Buzz
Although about 70% of tax filers in the U.S. are eligible for free tax filing via the IRS, they still spend $1 billion annually on avoidable filing fees. Here’s a breakdown of the best ways to file for free.
Begin with IRS Free File
The good news is that most taxpayers qualify for free filing through the IRS’ Free File program—just ensure your adjusted gross income is under $72,000.
This initiative is a collaboration between the IRS and a group of tax preparation firms such as TaxAct and H&R Block, offering free versions of their tax software. With the IRS Free File lookup tool, you can enter details like your income, state of residence, age, military status, and eligibility for the earned income tax credit, which will then match you with offers tailored to your tax-filing needs. After completing your federal and state taxes, you can also e-file them at no charge.
If your income exceeds $72,000, the IRS doesn’t provide many options, aside from Free File Fillable Forms that let you prepare your taxes manually. In that case, using commercial tax software might be a better choice.
Commercial Tax Software
For individuals with a 'simple return,' many tax prep companies like TurboTax or H&R Block offer free filing with no extra charges (although they will try to upsell—you’ve been warned).
A simple return means you’re claiming the standard deduction, receiving only W-2 or unemployment income, and having few or no investments. Some tax software even allows for student loan deductions and includes credits at no extra cost. If your financial situation is more complex, be prepared to pay for additional services.
CNBC Select recommends Credit Karma Tax as the top free tax software for filing a simple return. They also list TurboTax, H&R Block, and TaxSlayer as strong alternatives. However, these programs can be a bit overwhelming, so it’s worth checking out YouTube tutorials to ensure you don’t miss any deductions or credits. For example, this Credit Karma Tax review offers a helpful walkthrough.
Volunteer Income Tax Assistance
The Volunteer Income Tax Assistance (VITA) program is another option that provides IRS-certified volunteers to help you file your taxes for free, as long as your income is $57,000 or less or if you are disabled.
These volunteers typically assist at in-person locations nationwide, though fewer are available this year due to the pandemic. Some may offer virtual consultations or curbside assistance. You can find the nearest location here.
