Each year, Americans spend more than $11 billion on tax preparation services. For most taxpayers, this is. Even approaching this year there are many options for completing your taxes for free, either on your own or with the help of an expert.
IRS Free File
If you make less than $73,000 a year, you can use what’s called “Free File” software, a service that commercial tax preparers make available in partnership with the IRS. This year, you have the choice between eight free tax products. It’s a smaller selection than in previous years, after two of the most popular software providers, TurboTax and H&R Block, severed ties with the free file program.
Still, anyone earning less than $73,000 a year – about 70% of taxpayers – will be able to find at least one freeware option. Some of them also offer free tax returns.
To get started, access the free file through the IRS website, which contains the most up-to-date information on available products and qualification guidelines. Trying to get there in other ways — including searching online for a free tax return — could lead you to a paid product.
The IRS also offers a search tool, which asks you about your income, age, and residency in order to tell you which freeware you qualify for.
The qualifications for each specific software may change from year to year. For example, FreeTaxUSA offers free filing for anyone earning less than $41,000, while FileYourTaxes.com requires users to earn between $9,500 and $73,000 and be under the age of 65. (According to Nina Olson, the National Taxpayers Advocate from 2001 to 2019, the system was designed so that no tax software could have a monopoly on free tax preparation, but it had the effect of making the return complicated and more confusing for taxpayers.)
Cash Application Taxes
If you’re doing more than the free file restrictions allow and want to use tax software, another option is Cash App Taxes, formerly known as Credit Karma Tax.
The software offers completely free tax filing with no income restrictions, although it does not handle some complicated tax situations, such as when taxpayers file multiple state tax returns. But taxpayers should note that the company collects the data you enter in order to offer you financial products.
Users must have the Cash mobile app to download the tax software, but not to file their return.
4F: “Forms to fill out for free”
Another free option available to everyone is free forms to fill out. This tool is the electronic equivalent of completing a paper tax return, offering the most common tax forms as PDF files that you can submit electronically.
Unlike tax software, which guides the user through a series of questions and then uses the answers to complete a return, fillable forms assume you know which of the various documents and forms you need and can do the calculation yourself.
“It’s an option for people who are familiar with taxes or have very simple returns, and can literally just type in numbers,” Olson told CBS MoneyWatch.
If you use fillable forms, you will need to create a new account each year because, for security reasons, the IRS purges the information entered from the system at the end of each tax season.
In person: Volunteer Tax Assistance (VITA)
Although the IRS encourages electronic tax filing, many taxpayers still prefer the personal touch. The government runs two volunteer programs to make this possible.
Taxpayers with an annual income of less than $58,000 can get help in person at a Voluntary Income Tax Assistance (VITA) site. These neighborhood sites, often run in partnership with nonprofit organizations or community groups, offer IRS-trained volunteers to help with tax filing during most of tax season.
“It’s a good place to start if someone is a little overwhelmed, they want to hand it over to someone and ask them to do it,” said Phyllis Cavallone-Jurek, executive director of nonprofit Ladder Up. financial advisory non-profit that helps low-income people. people.
The IRS offers a search tool to find sites in your area. Each site is locally managed, so read the details of the site you have chosen carefully. Take note of:
Site opening dates – some close after the last week of tax season while others are open all summer
The hours and days of the week it operates
If an appointment is necessary
If you can file tax returns for multiple years
Whichever option you choose, note that VITA sites are not intended for people with complex tax situations. For example, most construction workers, such as Uber drivers, can use the VITA program, but someone earning income from a rental property cannot, according to Cavallone-Jurek.
The IRS offers guidelines on the types of tax assistance volunteers can provide, as well as what documentation to bring. Taxpayers visiting in person should bring all of their income documents and try to come earlier in the day, Cavallone-Jurek said.
“If you find a site, if it’s open from 10 a.m. to 4 p.m., be there early, don’t come in at 3 p.m.,” she said. “There are a lot of people and it is recommended to go earlier.”
In person: Free tax assistance for seniors
People over the age of 60 can consult a Tax Advice for the Elderly (TCE) site. The program has no income limit and its volunteers are trained to focus on tax issues that affect seniors, such as questions about withdrawals from retirement accounts.
Most TCE sites are operated by AARP’s Tax Assistance Program and can be viewed on its website. Taxpayers can browse programs by type, including in-person, low-contact or all-virtual options. Taxpayers also have the option of filing their own returns using an on-site computer.
Although TCE and VITA are volunteer-run programs, volunteers undergo rigorous tax law training to ensure they can handle a range of tax situations and maintain taxpayer confidentiality, the IRS notes.
Many of the volunteers are students or retirees of accounting or tax law, Cavallone-Jurek said. And IRS ethics guidelines mean volunteers can’t accept tips or sell other services, making these sites truly free for taxpayers.
“We can’t really accept a lollipop or a dollar,” she said.