Free File Federal Income Taxes

Several years ago, the federal government extended its e-file service to include Free File Fillable Forms.  This program allows taxpayers with access to a computer and the Internet to prepare and file their federal income tax returns.  As was the case with earlier programs, electronic filing is both a fast and accurate way to securely file a return.

In this article, we're going to talk about the IRS Free File program.  As part of that discussion, we're going to explain how qualifying taxpayers can file their federal income tax return free of charge.  We'll also discuss the Free File Fillable Forms, which allow all taxpayers to file their returns electronically.

Free File Partners

Generally, the Free File program offered by the IRS provides taxpayers with two options:

  • Free File Alliance:  this group of 15 software partners allows taxpayers to e-file their tax forms free of charge, if they meet certain eligibility requirements.
  • Free File Fillable Forms:  this option opens up the eligibility of the free e-file system to all taxpayers.

Since the Free File / e-file system was created in 2003, millions of taxpayers have leveraged this program to file their income tax returns.  Over time, the program has continued to expand its services to taxpayers, including new features.  Software partners also offer their programs in Spanish to eligible taxpayers.

Free File Eligibility

The Free File system supports the filing of federal income tax returns.  Participating companies provide free tax preparation services for returns where the adjusted gross income of the return is $62,000 or less in 2016.  In most instances, the alliance companies will also provide state income tax preparation services.  State filings are usually accompanied by a nominal fee, typically $9.95 or higher to file a return electronically.

Advantages of the Free File System

As with any online system, one of the big advantages of Free File is the flexibility to start a tax return day or night, any day of the week.  The systems are maintained by reputable companies, and filers can rest assured their sensitive information is kept confidential and secure.

The process of completing a return is simple and straightforward.  The program asks the filer a series of questions, and uses the responses to those questions to complete the necessary tax forms.  Since the forms are filled out electronically, the accuracy of all calculations is ensured.

Finally, several partners provide a Spanish version of their programs in addition to English.  Since the IRS is working in collaboration with the participating companies, a confirmation receipt for a completed tax return is provided in less than 48 hours.

Fillable Forms

The Free File Fillable Forms were offered for the first time during the tax year 2008.  Unlike the Free File system mentioned earlier, all taxpayers are eligible to use these forms.  The software programs used for this service allow forms to be stored online as well as printed locally.  Mathematical calculations are performed automatically, thereby eliminating the chance of making this type of error.

Once complete, the forms can be electronically signed and e-filed free of charge.  While this tool allows a taxpayer to complete the necessary tax forms, there is no guidance or assistance offered through this process.  Filers using this system must be familiar with the tax code that applies to their situation, as well as the applicable tax forms necessary to complete their return.

Participating Companies

A complete list of Free File participating companies can be found on the IRS website.  This list includes all of the big names in the tax preparation field such as H&R Block, TurboTax, as well as TaxAct.  A listing of the state income tax returns supported by each company can also be found on the IRS site.

Keep in mind the free e-file offering will be each company's "standard" or "basic" product.  These same companies will attempt to up-sell potential clients to their value-added services such as "deluxe" or "premium" tax return programs.  These products are better suited to taxpayers with more complex returns such as individuals running a small business.

Finally, the tradeoff between a basic (and free) offering and a premium service will be the lost opportunity to find a potential tax deduction.  The premium offering will provide a more detailed (and comprehensive) question and answer session with the taxpayer to see if they qualify for a deduction.


About the Author - Free File Federal Income Taxes (Last Reviewed on November 1, 2016)