How to Use IRS Free File
You may be eligible, if you meet certain income guidelines
The federal Office of Management and Budget’s Quicksilver Task Force obligated the Internal Revenue Service (IRS) to start offering free tax preparation and filing to eligible taxpayers back in 2001. As a result, the Free File Alliance was formed by the IRS in 2003.
Numerous private-sector tax software providers have teamed up with the IRS to provide free services for virtually all taxpayers—subject to certain rules. If your income is higher than the eligibility limit, you might be entitled to more limited assistance.
The Free File Alliance indicates that the program had filed more than 56 million returns since 2003. Benefits.gov put the figure at a more conservative 46 million, but that was back in 2016. And the Bipartisan Policy Center insists that the alliance is being significantly underused by eligible taxpayers.
Eligibility for Free File
Eligibility for the IRS Free File depends on your adjusted gross income (AGI), but the Free File Alliance has indicated that about 70% of taxpayers qualify. That works out to about 100 million Americans.
The magic income number is $69,000. If your AGI was that much or less for the 2019 tax year, you can use the Free File software to prepare and file your return. Otherwise, you can still access free, fillable tax forms on the IRS website, but you won’t get the interactive, personalized assistance provided by the software providers.
On the bright side, that $69,000 figure is your AGI, which is what remains after you take certain adjustments to income. It’s not necessarily everything you earn during the year.
The $69,000 AGI figure is effective as of January 2020 and applies to the 2019 tax year.
Benefits.gov offers an online eligibility checker if you’re uncertain whether you make it under the $69,000 AGI wire. But even if you do, you could still face other glitches.
Free File Alliance Members
The Free File Alliance provides a list of its member software providers on its website. The alliance comprises 10 different software programs that have agreed to this partnership through Oct. 31, 2021. The providers include familiar and well-regarded names like H&R Block, Intuit, TaxACT, and TaxSlayer.
The IRS screens each member for security and privacy standards, and they all meet the Federal Trade Commission (FTC) Privacy and Safeguards Rules and IRS e-file regulations. The IRS doesn’t recommend or endorse any particular one of them.
The IRS places restrictions and limits on just how many taxpayers Free File software providers can serve each year, according to the Bipartisan Policy Center. As a result, some alliance members have imposed their own additional restrictions for eligibility. Most of the 10 providers have set eligibility requirements. According to the Bipartisan Policy Center, three have no age limit, while five can only be used by taxpayers under age 60.
The IRS offers a look-up tool to help you find the provider that’s right for you.
Step-by-Step Overview of Free File
The IRS offers access to the alliance members’ tax preparation software on its website. You’re not obligated to use any particular provider—you can select whichever one works best for your own situation. Click on the link, and the IRS site will send you to that provider so you can review eligibility requirements and find out exactly what each offers.
You must then create an account, and the software provider will walk you through the completion of your tax return, step by step. It will ask you a series of questions and hunt down tax breaks and the best filing options for you, based on your answers.
Each provider will electronically file your return for you and you’ll receive an email receipt when it’s been accepted by the IRS. Both preparation and filing of federal returns are provided free of charge.
You can make payment for free, too, if it turns out that you owe taxes. You can do this through IRS Direct Pay.
Don’t forget to print out a copy of your return. Printing is free, too.
Free, Fillable Forms
You have another option if your income is over the threshold for eligibility with the free file software providers: the IRS also offers free, fillable tax forms.
The biggest difference here is that you won’t have helpful program nudges to walk you through the ins and outs of completing these forms. They’re still online, but you must enter all the data yourself, so you’ll have to know where to place the information. The forms don’t self-check for errors the way the free software programs do, and they’re capable of doing only very basic math.
You can e-file your return and forms after they’re completed. You don’t have to print out the forms and snail-mail them in.
The IRS advises, “If you’re not comfortable completing a paper return by hand, without software to guide you, you should consider another method of filing your tax return.”
Only free, fillable forms for federal tax returns are available. You can’t use this service to prepare your own state return.
A large number of Americans are eligible
Knowledge of the U.S. tax system is not necessary with free file since it’s pretty much a matter of just answering questions
Taxpayers can file without the help of a tax professional or paying for software
All information entered is protected from unauthorized access
Customer service from the software providers is free as well
Certain internet service providers, security software programs, and web browsers may block access or result in compatibility issues with some software providers
You could potentially lose all the information you entered if you access the fillable forms via your mobile device
Not all software providers will prepare state returns for free—you might have to pay for these
The “Value Added” tab in some of the software providers’ programs will pull you out of the Free File program and drop you into a paid tax preparation program
Safari has been known to result in display and compatibility issues. Google Chrome, Internet Explorer, Microsoft Edge, and Mozilla Firefox are all OK, however. The IRS suggests trying another internet service provider, browser, or computer if you run into problems, or contacting the software provider—not the IRS.
Who Should Use Free File?
Free File is considered to be most suitable for those with relatively basic tax situations. The software programs do provide a variety of different tax forms, but only the most common ones, so this program is probably not for you if your return requires filing a somewhat obscure tax form or schedule.
You’ll also need to be comfortable with the English language. As of 2019, none of the software providers are set up to accommodate those who speak English as a second language or lack some proficiency with it.
You also might be out of your element if you’re not particularly computer-savvy, or if you’re using older equipment, such as an older browser. They’ve been known to result in printing and display problems. You’ll also need a valid email address.
The IRS recommends an Intel Core 2 Duo 1.8 GHz processor, if you’re using the fillable forms, and memory of at least 1 GB RAM. You’ll need a high-speed internet connection and Acrobat Reader 8.0 or newer for printing.