Tax Filing For Free

Category: Finance

The good news is: about 70% of U. S. taxpayers can get free online tax preparation and e-filing this year. The bad news is: you have to pick your online tax service very carefully. Here's what you need to know...

Options for Free Tax Return Preparation

Dozens of firms now offer free online tax preparation and e-filing. It’s not just for simple, wage-only taxpayers anymore; full 1040 returns with all schedules and worksheets can be prepared and filed online for free.

In general, anyone with Adjusted Gross Income of less than $60,000 can get free online tax preparation software and e-filing. However, the multitude of offers has more rules, exceptions, and confusions than cellular phone service contracts.

For example, here are qualifications for TurboTax’s offer of a free Federal tax return:

Free Tax Software

  • Adjusted Gross Income: $31,000 or less, or
  • $60,000 or less for Active military, or
  • Eligible for the Earned Income Tax Credit, and
  • Live in any State

Other services have wildly different qualifications. For FreeTaxUSA®, it's:

  • Adjusted Gross Income: $60,000 or less, and
  • Age: between 17 and 75, and
  • Live in any state, except: AK, FL, NV, NH, SD, TN, TX, WA and WY

For H&R Block's Free File:

  • Adjusted Gross Income: $53,000 or less, and
  • Age: 53 or younger as of 12/31/2014
  • Free STATE tax filing if you live in AR, AZ, GA, IA, ID, IN, KY, MI, MN,
    MO, MS, ND, NC, OK, OR, PA, RI, SC, VA, VT, WV, or DC.

As you can see, State tax returns add another level of complexity. Some services throw in free State tax returns; others charge a fee even if you get a free Federal return. Some services offer a limited range of State returns.

Choosing a Free Online Tax Service: The IRS Wants to Help!

The IRS devoutly prays that you will file electronically (much easier to audit your return that way) , so it makes a pretty good effort to help taxpayers find a compatible online tax preparation and filing service. Just hop over to the agency’s Help Me Find Free File Software page and answer six simple questions.

Beyond finding a service that will do the Federal and State returns you need for as little money as possible (ideally, free), it’s impossible to say whether one online tax service will save you more money than another. Each has a unique approach to “interviewing” filers, asking different questions in different ways to elicit data about deductions, credits, and so on. A taxpayer’s answers may differ depending on how a qualifying question is asked. So you may get different results from TurboTax than you will get from H&R Block.

Thanks to the power of “free,” you could try multiple online tax services and actually e-file with the one that yields the most favorable answer. But that would be like having multiple teeth drilled for free and filling the one that hurts the most. If your tax situation isn’t very complicated, then any variance between online services should be negligible. Look for one that offers free Federal and State returns and e-filing.

The Do-It-Yourself Option

If your income or age disqualifies you from using one of the free online tax prep services, you can still get free tax software in the form of FreeFile Fillable Forms. These online versions of every IRS form won’t give you advice or hold your hand; you need to know what forms you need. On the other hand, if you know your tax situation well then you don’t need to waste time on all the hand-holding that novice-oriented tax programs provide.

These forms are “intelligent” in that they can perform basic math, e. g., totaling all of the lines of data you enter in a form, multiplying dependents by exemption amount, etc. But they don’t offer advice and explanations as the pricey programs do. This seems like a good option if your job and financial situation hasn't changed since last year. Just look at last year's tax return, see which forms you filed, and you should be good to go.

There are still many taxpayers who haul shoeboxes full of receipts to a tax preparer’s office, and there may be a handful who still struggle with paper and pencil five minutes before the April 15 tax return filing deadline. But the majority of Americans now do their own taxes using software, and for the savvy ones there is no need to pay for tax software.

How will you get your taxes done this year? Post your comment or question below...

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Most recent comments on "Tax Filing For Free"

Posted by:

Steven Bulger
05 Feb 2015

Do you know which tax preparer software company does not charge to have your refund direct deposited? I have dealt with some e-filers that are free but charge to have your refund direct deposited to your checking account.

Posted by:

05 Feb 2015

TaxACT ( offers free online prep and filing of Federal returns without the low-ish income restrictions of some of the others. They also handle semi-complicated things like capital gains, charitible contributions and Roth conversions. I've been using TaxACT for years, have done spot checks by manually comparing with IRS worksheets/forms, and they've been reliable. State filing isn't free, by my state offers free online filing, so I just have to copy a few numbers from the Federal return into the state system and file from there for free.

The only downside for TaxACT is that they will nag you with numerous offers to upgrade to the paid version as you complete your Federal taxes. You need to be diligent and ignore those nags.

Posted by:

05 Feb 2015

I have been using Free Tax for several years now and I am 87 years old and they have never charged because I am over 75. I pay for the State of Michigan and feel it is worth that charge about $10

Posted by:

05 Feb 2015

How can these companies afford to provide tax filing services for free? And on a totally unrelated subject, do I need to tell them my social security number and all the details of my finances?

Posted by:

Larry Petz
05 Feb 2015

Your article states that you can't use FreeTaxUSA if you live in TX. We used FreeTaxUSA to file our 2010, 2011, 2012, and 2013 federal taxes. We lived in TX for all of those years. Plus we lived in TK, and OK in 2014 and again used FreeTaxUSA to file. Just wanted to let you know.

Posted by:

05 Feb 2015

I have used TAXACT for a number of years and have been very happy with it. Been free for federal and a charge for state.

Posted by:

Yehuda Z
05 Feb 2015

My wife is an accountant, and we have been using TaxAct for many years. We've never had a problem, and I don't think there are any limitations as to income.
If you want to import a previous year's data there is a small upgrade fee, but it is truly negligible.
The only issue I have with it is the inability to add attachments that are not in the built-in flow. For example, we live overseas and I would want to add my foreign version of the W-2 form with a certified translation. This could help prevent audits. But alas, there's no way to add this to an e-filing. I don't know if this is an IRS limitation or the software's.

Posted by:

05 Feb 2015

I don't understand why states don't provide an e-file service. They want you to e-file but provide nothing for it. As for H&R Block free file, I did my sister's on their site and they wanted 9.99 for the state. She has to pay, so I wasn't going to pay for e-file in that situation. They wouldn't let you print it off - they removed it from your account. I was very disappointed.

Posted by:

05 Feb 2015

Hi Bob, I just finished doing my 2014 tax return with Turbo Tax for free. Here's the secret. If you are a NYS resident and make no more than $60000, go to the NYS income tax website and click Free EFile.
From there you can choose Turbo Tax to help you prepare your Federal and NYS return at no charge, and EFile them. It's pretty easy if you do not have a complicated return to do. Great for senior citizens.

Posted by:

05 Feb 2015

Oh, wow - that sounds as though life is much simpler in the Great White Canadian North when it comes to tax e-filing.

Last year, I decided to do my own income tax and started looking into e-filing software. Several reviews gave favourable mention to Studio Tax - - "StudioTax covers the overwhelming range of personal income tax scenarios from simple tax returns to more involved returns for self-employed, returns with rental income and everything in between. . . . one fully functional version with 20 returns is available for all at the affordable cost of $0.00/return!"

I admit that I tried the program with some trepidation, but I found it easy to use, and the e-filing worked just fine.

All they ask is that those who find the software useful consider a modest donation to help keep them going - that works for me!

Posted by:

Joseph Palmere
05 Feb 2015

I agree wholeheartedly with your comments. Many sites report file for free but of course its the Federal return only.You will have to pay for the state tax filing. Others, as you mentioned, have other restrictions ie AGI,age and so on. Yes you can get billable forms but you have to print out your Federal first which they won't allow unless you file electronically first. And on it goes. Keep up the great work. Been a subscriber for years. Back in the days of the Tourbus.

Posted by:

05 Feb 2015

I've been a VITA tax volunteer for years. We provide taxpayers a hands on way to filing taxes electronically and it's totally free. It is geared for lower income individuals. Search for VITA locations on the IRS website. For me personally, I use the freetaxusa website. I think it costs me around $6 to file & I live in WA. I would NEVER go to one of those brick and mortar tax stores. They charge per form used. This year there are more forms to file with the ACA (Obamacare) requirement. If you feel like paying more gets you more assurance, then go right ahead. That is what a lot of people do. I've seen many of those tax prepare stores make mistakes too!

Posted by:

06 Feb 2015

Bob, just how secure are these firms databases? Considering the Anthem/Blue Cross hack tax preparations firms would obvioulsy be major targets. With all the personal information on a tax return especially if they have your bank information on them for a refund! I know they have to promise to uphold IRS data standards, but isn't that just concerned with transmitting the return to the IRS and making sure it can be found for three years, not storing it after the fact on some cloud device waiting for a hacker to come by and discover the root password?

Posted by:

06 Feb 2015

Sherri asks: "Why states don't provide an e-file service?" The US Government is restricted from doing those things that can or are being done by private industry. Or, in other words, the government should not be competing with companies that can do the work. The argument that private industry is more 'efficient' will be made.
For states it's more complicated. My state, Delaware, offers free on-line filing; other states vary. Your state may have faced or been threatened by lawsuits if they do those things (fill out tax forms) that a private company can do. My guess it comes down to whether the service provides help and advice (like the programs listed here do) or simply allow you to enter numbers in a form (like my state does) with the same instructions that the state-issued printed forms have.
Nigel: Yes, all of these companies require your Social Security Number because they file your federal taxes as your proxy. The US federal government does not allow direct e-filing of taxes without use of such a proxy. If you want to do so (file without a proxy) then it’s paper forms for you!

Posted by:

06 Feb 2015

Very nice article, Bob.
I shared this on my FaceBook page for everybody to benefit from.
Thank you once again for a very well written article.

Posted by:

07 Feb 2015

Hi, Bob, for your Canadian fans - this is the Revenue Canada website about how to e-file:
A link on this page takes you to another page listing all the free and free-with-restrictions e-filing software that is Revenue Canada approved.

Posted by:

08 Feb 2015


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