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Preparing and filing tax returns can cause anxiety and confusion. You have choices to help you timely and accurately meet your 2023 filing requirements for free. Free filing and assistance are available through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs, IRS Free File programs, IRS Direct File, MilTax, and many private software companies. Each program, discussed below, has different qualifications and features and taxpayers should be comfortable with their choice.
You may qualify to obtain free tax return preparation services through one of the IRS partners participating in the VITA or TCE programs. VITA sites offer free tax preparation services to individual taxpayers who make $64,000 or less, persons with disabilities, and taxpayers with limited English proficiency. TCE sites offer free federal and state tax preparation assistance to taxpayers who are 60 years of age and older and often specialize in tax issues unique to seniors, such as pension and retirement-related issues. These sites provide services in different ways including in-person, virtual, or drop-off. However, some sites offering in-person service require an appointment. The sites will tell you what you need to bring and how to get ready for your appointment. You can find out more about these volunteer programs, determine your eligibility, and even find a VITA or TCE site here. Many of the VITA and TCE sites are only available through mid-April while others are open during the extension period through mid-October. Please check the specific location for the available dates and times and whether the site has Spanish-speaking volunteers.
The IRS Free File program is a public-private partnership between the IRS and several trusted brand-name tax preparation and filing software industry companies who provide their online tax preparation and filing for free in English and Spanish. Taxpayers can file their 2023 federal and state tax returns using IRS Free File through early November. Free File helps millions of taxpayers each year to file tax returns for free and this year has seen an increase in usage by about 18 percent. IRS Free File can carry over information from your prior returns when using the same software. It supports simple and complex returns, most individual credits including child and energy credits, income or loss from a business you owned and operated as a sole proprietor, income or loss from rental real estate, royalties, partnerships, S corporation, interest, dividends, and income or loss from the sale of stocks or crypto currency. Free File products are mobile friendly so you can do your taxes on your smart phone or tablet. Taxpayers including active-duty military with income below the threshold can use Free File to prepare and e-file their federal tax return for free. Free File products automatically import your federal tax return information into a state return. You can choose to use Free File to file your state tax return at low or no cost. To be eligible for Free File, your adjusted gross income must be $79,000 or less. Learn more about IRS Free File at IRS.gov/freefile. You can also watch YouTube videos on “What to know about IRS Free File guided tax software” and “How to use the Find Your Trusted Partner Tool.”
If you don’t meet the income requirement for Free File, you can still use the IRS’s fillable forms and file electronically. There’s no guidance and only limited calculations, but you can still fill out the free electronic forms using IRS instructions. However, this option doesn’t include any state tax preparation.
Direct File is a new IRS tax tool, available in English and Spanish and has no income limit, you may be able to use to file your federal tax return directly with the IRS using your smartphone, tablet, or computer through April 15, 2024. In the Direct File pilot, taxpayers receive step-by-step guidance and calculations as they add tax information. While using Direct File, taxpayers can connect with IRS customer service representatives through a live chat.
To qualify for Direct File, you must live in one of the twelve qualifying states (AZ, CA, FL, MA, NH, NV, NY, SD, TN, TX, WA and WY), file a simple federal tax return, report only certain types of income, claim only certain credits, and take only certain deductions. After completing their federal returns, taxpayers in the four states with a state income tax – Arizona, California, Massachusetts, and New York – will be guided to a state-sponsored tool to complete their state tax returns. To find out if you qualify, visit the IRS Direct File website.
Watch the Direct File video for a preview of what to expect when using this tool.
Military personnel who want to file free federal tax returns have several options, including the Department of Defense’s MilTax and the IRS Free File program. These programs offer online tax preparation, electronic filing, and direct deposit of refunds at no cost. The Department of Defense provides MilTax as a free tax resource for the military community. MilTax is a suite of tax services available for members of the military, as well as qualifying veterans and family members. There are no income limits.
MilTax is designed exclusively for the military community. The software was developed specifically to address the unique circumstances of military life that can affect taxes such as combat pay and dealing with multiple moves within the same tax year. Eligible taxpayers can use MilTax to complete and electronically file a federal tax return and up to three state returns for free.
Taxpayers, including active-duty military, with an adjusted gross income (AGI) of $79,000 or less in 2023 can find an offer from an IRS Free File provider that matches their needs. Some providers also offer free state tax return preparation. Those with an AGI over the limit can still file their return for free with Free File Fillable Forms.
Tax software companies such as Turbo Tax, H&R Block, Cash App, and others also provide free options. You should read the eligibility requirements for the tax software company you choose and understand the software offerings to ensure a no-cost solution. Many of these companies automatically import your federal tax return information into a state return. You can choose to file your state tax return at low or no cost.
While there are many free options to file your returns, many people have complicated finances that require them to pay to prepare or file their taxes. But for those that do qualify, these free preparation and filing services are underutilized by qualifying taxpayers. Approximately 100 million qualifying taxpayers continue to self-prepare or pay a preparer even though they qualify for free services. Utilizing the free services will allow these taxpayers to save costs on preparers and tax preparation software. You should understand the options for each of the various programs and choose wisely.
For the approximately 48 million qualifying taxpayers who self-prepare, the free services can assist to ensure they receive all the credits and deductions for which they qualify, including the Earned Income Tax Credit (EITC). The IRS estimates that millions of taxpayers who qualify for the EITC do not claim the credit, missing out on a benefit potentially worth thousands of dollars. Utilizing one of the free services will help taxpayers save money in correctly calculating and paying their tax or receiving their refunds.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.