How to Use IRS Free File

You may be eligible, if you meet certain income guidelines

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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 program had filed more than 60 million returns since 2003. However, Free File is being significantly underused by eligible taxpayers, meaning that even more people are eligible to use it to file their tax returns for free.

Eligibility for Free File

Eligibility for the IRS Free File depends on your adjusted gross income (AGI), and about 70% of taxpayers qualify. That works out to about 100 million Americans. 

The magic income number is $72,000. If your AGI was that much or less for the 2020 tax year, you can use the Free File software to prepare and file your return.

If your AGI is higher than $72,000, you can still access free, fillable tax forms on the IRS website. However, you won’t get the interactive, personalized assistance that Free File provides.  

Keep in mind that the $72,000 is your adjusted gross income, which is what remains after you take certain adjustments to income. This not necessarily everything you earn during the year, meaning you may be eligible even if your salary is over $72,000.

The $72,000 AGI figure applies to the 2020 tax year, meaning tax returns filed in 2021.

Benefits.gov offers an online eligibility checker if you’re uncertain whether you qualify.

Free File Alliance Members

The Free File Alliance provides a list of its member software providers on its website. The providers include familiar and well-regarded names like 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 provides a free online tool to help taxpayers find the Free File option that is the best match for them. It doesn’t recommend or endorse any particular provider. 

Age Restrictions

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.

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. 

If you aren't comfortable completing your return by hand without guidance from software prompts, you should choose another method for 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.

Pros and Cons of Using Free File

Pros
  • It’s free

  • A large number of Americans are eligible

  • The software asks questions to walk you through the steps of filling out forms correctly

  • 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

Cons
  • Certain internet service providers, security software programs, and web browsers may block access or result in compatibility issues with some software providers

  • You may run into glitches or lose information 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 

Browsers Compatible with Free File

Google Chrome, Microsoft Edge, Safari, and Mozilla Firefox are generally compatible with Free File.

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. These have 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.

If you run into problems, the IRS suggests trying another internet service provider, browser, or computer. You can also contact 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 obscure tax forms
  • Includes multiple schedules
  • Includes income from a business that you own

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.

If your tax situation is relatively simple, however, and you are comfortable with both computer software and the English language, Free File may be the best option to file your taxes quickly and inexpensively.