Whether you anticipate earning a refund or paying a huge tax bill, there’s one expense you might want to skip: a fee to file your taxes.
There are a range of ways to file your taxes for free and even score gratis face-to-face tax help. These options aren’t for everyone, however, and there are a few pitfalls to avoid when utilizing them. Here’s what to know.
[See: Answers to 7 Burning Tax Questions.]
Head to the Free File Alliance. If you’re looking to file your taxes for free, then bookmark the homepage for the Free File Alliance. The FFA is a group of 12 commercial tax software companies that have partnered with the Internal Revenue Service to provide free tax-filing options to low- and moderate-income filers. Companies that offer software programs through the FFA include H&R Block, TaxAct, TaxSlayer and TurboTax.
Some 70 percent, or 100 million Americans, are eligible to use the FFA’s tax-filing programs, says Tim Hugo, executive director of the Free File Alliance. But only about 3 million actually use the service, he says. “The only problem that the Free File Alliance has is that not enough people know about it,” Hugo says.
To qualify to use the software programs offered through the FFA, filers must have a 2016 income below $64,000. Individual tax companies may tack on stricter requirements, including lower income limits and age restrictions. For example, to take advantage of TaxAct’s partnership with FFA, would-be free filers must have an adjusted gross income, or AGI, of $52,000 or less and be younger than 56 (or be eligible for the Earned Income Tax Credit).
The only way to ensure that you’re using the IRS-partnered editions is to enter the tax software through the Free File Alliance online portal, Hugo says. If you don’t, you could end up using a free service from the same commercial lenders’ own websites, which may end up costing you in upgrades, upsells or other surprises.
[See: 10 Smart Ways to Spend Your Tax Refund.]
Explore tax software companies’ own free programs. So, yes, in addition to the IRS-partnered FFA software programs, many tax software providers offer their own free services, accessible through their own websites. They may be worth checking out if you don’t qualify for the Free File Alliance’s tax-filing software programs.
For example, TurboTax has Absolute Zero for eligible taxpayers with simple 1040EZ or 1040A returns, typically available to certain filers who make less than $100,000 and don’t itemize deductions. Likewise, H&R Block markets More Zero, which offers free online filing for federal forms 1040EZ, 1040A and 1040 with Schedule A, plus a state return. The tax company also offers separate free tax-filing programs for eligible military personnel and for eligible filers through a partnership with United Way called MyFreeTaxes.
If you’re looking for a truly free tax-filing experience, be wary of any upgrades or upsells when filing through free programs offered by the tax software companies themselves. The IRS-partnered Free File Alliance has eliminated pop-ups and upsells, Hugo says. But you might not see the same absence of salesmanship on unaffiliated free versions, he says. They “may not be as free as you thought,” Hugo says.
Look for free fillable online forms. For filers who earn more than $64,000 AGI, the IRS offers free fillable forms online. Completing these forms resembles filling out paper tax forms. You won’t have the more robust help of a software system, so make sure that you’re comfortable flying solo. “It’s for people with a little more comfort,” Hugo says.
Likewise, paper forms are free and available at IRS.gov for filers who want to kick it old school.
Find in-person tax help. You can score free in-person tax help from a number of resources. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free IRS-partnered tax help to low-income families and older Americans. You can search for a volunteer program near you through the IRS.gov website.
If you’re looking for free in-person tax help, make sure you find a legit program, like those sponsored by the IRS. Scammers may set up shop in a local library or community center, claim to help you file your taxes and walk away with your personal information or even your refund. “Bad guys come out of the woodwork,” says Jerry Gaddis, enrolled agent, founder and CEO of Tropical Tax Solutions in the Florida Keys. When it comes to free tax help, he says his two chief concerns are security and competence.
[See: 7 Most-Missed Tax Deductions and Credits.]
Check your state program. In many cases, filing your taxes through the Free File Alliance or another free software program can also score you a free state return. If that doesn’t work, check the resources in your individual state. Some states, including Illinois and California, offer their own free tax forms for eligible filers.
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How to File Your Taxes for Free originally appeared on usnews.com
