In IR-2020-6, the IRS announced its free file program. It’s announcement reads as follows:
Taxpayers whose adjusted gross income was $69,000 or less in 2019 – covering most people – can do their taxes now, and the Free File provider will submit the return once the IRS officially opens the 2020 tax filing season on January 27 and starts processing tax returns.
“Free File online products offer free federal tax return preparation, free electronic filing and free direct deposit of refunds to help get your money faster,” said Chuck Rettig, IRS Commissioner. “The IRS has worked to improve the program for this year, and we encourage taxpayers to visit IRS.gov, and consider using the Free File option to get a head start on tax season.”
For 2020, the Free File partners are: 1040Now, Inc., ezTaxReturn.com (English and Spanish), FileYourTaxes.com, Free tax Returns.com, H&R Block, Intuit, On-Line Taxes, Inc., Tax ACT, TaxHawk, Inc. and TaxSlayer (English and Spanish).
Since its 2003 debut, Free File has served nearly 57 million taxpayers, saving an estimated $1.7 billion calculated using a conservative $30 tax preparation fee. Free File is a public-private partnership between the Internal Revenue Service and Free File Inc. (FFI), a consortium of tax software providers who make their Free File products available at IRS.gov/FreeFile.
Here’s how Free File works:
- Go to IRS.gov/freefile to see all Free File options.
- Browse each of the offers or use a “look up” tool to help you find the right product. Each Free File partner sets its own eligibility standards generally based on income, age and state residency. But if the taxpayer’s adjusted gross income was $69,000 or less, they will find at least one free product to use.
- Select a provider and follow the links to their web page to begin a tax return.
- Complete and e-File a tax return only if you have all the income and deduction records you need. The fastest way to get a refund is by filing electronically and selecting direct deposit. If you owe, use direct pay or electronic options.
Most companies provide a special offer for active duty military personnel who earned $69,000 or less. Those taxpayers can choose from any participating Free File provider regardless of the company’s other eligibility standards. Free File also can be a valuable tool for younger taxpayers or first-time filers with modest incomes as well as retirees and working families seeking to save money.
Free File providers also offer state tax return preparation, some for free and some for a fee. Again, use the “look up” tool to find the right product. There are two products in Spanish. With Free File, you can even use any digital device, personal computer, tablet or smart phone. Free File products are mobile enabled so you can do your taxes on your smart phone or tablet and e-File with your hand-held device.
You should also know your protections under the IRS Free File program. They include:
- Get a free federal tax return – As long as you qualify for the Free File federal return offer, you must not be charged for preparation and e-filing of a federal tax return.
- Be protected from unnecessary fees – Other than state tax preparation fees and a possible fee if you choose to continue with tax preparation when you don’t qualify for the federal return offer, you must not be offered or solicited marketing, promotional rebates, or any other form of selling activity on the Free File company’s website. Any state preparation or non-qualifying fees must be disclosed on the company’s Free File landing page.
- Be guided in your choices – If you find you don’t qualify for a specific company’s Free File offer after visiting their Free File website, you may return to the IRS.gov Free File website to seek another Free File online offer. Each Free File company will provide you information when you don’t qualify, with the option to select a link to bring you back to IRS.gov Free File site to select another company.
- Get help if you need it – If you need help when you are on the company’s Free File website and doing your taxes, you may refer to the company’s free customer service options.
- Be reminded of Free File – If you used Free File last year, you should receive an email from the same company product that you used, welcoming you back to Free File. The email should include a link to the company’s Free File online program and explain how to file with the program.
- Be protected from bank product fees – As part of Free File, you must not be offered any bank products such as Refund Anticipation Loans or Refund Anticipation Checks.
- Get help finding a free option for you – IRS offers a Free File online Look-up tool to help you find an offer that best meets your needs.
- Get important information on possible charges for state returns – Many Free File online products offer free state tax preparation. Some charge a state fee. Be sure to read each company’s information carefully.
The IRS also offers Free File Fillable Forms, which is the electronic version of IRS paper forms to any taxpayer regardless of income. That product will be available when IRS opens the tax filing season on January 27. Free File Fillable Forms is best for taxpayers who are comfortable doing their own taxes with little assistance. Free File online products will be available from January through October for extension filers. Taxpayers who cannot meet the April 15 deadline, also can use Free File to file extensions regardless of their income.
Free File is just one way the IRS provides free tax preparation options to taxpayers. Taxpayers wanting more personal help can visit one of thousands of community volunteer sites through the Volunteer Income Tax Assistance program or Tax Counseling for the Elderly offered by AARP. Trained volunteers will prepare returns for free for taxpayers who generally made $56,000 or less.
Taxpayers using their mobile phones or tablets to do their taxes can either go directly to IRS.gov/freefile or they can use the IRS2Go app and select “Free Tax Help” to find information on Free File and the VITA locator tool.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.