There are many reputable free online tax preparation and filing services. There are also many scams and schemes to get your personal information, so it is important to choose carefully when filing your taxes online, particularly through a company you are not familiar with. Following the steps below should help make the process faster and easier.
- Start close to home: Many credit unions and banks have special arrangements for their members. So do local organizations for seniors, veterans, the disabled and members of certain professions. Check the statements and newsletters from these organizations around the end of the year to see what they provide.
- Check for IRS efile authorization: The IRS certifies certain services as "Authorized IRS Efile Providers." An authorized online provider will usually display the blue and yellow IRS authorization logo prominently on its homepage. This is especially important if you found the service by using a search engine or responding to an email solicitation. If you have any doubts, look elsewhere.
- Go to the source: Visit the IRS Free file homepage at the IRS for free Efile programs and providers. This list is updated regularly and contains only those vendors that meet the Internal Revenue Service standards for accuracy, reliability and appropriate use of taxpayer information.
- Figure out if you are eligible: Most free Efile programs have limitations in terms of income and type of return. Also, they may not file a state return for free or they may not be able to do a state return at all. Read the guidelines carefully before committing to a provider. Some things to look for:
- Income level: Most providers will only file your return for free if you have an adjusted gross income of less than $50,000, regardless of your filing status. Your adjusted gross income is all the income you receive (or that you and your spouse receive, if filing a joint return) in the form of money, goods, property or services that are subject to tax, minus certain expenses (such as student loan interest.)
- Fees for state returns: While the Federal return may be completed for free, a state return usually is not. In addition, if you need to do a more complicated state return, such as a part-year resident return, the site may not be able to handle it.
- Age: A few sites will only file free returns for those under 50, since those over 50 may qualify for help where they are considered senior citizens.
- Complexity: If you have self-employment income, rental real estate, a lot of stock transactions or certain other unusual tax situations, you may not qualify at many sites.
- Be prepared: Make sure you have all your forms before you start filing. While some sites may let you save a draft and finish later, not all will, so you will want to complete your return in one sitting.