In almost every country, taxpayers get to calculate what they owe in taxes for free.
In the US, that’s not the case. According to a study by Nerdwallet and Harrispole, US taxpayers make big tax software companies richer by an estimated $13B every year, just to file their taxes.
Interestingly, for the last 20 years, the IRS has had a program for e-filing taxes for free. But taxpayers don’t utilize it to its full potential. In 2022, only 2% of taxpayers used it even though 70% of taxpayers were eligible. This 70% includes the lowest earning taxpayers of the country, mind you.
Clearly, there is a knowledge gap preventing eligible taxpayers not to e-file taxes for free. To help you with that (also October 16, extended deadline is close), let’s explore 5 free tax filing options.
There are multiple ways to file your taxes for free: from a special e-filing option for the military community to the IRS’s own free filing program. But not all of them are accessible to everyone. You should match the respective criteria for using those options. Also, please note you may not be able to file all state taxes for free.
Nevertheless, here are some best options for you.
Back in 2002 the IRS decided to partner with an organization “Free File Alliance” to offer a free filling option to US taxpayers. Several major tax prep software companies, including TaxAct and TaxSlayer, are currently part of this partnership.
The IRS Free File program is a result of this private-public collaboration. For 2023 tax filing season (extended up to 16th OCT, 23), if you had AGI of $73,000 or less in 2022 you are eligible to use the program.
However, you may not be able to pick any tax software available via the Free File program. Each tax prep provider has their own eligibility criteria (age or AGI brackets). Also your choice of tax software may not offer free state tax filing (hint: not always). So don’t forget to check that.
You, as a qualified taxpayer, can access the Free File program via the IRS website during the entire tax filing season, from mid-January to mid-October.
During your guided tax filing, keep income statements (such as W2 or 1099 forms), prior year AGI, dependent or spouse information and adjustment to income information handy. These pieces of information will be required while both looking up for the right tool and filing your taxes.
If your AGI is over $73,000 (in fact, anyone, even individuals with AGI of under $73000) you may want to give another alternative a try: free fillable IRS forms.
Unlike Free File, here you won’t be enjoying any guided assistance. You need to do the math and then fill up your tax forms. However, these forms are free and can be used for free e-filing.
If you need help with your tax filing, the IRS’s Volunteer Income Tax Assistance program can be another great option. The IRS has set up many VITA sites where you can get tax prep assistance from volunteer members.
They offer help to any taxpayer who:
- Falls in a lower income bracket
- Has disabilities
- Has limited English-speaking capabilities
Generally, you need to be making $60,000 or less to be qualified for this program.
Now how does the whole thing work?
Though VITA sites come under the IRS rules, these are run by partner organizations and local volunteers. These volunteers may not be your typical CPA or enrolled agents. However, that doesn’t make them less qualified. After all, these volunteers go through a rigorous tax law competence program to be qualified to help you with taxes. Also, a more experienced volunteer will review after initial completion. Once reviewed, your taxes are filed electronically.
VITA tax services help you with your income tax returns (Form 1040). Along with that you may expect some help with returns that deal with certain types of retirement income, the earned income tax credit and interest income from a bank. If you have received some self-employment income from 1099-MISC or 1099-NEC forms, that will be taken care of too.
However, if your tax situation is a bit complex, then it is not the right service. For instance, VITA volunteers can’t help with following:
- Schedule C with loss, depreciation or business use of home.
- Complicated schedule D
- Returns with casualty/disaster losses
- Form 8606 (non-deductible IRA)
- Form SS-8 (determination of worker status).
If you want to know more about services offered at VITA sites, read this IRS document.
Now, since VITA service is entirely dependent on their volunteers and their availability, you will find these locations offer services in three different ways.
- Any VITA site that offers in-person assistance requires an appointment. Make sure you carry your government ID, social security card, ITIN documents, prior-year tax return and relevant statements of income with you.
- With drop-off service, you are required to drop off your tax document at the VITA site. Once your tax is quality reviewed you will be asked to give your consent. Only after that, your taxes will be e-filed. You pick up your hard copies later.
- The virtual tax service is totally online based. You will send your all the tax documents through a safe online platform to tax volunteers. They can contact you for additional information. Once prepared, your tax return will be sent back to you for your review before it is e-filed at no cost.
The IRS has a list of all the VITA sites across the country along with relevant details (operational hours, language supported etc). Alternatively call 800-906-9887 to spot the nearest local sites for you.
Tax Counseling for the Elderly is very similar to VITA, but it prioritizes taxpayers over age 60. Under this program, tax volunteers pay special attention to tax returns with pension and retirement related taxes. That being said, even if you are not in that age bracket, you still can get some help.
Like VITA, community organizations and volunteers run these sites and provide free tax e-filing services. These volunteers also go through tax law competence programs. Therefore, your tax filings will be pretty accurate.
Under the TCE program you will only get basic tax prep service (again, similar to VITA). In some sites, you may get a chance to file your taxes online using softwares with volunteers standing by your side (not literally) for any assistance.
The IRS website also lists all the TCE sites along with other details. If you decide to visit one, then don’t forget to bring your tax documents.
If you are an active duty service member or veteran (or a family member who is managing taxes for an eligible server member) you are in luck. The Department of Defense offers a separate program for military members and their families to file (or e-file) their taxes for free. This service is available from mid-January to mid-October (extension deadline)
Under this program, an eligible taxpayer will get access to entirely free tax software, financial and legal resources. The best part is, there is no income, age or other limitations.
When you are stuck, you can call 800-342-9647 to book an appointment with a Military Onesource (the provider of the software) tax consultant. Alternately, you can arrange a face-to-face meeting with a tax expert at any VITA location (or installations’ legal assistance office). Support from Military Onesource is available 24/7.
In case you are wondering, only following taxpayers can access this service:
- Active-duty service members, spouses and dependent children of the eligible service members
- Members of the National Guard and reserve
- Retired and honorably discharged service members, including Coast Guard veterans
- A family member who is managing the taxes of a service member while the service member is deployed
- A family member of a severely-injured service member incapable of handling their own taxes.
- Eligible survivors of active-duty, National Guard and reserve deceased service members.
For more information and access to the software you can visit Military OneSource website.
Many tax softwares offers limited free service. You can just do very basic tax filing using their applications and send it to the IRS electronically.
Please note, free service you get from a site of a Free File tax provider may not be the same as what they are offering under the Free File program. In most of the cases, their Free File services offer more tax filing flexibility. So, if you are using free packages directly from their websites, don’t be surprised if you need to pay a little.
And if you don’t want such surprises, read what the provider means by “simple tax return.” Most packages offer Form 1040 returns and can help you to claim tax credits. Some state tax returns are also free. However, software providers can ask for free if you are filing around the deadline.
Usually, if you earn only from one job and don’t itemize your deductions, this can be a way to e-file your taxes for free. However, it will probably cost you if you need anything beyond bare minimum.
Go through any reputed tax software website and you will find similar free packages.
Many taxpayers pay money to file their taxes. But there are ways to do it free and these are as accurate and reliable as any paid software. We have covered five of such options. Unless you are running a business with multiple employees or earning a super high salary, there is always a way to spend nothing for e-filing taxes.
However, if you are running a decent size business or have complex business taxes to deal with, Fincent can help. Any Fincent user can opt for Ficent’s special program for getting their taxes filed well ahead of the deadline. If you want to know more about the Fincent application and additional services, please check out the website.
Fincent: Your Business's Personal Financial Wizard - From Bookkeeping to Tax Filing