10 Cheap or Free Ways to File Your Taxes
Preparing and filing taxes can be expensive, but free or cheap options are available to most Americans. Low- to middle-income earners may even qualify for free in-person assistance from volunteers trained by the Internal Revenue Service. Here are 10 tax preparation and filing services for frugal taxpayers.
The result of a partnership between the IRS and private tax software companies, the Free File program provides access to free online software for tax filers with adjusted gross income of $62,000 or less. Users can choose from more than a dozen options, including software from big names such as HR Block and TurboTax, although some have age or residency restrictions or lower income requirements. All the Free File software includes free preparation and e-filing of federal returns, but state preparation and filing may come at an extra charge.
The VITA program offers free in-person assistance from IRS-trained volunteers for taxpayers who made $54,000 or less in 2015, as well as those with disabilities or limited English skills. Enter your ZIP code in the locator tool to find the nearest tax preparation site (often a library or university).
The TCE program is similar to the VITA program but designed specifically for older taxpayers. Americans 60 or older can get assistance from TCE volunteers, who are often retirees. The volunteers receive special training on issues particular to older taxpayers, such as dealing with pension- or retirement-related tax forms.
AARP's tax preparation service is similar to the TCE program, and in some cases the two team up to help elderly taxpayers. Compare the Tax-Aide locations with TCE locations to find the one that's most convenient. There is no fee, and AARP membership is not required to use Tax-Aide services.
Taxpayers can check with state and local organizations to see if additional assistance options are available. For example, the New York City Food Bank offers free assistance to taxpayers with dependents who made $45,000 or less in 2015 and those without dependents who made no more than $30,000. Self-employed taxi drivers and child-care providers are also eligible. There are preparation sites in each of the five boroughs.
In addition to its Free File software, TurboTax offers free software to taxpayers with simple tax returns and income less than $100,000. To be eligible, taxpayers must use the 1040EZ or 1040A form. The software also cannot account for contract or self-employment income, ownership of a home or rental property, investment income, or major medical expenses. TurboTax estimates that 60 million taxpayers qualify to use the Absolute Zero edition, which offers free federal and state filing (at least through March 18).
The United Way and HR Block offer free tax preparation and filing for taxpayers with adjusted gross income of $62,000 or less. There are no age or residency requirements, and self-employed and contract workers can use the MyFreeTaxes software. It also works for homeowners, landlords, and investors.
Active-duty military members can find free or discounted online tax preparation services from HR Block and TaxSlayer, as well as special VITA sites on military bases with volunteers trained to deal with military-related tax issues. Military OneSource offers select current and former service members free federal tax preparation and filing, as well as free filing in up to three states.
For taxpayers who do not meet the criteria for the free options, TaxAct may be a frugal choice worth considering. The software is used by millions each year and earns positive reviews. The Plus edition for homeowners, investors, and those with itemized deductions is currently $20, with an additional $20 for a state return. Self-employed and contract workers must use the pricier Premium edition, which now costs $30 and charges $20 for a state return (prices increase as the deadline approaches). The free edition includes free state filing but works only for simple returns.
HR Block software, including the free online edition, includes free in-person audit support. HR Block users can also elect to receive part or all of a refund in the form of a gift card for stores including Target, Amazon, and Home Depot and get a 5 percent or 10 percent bonus.