How to File Your Taxes for Free
The federal government can only operate with the help of the millions of individuals who earn income in this country and dutifully pay taxes. You would think that, in order to ensure a smooth revenue stream of considerable size, the IRS would make filing taxes as easy and painless as possible. That’s obviously not the case, considering the tax code is one of the most confusing human inventions on the planet today. The IRS does ensure that filing federal tax returns is completely free for millions of Americans with the help of a select number of software companies, provided the taxpayer meets a few eligibility requirements. If you can file your federal taxes for free, do so. There’s no point in spending unnecessary money.
If your taxes are complicated, and you require a professional to review or complete your forms, or you require some features not available in the free editions, then go ahead and pay for software or pay a professional. For the cast majority of Americans, free e-filing is a great option.
Starting with the most popular software companies, here are the best options for filing your taxes for free. I’ve updated this list for 2011 returns filed in early 2012. The deadline is April 17, 2012.
TurboTax Online. TurboTax tops the list because they are fast to adjust to tax law changes, it’s part of a large company that has a strong reputation for personal finance, and there is a large user community for peer-to-peer support. The TurboTax Freedom edition is free for e-filing if any of these criteria apply to you:
- Your adjusted gross income (AGI) is $31,000 or less, or
- You are active military with an AGI of $57,000 or less, or
- You qualify for the Earned Income Tax Credit (EITC)
I’ve used TurboTax in the past, and here is a TurboTax Online review as of the latest version of the software. For 2011 returns filed in 2012, TurboTax has lowered the maximum AGI for filing for free, reducing the availability of the program. If you live north of the border, you’ll need to access TurboTax Canada.
H&R Block. H&R Block’s primary business is in seasonal storefronts where taxpayers can bring their financial documentation into a specialist to work through the forms in person. The company also offers the “At Home” filing service for those who like the do-it-yourself approach. While the company normally charges for federal tax filing, if you use the At Home service and meet the following condition, you can e-file your federal taxes for free.
- Your adjusted gross income (AGI) is $57,000 or less, and
- You are age 52 or younger
Here is my review of H&R Block’s software, updated recently to reflect the changes since last year. H&R Block has also lowered the maximum AGI, but to a lesser degree than TurboTax has, and because the IRS has stipulated that $57,000 be the maximum AGI, though companies are free to set a lower maximum. In other words, this is the highest maximum allowed by the IRS.
Free TaxAct. When TurboTax was no longer free for me, and before moving to an accountant to handle my business, I was still able to e-file for free using TaxAct. TaxAct doesn’t have the brand strength or the large community of the two above software services, but the calculations are correct and the system that guides you through your calculations is just as complete. You can e-file your federal taxes for free using Free TaxAct if the following conditions apply.
- Your adjusted gross income (AGI) is $57,000 or less, and
- You are between the ages of 19 and 55 inclusive
eSmart Tax powered by CompleteTax. To e-file for free, your AGI must be less than $57,000 and you must be age 52 or younger.
TaxSlayer. TaxSlayer offers free e-filing for taxpayers with an AGI of $57,000. You must be age 25 or younger, be active in the military, or be eligible for the Earned Income Tax Credit in order to qualify for free federal e-filing.
Other free e-filing options are limited by the state in which you live in addition to other limitations similar to those above.
The deadline is approaching fast, and maybe taxpayers wait until the last possible minute to file. I suggest starting as early as possible, once you have all the information you need, to ensure you don’t encounter any delays or glitches. I have never heard of there being any software problems at the last minute, but it’s better to be safe than owe penalties to the government.
I’ve been using TaxAct (SW App version & not the online version) for the last 5 years and it has been extremely easy and quick to fill out and e-file online…and have never paid anything to use them. Thanks.
thank you flexo, i need to forward this to a friend who still has not done his taxes…
I have used TaxAct over TurboTax for years. I like TA’s format over TT. Both are good, I guess it’s just a matter of preference.
Turbo Tax worked well for me in the past but I didn’t use it this year. I printed forms and did them the old fashioned way, in pencil and then ink. Some dinosaurs don’t like change. What do people do who don’t have computers? It seems unfair.
Just a note, turbotax will also let you file the state for free in some states…BUT they make it really hard to get to it. You have to use the “tax freedom” edition. Despite there being an easily found (and googled) link for this: http://turbotax.intuit.com/taxfreedom/ it’s very misleading. The big button there in the middle that says “I qualify start now” will only get you a free federal filing, and to add insult to injury, if you figure this out and switch to the tax freedom (which includes the free state filing) it wont let you copy the data you have already entered over to the new forms. You have to click the small “learn more” link under the states, then select your state (if your state participates). Then navigate through your states website to eventually get to a page listing what software will let you file for free. The crazy thing is, that for turbotax once you find the link on the state site it goes back to EXACTLY THE SAME PLACE: http://turbotax.intuit.com/taxfreedom/!!! Presumably it’s set some sort of cookie that authenticates you properly. NOW if you click on the “I qualify start now” you’ll be in the “tax freedom” edition, rather than the “free edition”.
Nice that they offer it for free, but someone creative spent some time designing this to trick people into paying for state returns when they don’t have to…
is taxslayer a good e-filing service that anyone has used?
My girlfriend used TurboTax this year and it made an error that slipped by her notice before she filed back in March. She had to take the extra step to file a 1040X this year to amend the return, so always triple check what any program will generate for you!
I had a lot of issues using Turbo Tax this year. I would definitely suggest trying out MyFreeTaxes.com (from H&R Block) super smooth.
According to the TaxAct website, it’s free to file for everyone “no income or age restrictions”.
Yes, and it’s interesting. Through the federal “Freefile” program, TaxAct has these income and age limitations. On the other hand, if you visit the website through the links contained here or by visiting TaxAct online directly, there is an option for completely free federal e-filing. There may be some other software limitations to the non-income-restricted version, though. I’ll see if I can find more information describing the differences between the “Freefile” (income and age limited) free version and the regular free version.
Any update on tax act age, income or residence restrictions? Does it work well using iPad?