Free File, the no-cost online tax return preparation and e-filing option, is now open for business.
Although there's been no official announcement by the IRS and its Free File Alliance tax software partners, a click on the Free File page at IRS.gov invites eligible taxpayers to, "Click the Start Free File Now button to file your FREE federal return."
UPDATE: The IRS has now made Free File official! You can read the announcement, but I'd appreciate it if you'd keep reading here.
Those who can click the Free File button this year are taxpayers with adjusted gross income (AGI) of $66,000 or less.
12 participating software companies: Currently, a dozen software makers are participating. They are, in alpha-numeric order:
1040.com Free File Edition
eSmart Free File Edition
Free Tax Returns.com
FreeTaxUSA® IRS Free File Edition
H&R Block's Free File
Online Taxes at OLT.com
TurboTax ® All Free
You can check the complete listing for details on what each Free File company offers.
Programs have varying criteria: Some software participants offer free state tax returns in addition to the federal filing. Others charge a fee for completing and filing state returns.
The IRS notes that the following states provide a free state tax return in partnership with private software companies via the Free File Alliance: Arkansas, Arizona, the District of Columbia, Georgia, Iowa, Idaho, Indiana, Kentucky, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, North Carolina, North Dakota, New York, Oregon, Rhode Island, South Carolina, Virginia, Vermont and West Virginia.
Some software providers have lower income requirements. Other include taxpayer age limits. And some will work for taxpayers with foreign address as long as they meet additional criteria.
One thing all the Free File programs do provide, however, is a free federal return to active military personnel with an AGI of $66,000 or less.
Be a careful tax software shopper: The key is, just like shopping online or at retail brick-and-mortar stores, is to carefully examine any free tax filing product before you commit to it.
Rather than trying to determine by the quasi-sales pitches provided by the companies, you might find it more helpful to use the Free File Software Lookup Tool.
Here you answer some filing questions about your income, age, state residence and more and the search option will suggest the Free File software that fits your filing needs.
Preparing to Free File: Regardless of how you choose your Free File provider, you need to do a few things before you start your software search and actual tax return preparation and e-filing.
The IRS says to:
- Gather your personal information. This includes
— A copy of last year's tax return in order to access your Adjusted Gross Income (AGI)
— Valid Social Security numbers for yourself and your spouse, if applicable, and
— Valid Social Security numbers for your dependents, if applicable.
- Get your salary and other earnings tax documents and statement. These include
— W-2s showing your annual wages from all of your employers,
— 1099-INT forms that detail interest paid to you throughout the year,
— 1099-G forms showing any refund, credit or offset of state and local taxes,
— 1099-DIV and 1099-R forms showing dividends and distributions from retirement and other plans paid to you during the year.
- Don't forget other income documents and Receipts. This includes tax statements for such things as
— Social Security benefits,
— Unemployment compensation.
— All receipts pertaining to your small business, if applicable, and
— Income receipts from rental, real estate, royalties, partnerships, S corporations and trusts.
Delayed medical statements OK: Having your medical insurance tax forms handy also will help. The most relevant here are those tax statements related to the Affordable Care Act, still popularly known as Obamacare, including
- Form 1095A, Health Insurance Marketplace Statement,
- Form 8962, Premium Tax Credit and
- Form 8965, Health Coverage Exemption and exemption certificate number (ECN).
Note, however, that the IRS has given some form providers extra time to get 2017 tax year health coverage information documents to taxpayers. Because of these extensions, you may not receive your Forms 1095-B or 1095-C by the time you're ready to file your return. That's OK. The IRS says:
"While information on these forms may assist in preparing a return, the forms are not required to file. Taxpayers can prepare and file their returns using other information about their health coverage. They do not have to wait for Forms 1095-B or 1095-C to file."
Old earnings info required: You'll also need to verify your identity by using your 2016 AGI amount. If you created a 2016 personal identification number, that will work too.
Don't have your AGI or PIN? If you don't have a copy of your 2016 tax return showing this data, you can use the IRS Get Transcript self-help tool to get a transcript that shows your AGI. Note that Get Transcript now uses the tougher Secure Access process, so don't wait until the last minute if you need to use this.
And remember that in order to get confirmation from whatever Free File software you use that that your return was accepted by IRS, you need a valid email address.
Early filing, not early processing or refunds: Note that using Free File won't get the IRS working on your return any sooner than the official opening of the 2018 tax season on Jan. 29. That's the day when the IRS will accept and process all filings.
Your Free Filed return completed before that date simply be queued up for processing. But at least you'll be done with the task.
Remember, too, that if you claim the Additional Child Tax Credit or Earned Income Tax Credit and get a refund, the IRS cannot by law send you your refund before mid-February.
Finally, if you make too much to use Free File software, you can use the program's Free Fillable Forms. There's no software here to fill out your tax forms, but you can do them online and then e-file them for free.
But you won't be able to use Free Fillable Forms until the official start of this year's filing season on Monday, Jan. 29. Still, the wait could be worth it to avoid any filing expense.
Whatever no-cost filing method you choose, Happy Free Filing!
You also might find these items of interest:
- 4 Free File tips
- Filing patience can prevent a big tax mistake
- 4 filing tips to ensure you get your tax refund ASAP