| By Michael Lasky |
In this time of tight budgets, paying to pay seems especially galling.
The good news is that many of us can use a free IRS service to calculate our contribution to the Feds — but you still have to do some homework.
A not-so-gentle push to online filing
Undoubtedly, you’ve noticed that the IRS stopped mailing tax forms about two years ago. Now you’re lucky if you can find even the basic 1040 forms at your local post office or library. The IRS, you see, has moved to the cloud — in a big way. All of its zillion or so forms and schedules are now online, mostly in the form of downloadable PDFs.
With PCs and the Internet available to almost all U.S. citizens, the IRS quickly decided that it’s a whole lot cheaper, quicker, and more efficient to handle paperless tax returns — online. And to prod the average taxpayer into digital filing, the IRS, in conjunction with the leading tax preparation services, created Free File (info page) — a service that offers not just free tax filing but also free tax preparation.
Along with such well-known providers as TurboTax and H&R Block At Home, more than a dozen other participating online services have some form of the Free File service. You’ll find the full list of participants on the IRS “Free File: I will choose a Free File company” page. According to the Free File online site, members of the Free File Alliance (info page) have agreed to meet the IRS’s “standards for security and privacy and provide tax prep software options for free.” Some of these tax-prep companies will also handle state tax returns as part of the Free File service.
Free comes with limitations, both big and small
Of course, any time that word free pops up, there are bound to be some gotchas. And just like the tax code, Free File has some doozies. After you’ve read the fine print, those paid services from TurboTax, H&R Block, and others may not seem all that expensive.
Your age, income, and the state you live in all determine whether you can even use Free File. Moreover, each participating company has different eligibility criteria. Using the IRS’s six-question eligibility wizard (see Figure 1) will pinpoint the specific online tax services available to you.