Longest U.S. federal government shutdown in history be damned! That's apparently the Internal Revenue Service's motto this year.
It announced last week that it will start working on our 2018 tax returns — and issue any related refunds — this filing season, which is set to start on Monday, Jan. 28, even if it's technically still operating in modified shutdown mode.
The IRS underscored that commitment on Friday, Jan. 11, when it announced that taxpayers who qualify to use Free File can now access the online no-cost tax preparation and e-filing option.
Yep. Free File 2019 is now open for business. And the IRS says it's made improvements this year to protect taxpayers who use the option (more on that later in this post).
Since Free File's inception 16 years ago, the IRS says more than 53 million free federal tax returns have been filed using the no-cost online option.
The tax agency estimates, based on a $30 per return preparation fee, that Free File has produced a savings for taxpayers of more than $1.6 billion.
$66,000 earnings limit: The IRS and the Free File Alliance, the coalition of tax software manufacturers that are part of the program, say that most taxpayers (around 70 percent of filers) are eligible each year to use Free File.
The key Free File usage determination is income. The program was created to help lower earners have free access to computerized tax preparation and electronic filing.
This year, any individual or family whose adjusted gross income for 2018 was $66,000 or less can use Free File.
Other eligibility requirements: Filers who meet the earnings limit should be able to find at least one Free File software product they can use, according to the IRS. Often, taxpayers are eligible to choose from multiple free offerings.
While most of the Free File participants have their own sets of eligibility requirements, IRS says that 10 of this year's partners have a special offer for active duty military personnel by making their sole eligibility criteria an income of $66,000 or less.
In other cases, the needs of families with children, first-time filers and seniors who meet the income criteria are considered by the participating software providers.
And all, notes the IRS, have been updated to support all of the new Tax Cuts and Jobs Act (TCJA) changes, as well as long-time benefits such as the Earned Income Tax Credit.
Federal filing options available through Free File are all that residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming need since these states collect any state income tax.
For U.S. filers living elsewhere, some Free File partners also offer free federal and free state return preparation.
Note, too, that some states have their own Free File program. Check your state's tax department for details.
Use IRS.gov to guard against ID theft: OK, you qualify for Free File. Just what do you do now?
First, go to the IRS' official website IRS.gov.
The IRS emphasizes that you can only access Free File from there, where at the home page you type Free File in the search box that's at the upper right of the page. Then hit return, click the first link — Free File: Do Your Federal Taxes for Free — that shows up on the next page and voilà (yes, I'm a fan of that song featured in the tablet TV ad), you're there.
Or, if you want to use a mobile device to do your taxes for free, use the Free File link at the IRS2Go app.
This specific IRS connection direction isn't just a ploy for the agency to boost its website's and app's click counts. It's for your own personal and tax security.
Do not use links from other Web pages, even if you trust them, and definitely do not click on purported free filing URLs emailed to you. They could be identity theft attempts, either maliciously or inadvertently, to steal your tax data and file a fraudulent refund claim.
Find your free filing option: Once you're at the official IRS Free File site, you can check out this year's dozen software providers, either individually (they're listed in the box below) or use the "Software Lookup" tool on the IRS Free File page to help you find a product or products that match your filing needs.
Free File 2109 Tax Filing Season
Participating Tax Software Companies
FreeTaxUSA IRS ® Free File Edition
TurboTax Free File Program
1040.com Free File Edition
H&R Block's Free File
TaxAct® Free File
eSmart Free File Edition
Online Taxes at OLT.com
What if you make too much money to use Free File or can't find a software option you like? No worries.
Free File Fillable Forms is back, too. This program, which has been around for a few years, offers taxpayers at all income levels a chance to use an online Form 1040 they can fill in at their computer and then electronically submit the return at no cost.
Remember, though, there is no programmed tax software component in Free Fillable Forms. To use this free option, you must not only complete the forms yourself, but also have some knowledge of the tax laws so that you can do so correctly.
And these fillable forms won't be available until the start of the full filing season on Jan. 28.
Upgraded consumer protection features: In addition to retaining modified SALT itemized deductions, two other Schedule A claims will remain, but in tweaked forms, one good, the other not so good.
As noted earlier, each Free File partner sets its own eligibility standards, generally based on age, income or state residency.
In the past, some of the choices have been somewhat confusing. That may be one reason why Free File apparently is not as popular as you'd think it would be given Americans' love of almost anything that's free.
Consumer advocates also have complained that some of the free filing options included upgrades that weren't actually free, although it ostensibly is implied that all actions would be no-cost because the supplier was part of Free File.
The IRS says many of those concerns have been addressed in this, the program's 17th tax filing season, as part of a package of strengthened consumer protections agreed to last fall by the tax agency and the Free File Alliance.
Highlights of the fine-tuned Free File partner guidelines include:
- Removing the "value-add" button from Free File partner landing pages. Free File members will remove any button or link on their Free File landing pages that would take taxpayers to non-Free File programs. The change is designed to reduce confusion, emphasize and make clear to taxpayers what is included in the Free File program.
- Taxpayers will be automatically returned to the IRS Free File page if they don’t qualify for an offer. To use Free File, taxpayers must use IRS.gov to connect to a company offering Free File. If the taxpayer doesn't qualify for a free filing option on a particular member site, the new agreement requires the companies to send the taxpayer back directly to the official IRS page to see if they qualify for another Free File offer.
- Returning taxpayers' first option must be Free File. If a taxpayer returns to a Free File member's website the following year after using the free program, the first option after logging into their account must be to use the Free File option before receiving any other offers from the company.
- Follow-up emails to taxpayers who used Free File the previous year will welcome them back to Free File service. This change will strengthen rules for members sending follow up emails to prior year customers, reminding them of the availability of Free File. To help increase program participation, Free File members will email prior year participants about the continuing availability of Free File prior to the start of the filing season. The email cannot contain information about any non-Free File service or product or any marketing or soliciting, except for free or paid state tax preparation offers.
- Emphasis on the in-place review process. Both the IRS and a third party already review each Free File option before filing season to ensure the program standards are being followed by Free File members. The new agreement now reinforces this longstanding requirement, which has always included an unannounced review during filing season.
"These steps will help further protect taxpayers and make a good program even better," Rettig said. "The IRS is committed to improving the Free File program and continuing to make this a great option for taxpayers to consider when they are preparing their taxes."
Free File through extension deadline: If you qualify for Free File, great. You can get to work now.
Remember, however, that the IRS won't start processing any returns, be they completed via Free File, your own purchased tax software or your paid tax preparer until filing season officially starts on Jan. 28.
Still, many folks will be glad to get their taxes done early, especially if they're expecting a refund.
And if you're not that enthusiastic yet about filing your 2018 tax return, remember that Free File will be available to taxpayers from now through the mid-October deadline if you find you need to file for an extension.
You also might find these items of interest:
- Tax Day 2019 is April 15 and April 17
- Your many tax season VITA & TCE volunteer opportunities
- Some IRS online services, including ways to pay estimated taxes, are working despite shutdown