- Days left

Free and Low-Cost Options for Filing Taxes

IRS and private companies offer free and low-cost options for filing your taxesJust last week, the IRS announced that Free File is officially open for business for the 2010 tax season. No matter what your filing status or income level, you can use Free File.

The most commonly-touted services under Free File are tax preparation software packages, the product of a public-private partnership between the IRS and the Free File Alliance, LLC. You can read more about the services and the partnership (including a list of the tax preparation software providers) at www.irs.gov/freefile. Under the partnership, at least 70% of taxpayers are eligible to use the software to file federal income tax returns for free.Some state returns may be included with specific packages, so check the individual software package to see what's included.

To qualify, individual taxpayers or families must have adjusted gross income (AGI) of $58,000 or less. Certain other restrictions and exemptions apply. For complete details, click over to the site.If you don't qualify for the free software under Free File, you can still file. Free File's online fillable forms are available to all taxpayers regardless of income. While not as easy to use as the interview-style tax preparation software, the online fillable forms still assist with some basic calculations. The forms also offer links to some of the most commonly sought after IRS publications. When you've completed your returns, you can e-file the forms (again, federal forms only) for free. For more information, click over to the site.

Of course, Free File is just one of many options available to taxpayers for free or low-cost tax preparation. Another popular option is to use online filing services through private companies. TurboTax, CompleteTax, H&R Block, TaxSlayer and Jackson Hewitt are among the companies that offer free online preparation options. In most cases, free online preparation is restricted to simple federal income tax returns, such as a form 1040-EZ. Additional charges may apply for more complicated forms or state income tax returns. Be sure and read the fine print before you get started.

Some private companies also offer free or reduced filing options for taxpayers who are having a tough year. For example, CompleteTax offers a free premium software package for taxpayers who lost their jobs in 2010. To qualify, you must have received unemployment compensation between Jan. 1, 2010, and Dec. 31, 2010, and that compensation must have been reported on a form 1099-G Form for 2010.

For a few dollars more, if you can't wait to get home to file your tax return, you can also do it straight from your phone. TurboTax now offers a mobile phone app called SnapTax, which allows taxpayers to file simple federal (meaning form 1040-EZ only) and state tax returns from smart phones. The actual app, available on iTunes and for Android, is free as a download, but you'll have to pay to e-file a federal and state tax return. The cost through TurboTax is $14.99 through March 26, 2011; after that, the price is expected to go up.

And don't forget that actual tax professionals may offer discounted or free services for filing taxes, too. Check with your local VITA (volunteer income tax assistance) program for more information. To find your local site, call 1-800-906-9887 or find a site online.

Increase your money and finance knowledge from home

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

TurboTax Articles

Top 5 Reasons to Adjust Your W-4 Withholding

Common lifestyle changes, like getting a job or getting married, can change your tax liability. To avoid being caught off guard by an unexpected tax bill or huge tax refund, you'll need to adjust your withholdings on your paycheck.

Does Everyone Need to File an Income Tax Return?

Not everyone is required to file an income tax return each year. Generally, if your total income for the year doesn't exceed the standard deduction plus one exemption and you aren't a dependent to another taxpayer, then you don't need to file a federal tax return. The amount of income that you can earn before you are required to file a tax return also depends on the type of income, your age and your filing status.

How to Write Off Sales Taxes

The Internal Revenue Service (IRS) permits you to write off either your state and local income tax or sales taxes when itemizing your deductions. People who live in a state that does not impose income taxes often benefit most from this deduction. However, you might also be better off deducting sales taxes instead of income taxes if you make large purchases during the year and your total sales tax payments exceed those for state income tax. You can use either the actual sales taxes you paid or the IRS optional sales tax tables.

Add a Comment

*0 / 3000 Character Maximum