When tax season rolls around, most people’s first instinct is to pay for an accountant or online tax filing software. But did you know that many people can do their taxes for free? Here’s a closer look at free and low-cost methods to do your taxes online.
Top free or cheap tax filing services
The tax prep industry offers many expensive methods to do your taxes, but savvy filers and low-income taxpayers can often find a way to file for free. If you don’t qualify for free filing through one program, you may still have free options elsewhere. However, if you find you still need to pay to use tax-prep software, be sure to read our related article to find the best tax-prep service for you.
While some tax filers are happy to pay more for the convenience of high-end tax apps, those looking for the most frugal methods may have to shop around. As long as you’re comfortable with computers, entering information in online forms, and following the prompts to enter information from your tax forms, any of these methods should work well for your filing needs.
IRS Direct File
If you live in one of 12 states —Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington or Wyoming — you may be able to file your taxes for free directly with the IRS using a new test program. The rollout is being staggered, so you may have to keep checking to see if you can use it to file your taxes.
There is no income limit, but the program is limited to simple tax returns. If you have multiple sources of income or take some types of tax credits or deductions, you won’t qualify.
IRS Free File
Under IRS Free File, eight tax software programs offer free use of their tax filing software. However, it’s important to note that Free File comes with strict limits. Each provider uses its own criteria that you must meet to file for free. The highest income supported by any program is $79,000.
For these programs, “free” doesn’t necessarily mean your entire tax return. While you’ll be able to do your federal tax return without charge, anyone needing to file state taxes, which is most people, may have to pay a hefty per-state fee.
Most tax software providers offer free filing through their own websites, sometimes with a lower bar to qualify for free filing. It’s wise to compare the Free File version from the IRS to the free version provided directly by the tax software company before starting to ensure you’re getting the best software version for your needs.
If your household income is less than $79,000, you can file using My Free Taxes.
MyFreeTaxes is a project sponsored by the United Way in partnership with the IRS Volunteer Income Tax Assistance (VITA) program. Behind the scenes, you’ll use a tax software interface from a popular vendor, such as TaxSlayer. If you qualify, it’s worth exploring.
Cash App Taxes
Cash App Taxes is a free tax filing service from Square. Cash App Taxes is completely free for all users, though you have to have the Cash App installed on your smartphone to get started and use Cash App Taxes.
This program includes both federal and state taxes filings. However, it’s important to note that some people won’t be able to use Cash App Taxes, notably those who must file state returns in multiple states. If you moved during the year or work and live across state lines, you’ll have to keep shopping for another tax software.
Some users complain that it’s not the easiest tax software around. But the price is right, so if you’re looking to file on the cheap, Cash App is a top contender.
H&R Block offers free income tax filing for a slightly larger group than TurboTax. The free version works for simple tax returns and supports unemployment income and education-related deductions and credits. H&R Block Online may be your best choice if you’re in college or have been unemployed in the last year.
H&R Block is our second favorite tax prep software for ease of use. It doesn’t offer the widest set of imported data, but it’s one of the easiest to use and does a good job overall of helping you enter your tax information accurately.
These are not the only free file programs available. If you’re not eligible or don’t like these companies, you can keep up your search with one of these choices:
- TaxAct: TaxAct is another longtime member of the popular tax preparation software options club. Like many free options, it doesn’t include state taxes.
- TaxSlayer: TaxSlayer has been an up-and-comer in the tax world in recent years, making big strides to become easier to use while maintaining lower pricing than its larger competitors. Again, the free version is limited but worth checking out if you have a fairly simple tax situation.
Don’t delay and miss tax day
Volunteer tax preparers working through nonprofit organizations can help you file your taxes for free if you earn less than $60,000 annually. For many households, this is an incredible opportunity. In addition to having a professional ensure your taxes are done correctly, you may learn about credits or deductions you didn’t know about, giving you a bigger refund or lowering your tax bill when you file.
You’re far from alone if you don’t think doing your taxes is fun. Many would rather visit the dentist (sorry dentists!) or deal with an ex-spouse than encounter the IRS. But if you miss tax day, you could owe taxes, penalties, and interest. And if you think you earn so little you don’t have to file, you should probably file a tax return anyway to find out if you qualify for any valuable tax credits or deductions that could result in a refund.
If you want to do your taxes for free, this list includes the best options around today. Among this list of tax software and services, most people can find a way to file for free.