If you’ve never taken advantage of the many free tax-filing options out there, you could be missing out. There are several free – or low cost – options available that will not only save you a few bucks, but will help simplify the process as well.
Worth noting for this year: If you have the added complication of health insurance affecting your taxes because of the Affordable Health Care Act (you may be eligible for health care related tax credits), many of the major tax filing services are offering additional online assistance and information as part of their tax services. For instance, H&R Block’s “helpth” section offers assistance in these areas for no extra fee.
That being said, here is a look at some tax filing services that won’t break the bank. Note: Some free services aren’t available to homeowners or other taxpayers with itemized deductions.
The IRS offers Free File, a service that allows people earning $58,000 or less to choose from a variety of online tax software options. The Free File Alliance, as it’s called, is a partnership between the IRS and 15 independent software providers. Some participating Free File companies offer free state tax prep and e-file. Those with higher incomes can file free online using the free fillable forms. Since 2003, more than 40 million people have taken advantage of this program. Users choose from among the participating software offerings, file their returns electronically, and receive their refunds via direct deposit.
Beyond the IRS, those within the same income limit of $58,000 can turn to MyFreeTaxes.com, which is offered by the Walmart Foundation, Goodwill Industries, the National Disability Institute and United Way Worldwide. The free service covers both federal and state taxes.
The major commercial tax companies are also getting in on the free offerings, but you might have to shell out a few bucks for state filing or other advanced services. TurboTax’s Free Edition this year, for example, is offering a unique perk; if you choose to use some of your federal refund to purchase an Amazon.com Gift Card, they will tack on an additional 5%. State filing is $14.95.
The online arm of Liberty Tax Services offers free federal filing with live chat assistance as you file a simple tax return. Prepare state taxes via the site for $14.95. Taxact.com is another provider offering free federal filing with no income restrictions, with a fee of $14.99 for the state return. For $17.99, you can get the “deluxe” edition, filing both federal and state with free phone support.
ESmartTax, the online arm of Liberty Tax Services, offers free federal filing with live chat assistance as you file a simple tax return. Prepare state taxes easily for only $14.95.
All in all, these do-it-yourself online tax filing options will offer big-time savings if you’re used to paying a tax pro to handle all of your paperwork. Better still, the sites make filing a painless, step-by-step process, which is why more and more people are logging in to settle up with the IRS.
If you prefer to handle your taxes the old fashioned way, you may also be eligible for free in-person help with tax preparation.
Have you used an online tax filing service? How much did it cost you? Please let us know in the comments.