How Does IRS Free File Work?

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Introduced in 2003, Free File is a program created by the Internal Revenue Service in partnership with a number of online tax software providers to provide free income tax preparation and filing. From mid-January through mid-October each year, the Free File program offers two options to taxpayers: online tax software from a Free File Alliance partner, or Free File Fillable Forms. Both options include federal e-filing at no cost.

Eligibility for Free File

About 70 percent of American taxpayers are eligible for Free File, according to the IRS, but there are some restrictions. The eligibility requirements vary from year to year, and you may not qualify every year. As of 2018, you must have an Adjusted Gross Income (AGI) of $66,000 or less to use Free File Software. If you meet the requirements, you just need an email address, a copy of your last tax return, and any documents you have pertaining to your income and deductions.

Many familiar companies, like Intuit TurboTax and H&R Block, offer their software through the Free File program. These providers may set some of their own additional requirements for use. For example, they may require that your AGI be even less than the IRS requirement, or they may have age and location restrictions.

If you make more than $66,000 per year, then you can still use Free File Fillable Forms. This option is available to anyone, regardless of income level. Fillable Forms gives you digital versions of the IRS tax forms so you can complete them using your computer. This option doesn't walk you through preparing taxes as tax software does, but it does some basic math calculations and allows you to e-file your return at no cost. As of 2018, Free File Fillable Forms did not support state tax filing.

Important Notes About Free File

Once you choose a tax software title through the IRS Free File website, be sure you only access the tax software website through the IRS site to avoid being charged for your tax return. Once you click on the tax software website of your choosing, you'll see a notice that you are leaving the IRS site, and you can proceed from there.

When it comes to the security, the IRS notes that it protects your information from any unauthorized access, and it does not retain any taxpayer information on the Free File website. In addition, the software providers that participate in the Free File program can't use your information for any purposes beyond tax preparation without your consent. The companies are also subject to the Federal Trade Commission's Privacy and Safeguards Rules and IRS e-file security and privacy standards.

If you see ads in the software used through Free File, you are under no obligation to buy anything. The IRS stipulates that free tax software providers in the Free File program not include ads that nag you to upgrade to a paid version, so this shouldn't be an issue.

If you don't qualify for Free File or don't want to use it, there are many other free tax software options available as well.