If you have low to moderate annual income, you're most likely eligible for a variety of free or reduced-rate options for completing and electronically filing your federal income tax return.
The Internal Revenue Service teams with a nonprofit group comprising 14 commercial tax software companies to provide free online tax software. The Free File Alliance includes Intuit, maker of TurboTax, and H&R Block, as well as companies like TaxSlayer and 1040Now.
If your income is less than $58,000, you're eligible for one or more offerings from Free File. Over time, the alliance has made changes to make the offerings easier to use, like eliminating pop-up advertisements for financial and other products, said Tim Hugo, the alliance's executive director. The software asks questions about your specific situation and guides you through completion of your tax return step by step.
Details of each offering may vary from company to company. To use the Free File offering from TurboTax's Free File software, for instance, your adjusted gross income must be $30,000 or less; it can be up to $58,000, however, if you are an active member of the military.
If you make more than $58,000, you're not eligible for Free File's tax preparation software. But anyone can use the free online version of federal tax forms, known as Free File Fillable Forms, regardless of income. The forms are essentially electronic version of the federal government's paper tax forms. With this option — it's best to be experienced at preparing your own tax return — you can complete your return online and file it electronically at no charge. You'll get minimal guidance from the system, though, and may have to do some calculations yourself.
This year's tax filing deadline is April 15; if you need more time, you can use Free File software to file for an extension.
Here are some additional questions to consider about Free File:
How do I know if I'm eligible for Free File tax software?
You qualify to use Free File software if your adjusted gross income, or AGI, for 2013 was $58,000 or less. The alliance suggests you refer to the return you filed for 2012 for a quick estimate of your 2013 income. If you used Form 1040EZ, you'll find your AGI on line 4; for form 1040A, it's line 21; and for form 1040, it's line 37.
How do I get access to the free online software?
You must go through the IRS website (irs.gov). You can browse the various options or fill out a questionnaire that will help you narrow down the choices. Once you select the software you want to use, the site will direct you to the website of the appropriate provider so you can complete your return. Don't go directly to the software maker's website without going to the IRS site first, though, or you may be charged a fee.
Are there any fees associated with using Free File?
There's no fee to use the software to prepare your federal return, or to file your return electronically. There may be a transaction fee if, for instance, you owe money and opt to pay your tax bill using a credit card, Hugo said.