Tax season can be a stressful time for many, but it doesn’t have to be. With the right knowledge and tools, you can file your taxes for free, saving both time and money. This comprehensive guide will walk you through the various options available for free tax filing, helping you navigate the process with confidence and ease.
IRS Free File
The IRS Free File program is a partnership between the IRS and the Free File Alliance. The Free File Alliance is a coalition of leading tax preparation software companies that provide their branded products for free to qualifying taxpayers. Key features of the IRS Free File program include:
- Availability to taxpayers with an adjusted gross income (AGI) of $73,000 or less
- Access to guided tax preparation software from IRS partners
- Options for both federal and state tax returns (state returns may have additional fees)
- Secure and encrypted data transmission
For those with incomes over $73,000, there is a Free File fillable form option. The IRS does not endorse any specific partner within the program. Taxpayers can review the available partners on IRS.gov and select one that best fits their needs. If qualified, they will then receive federal tax preparation and e-filing at no charge. Some partners may also provide state income tax filing for free.
How to Access IRS Free File
Although many well-known tax preparation companies participate in the Free File program, you cannot access the Free File program through their websites. You can only receive free tax preparation and filing assistance by starting at IRS.gov.
If your AGI is $73,000 or less:
- Go to https://apps.irs.gov/app/freeFile and select a Free File partner. You can browse all or narrow your choices by using the lookup tool.
- Next, create an account with the selected partner. If you’re a previous user, you can log into your existing account.
- Finally, gather the necessary information to prepare and file your federal taxes.
If your AGI is over $73,000:
- Read the IRS Free File Fillable Forms User’s Guide
- Make sure you are using one of the recommended browsers and have a high-speed internet connection before using the fillable forms.
- Turn off all pop-up blockers, tracking blockers, and auto-fill features.
- Create an account. You will need to do this every year.
With the Fillable Forms option, you will need to prepare your tax forms on your own. There are, however, free resources on IRS.gov to assist, including line-by-line instructions. Should your return get rejected, you can use the “Search Errors” tool to find a solution.
Introducing IRS Direct File: A New Free Filing Option
In addition to the Free File program, the IRS has introduced a new option called IRS Direct File. This pilot program aims to provide a simple, free way for eligible taxpayers to file their returns directly with the IRS, without the need for third-party software.
IRS Direct File offers several advantages:
- Direct interaction with the IRS
- No hidden fees or upsells
- Simplified interface for straightforward tax situations
- Potential for faster processing and refunds
Unfortunately, you cannot use Direct File for your state tax returns. If you need to file a state income tax return, it will guide you to a state-supported tax preparation and filing tool upon completion of your federal return.
Direct File Eligibility Requirements
Not all taxpayers will be eligible to use Direct File. You must reside in one of the 25 states where it is offered and have one or more of the following types of income.
- Income from an employer (Form W-2)
- Unemployment compensation (Form 1099-G)
- Social Security benefits (Form SSA-1099)
- Distributions from a Health Savings Account (Form 1099-SA)
- Interest income (Form 1099-INT)
- Alaska Permanent Fund Dividend
You are ineligible to use Direct File if you have unreported cash income, such as tips or alimony, or have income reported on other forms, such as a 1099-NEC or 1099-K. Those with contributions or distributions from a Medical Savings Account (MSA) or an IRA are also ineligible for this program.
Additionally, Direct File only supports those who use the standard deduction when filing. Certain tax credits are also not supported by this program.
Direct File Income Thresholds
In addition to the requirements above, there are also income thresholds for using Direct File:
- Your wages must be $200,000 or less ($168,600 if you have multiple employers).
- If you file as Married Filing Jointly, your combined income cannot exceed $250,000. Additionally, neither spouse can earn more than $200,000 (or $168,600 if you have more than one employer).
- If Married Filing Separately, your wages must be $125,000 or less.
Although Direct File represents a significant step toward making tax filing more accessible and affordable for millions of Americans, its future is uncertain. The Trump administration has indicated that it plans to restructure the IRS and may scrap the program. Only time will tell if it expands or disappears.
What You Need To File Your Taxes
Whether you use IRS Free File or Direct File, you’ll want to have the following information on hand before starting your federal income tax return.
- A copy of last year’s return (for AGI amount) – If you don’t have a copy, you can use the IRS Get Transcript self-help tool to get a tax transcript.
- Social Security numbers for yourself, spouse, and dependents (if applicable)
- W-2s
- 1099s (1099-INT, 1099-G, 1099-DIV, and 1099-R)
- Other income and receipts (Social Security benefits, unemployment compensation, business receipts, etc.)
- Form 1095-A, Health Insurance Marketplace States (if applicable)
- Form 8962, Premium Tax Credit (if applicable)
- A valid email address – This is required to receive notification that your return was accepted.
It’s also important to have a private, secure internet connection to ensure your personal information is protected when filing your return. By following these tips, you can streamline your free tax filing process and increase your chances of a successful, stress-free experience.
Need Tax Help?
Do you have questions or concerns about the IRS Free File or Direct File program? Please email the IRS at freefile@irs.gov. If you do not qualify for the free guided tax preparation or do not feel comfortable completing the returns on your own, contact Tax Defense Network at 855-476-6920. We offer affordable tax services for individuals and small business owners. Call today for a free quote!