service options.
- Be reminded of Free File – If you used Free File last year, you should receive an email from the same company product that you used, welcoming you back to Free File. The email should include a link to the company’s Free File online program and explain how to file with the program.
- Be protected from bank product fees – As part of Free File, you must not be offered any bank products such as Refund Anticipation Loans or Refund Anticipation Checks.
- Get help finding a free option for you – IRS offers a Free File online Look-up tool to help you find an offer that best meets your needs.
- Get important information on possible charges for state returns – Many Free File online products offer free state tax preparation. Some charge a state fee. Be sure to read each company’s information carefully.
Overseas Taxpayers Can Use IRS Free File to Prepare and E-File Tax Returns
- The Internal Revenue Service (IRS) advises that U.S. citizens and resident aliens living outside the United States can use IRS Free File to prepare and file their federal tax returns electronically.
- IRS Free File is brand-name software that is offered exclusively at IRS.gov, through a partnership with the tax software industry.
- There are five companies that accept foreign addresses. Taxpayers should review the list of tax forms supported by the company to ensure it meets their
- needs, especially Form 1116, Foreign Tax Credit, and/or Form 2555, Foreign Earned Income.
- To be eligible, taxpayers’ adjusted gross income in 2010 must be $58,000 or less. Some overseas taxpayers may exclude $91,500 of their 2010 foreign earnings, which would make more people eligible for IRS Free File.
- Free File software generally asks questions and taxpayers supply the answers. The software completes the proper tax forms, does the math, and allows for free electronic filing through IRS e-file. By filing electronically, taxpayers due refunds and who have U.S. bank accounts can opt for direct deposit and get their refunds in as few as 10 days.
IRS Free File
What it is
IRS Free File is a partnership between the IRS and a nonprofit organization called the Free File Alliance. IRS Free File provides access to free tax preparation software from 10 tax-prep companies, including major brands. You must have less than $69,000 of adjusted gross income to qualify for IRS Free File (the IRS estimates that 70% of all taxpayers are eligible). IRS Free File providers include big names such as H&R Block, Intuit (which makes TurboTax), TaxAct, and TaxSlayer.
What you get
- Provide some basic information about yourself and where you live, and IRS Free File will match you with free tax preparation software products.
- According to the IRS, more than 20 states also have state Free File programs patterned after the federal one. That means free tax preparation for your state return, too. Those states are: Arkansas, Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, Montana, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont, Virginia and West Virginia, along with the District of Columbia.
- Also, even if your income is over the limit, IRS Free File provides everyone with access to fillable electronic versions of IRS forms (but not much guidance).
Direct-from-provider free tax preparation software
What it is
Many major tax software providers offer free tax preparation software for people with really simple tax situations. These packages may be different from what’s available via IRS Free File.
What you get
- Typically (but not always), these packages work for people who only have income from one job and aren’t itemizing on their tax returns.
- State tax returns are usually also included in these free packages, though some software providers tend to add a fee for that as the April tax-filing deadline nears.