Each year, millions of Americans are eligible to file their taxes for free online using free tax software but don’t. It’s a head-scratching trend, until you do a quick Google search or consider the ads you’ve viewed in the weeks leading up to tax season. Experts say the big names in paid tax preparation simply dominate the space.
“Free file has been a gem that people just don’t know about,” says Tim Hugo, executive director of the Free File Alliance. “Last year, there were 100 million eligible and we had about 4 million people use it. The IRS 10 or 12 years ago had a $20 million advertising budget and last year it was zero.”
Two of those big names in tax preparation recently pulled out of the Internal Revenue Service’s Free File Program. H&R Block exited the government’s Free File Program in 2020, and TurboTax followed suit in the summer of 2021, leaving taxpayers with fewer free options amid a pandemic that led to increasingly complex tax situations for many Americans.
“Taxes have to work for everybody, and right now it’s only working for a subset of taxpayers,” says Ben Borodach, co-founder of April, a new tax platform aimed at offering affordable, automated filing options. “The tax companies may offer a free solution, but ultimately they’re motivated by getting you to pay them money.”
This year in particular, it may make sense for individuals who have not previously filed a federal tax return to do so in order to take advantage of economic impact payments and refundable tax credits. Programs like the IRS Free File can help filers take advantage of the expanded child tax credit, stimulus check recovery rebate credit and other credits like the earned income tax credit.
[How to Find Tax Help for Free]
What Is IRS Free File?
If you earn an adjusted gross income of $73,000 or less, you could be filing your federal tax return using free tax software online.
The IRS partners with eight online providers that can answer simple tax questions and offer guided preparation. When filing in 2022, taxpayers can use these eight providers through the IRS.gov website to file for free:
— exTaxReturn.com
— Free1040TaxReturn.com
— Tax Act
— FileYourTaxes.com
— TaxSlayer
— FreeTaxUSA
— 1040Now
— OnLine Taxes
Only these partners are vetted and approved by the IRS to enter the Free File Program. Get started by visiting IRS.gov/freefile.
[How to Get the Biggest Tax Refund in 2022]
How to File a State Tax Return for Free
If you qualify for the federal Free File Program, you can also file a free state tax return online through guided preparation in these states, according to the IRS’s website:
— Arkansas
— Arizona
— Georgia
— Idaho
— Indiana
— Iowa
— Kentucky
— Massachusetts
— Michigan
— Minnesota
— Missouri
— Mississippi
— Montana
— New York
— North Carolina
— North Dakota
— Oregon
— Rhode Island
— South Carolina
— Vermont
— Virginia
— West Virginia
— District of Columbia
Some states have no income tax, alleviating the need for a state return, and additional states may have their own unique options for low- and middle-income filers. Visit your state’s tax office or website for more information.
[Read: How to Find a Reputable Tax Preparer Near You]
Other Free Resources for Tax Help
In addition to IRS Free File and other free state return filing options, taxpayers at any income level can use free fillable online forms, and low-income or elderly taxpayers can take advantage of community tax preparation help.
Separate from the IRS Free File Program, tax providers may offer their own free products, but experts caution taxpayers to read the fine print and be cautious of any upsells and upgrades for a fee. Taxpayers can also get filing help from programs like the IRS’s Volunteer Income Tax Assistance and Tax Counseling for the Elderly, MilTax filing service, or the AARP Foundation Tax-Aide program, which opens Feb. 1.
“For the 2022 tax season, Tax-Aide will offer several tax preparation options, including in-person, online, or low contact sessions, which allow taxpayers to drop off their papers (or have them scanned) and return to review,” Lynnette Lee-Villanueva, vice president of Tax-Aide at AARP Foundation, wrote in an email. “We’re also offering taxpayers free access to software so they can prepare their own taxes, and if needed they can request help from a Tax-Aide IRS-certified counselor to coach them through the process through computer screen-sharing.”
Local community centers, schools and libraries may also be resources for free tax help and filing.
“You can’t dismiss these organizations that have many professionals who do want to help people who want to file for free,” says Jody Padar, a certified public accountant and author of “The Radical CPA.” “Check out those local organizations that are there to help out.”
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How to File Taxes for Free originally appeared on usnews.com
Update 01/18/22: This story was previously published at an earlier date and has been updated with new information.
