Don't Mess With Taxes

Ready to file your taxes? Ready to do so for free?

The Internal Revenue Service is ready, too.

Its Free File tax preparation and electronic filing option is open for business.

As usual, the online no-cost way for millions to complete and electronically file their taxes is available before the IRS actually starts accepting and processing returns. That won't happen until Jan 27.

But you can still get a jump on your annual tax filing obligation.

The Free File program you select will simply hold your return until Jan. 27 and then submit as soon as the IRS officially kicks off the 2020 tax-filing season.

Free File 2020 companies: When Free File began in 2003, online tax activity was still new. Now the IRS partnership with the tax software industry, represented by Free File Inc., is an expected part of millions of taxpayers' filings lives.

This year, 10 companies are participating in Free File. They are:

• 1040Now, Inc.
• ezTaxReturn.com
• FileYourTaxes.com
• Free tax Returns.com
• H&R Block
• Intuit (TurboTax's corporate parent)
• On-Line Taxes, Inc.
• Tax ACT
• TaxHawk, Inc.
• TaxSlayer

A couple of software providers, ezTaxReturn.com and TaxSlayer, note that they offer their Free File services in both English and Spanish.

Free File eligibility requirements: While the IRS and its Free File partners have worked over the years — this is the 17th season for the online filing option — to make it available to as many taxpayers as possible, there still are some eligibility requirements.

Notably, there's the earnings limit.

For the 2020 version, that's been bumped up $3,000. This year, taxpayers whose adjusted gross income was $69,000 or less in 2019 can use Free File.

Options for Armed Forces members: Also this year, as in the past, the IRS says this season's Free File has multiple options for active duty military personnel.

Members of the U.S. Armed Forces and their families who meet the income limitation may choose from any of nine Free File companies without regard to additional eligibility requirements.

The nine special offers for military filers are from:

• 1040Now, Inc.
• FileYourTaxes.com
• Free tax Returns.com
• H&R Block
• On-Line Taxes, Inc.
• Tax ACT
• TaxHawk, Inc.
• TaxSlayer (English and Spanish)
• TurboTax

Shop around for best Free File option: Since Free File's inception 17 years ago, the IRS says more than 57 million free federal tax returns have been filed using the no-cost online option. Those Free File users have saved, according to tax agency estimates based on a $30 per return preparation fee, more than $1.7 billion on tax preparation costs. 

Among the taxpayers the IRS says could benefit from Free File are first-time filers without the resources to pay for tax filing help, as well as retirees and working families.

But regardless of whether you're a Free Filer who's a long-time taxpayer or 1040 newbie or a civilian or member of the military, the basic rule or tax preparation still applies.

Make sure you choose the program that best fits your filing situation.

Careful readers probably noted in the discussion of military filers there was mention of additional eligibility requirements.

While all taxpayers who made $69,000 or less last year will find at least one free tax prep product to use, each Free File partner also can set its own eligibility standards generally based on income, age and state residency.

Close inspection of each Free File provider's options is especially important to taxpayers who live in one of the 43 states and District of Columbia that require tax returns from at least some of their residents.

Some Free File providers do offer state tax return preparation. And some do include the added filing at no cost. But others charge a fee for the additional filings.

So while Free File might not cost you any dollars to do and e-file your taxes, be prepared to spend some time reviewing the options before making your final selection.

Free option for higher earners: Even if you made more than $69,000 last year, you still can use a version of Free File.

Once again, the IRS is offering Free File Fillable Forms. This is the electronic version of IRS paper forms and is open to any taxpayer regardless of income.

Here, the IRS takes the most commonly used tax forms and makes them online accessible. You select your Free Fillable Forms, fill them out at your computer and then, like the full Free File set-up, electronically submit them to the IRS at no cost.

Remember, though, there is no programmed tax software component in Free Fillable Forms.

Users of Free Fillable Forms must not only complete the forms themselves, but also have some knowledge of the tax laws so that they can do so correctly. If you're comfortable doing that and aren't eligible for the full Free File option, then Free Fillable Forms is a good alternative.

Again, these forms will be held in filing limbo by the IRS until the Jan. 27 filing season start date.

Free File steps: Using Free File is pretty self-explanatory at the webpage.

But if you'd like a quick primer before clicking over there, here goes:

1. Go to IRS.gov/freefile to see all Free File options.
2. Browse each of the offers or use a "look up" tool to help you find the right product. 
3. Select a provider and follow the links to their web page to begin a tax return.
4. Complete and e-File a tax return.

You can use Free File from any digital device. This includes your personal computer, tablet or smart phone.

And while Free File is now available, you don't have to rush to use it. The no-cost online tax prep and e-filing products will be available from through October for any filers who decide they need to get an extension.

In fact, says the IRS, taxpayers who cannot meet the April 15 deadline, also can use Free File to file extensions regardless of their income.

Don't file until you're ready: That extension option is a good reminder of a key tax-filing lesson for all taxpayers, regardless of how they file.

Never be in such a hurry to get your taxes over and done that you file before you're ready.

Regardless of whether you use Free File, Free Fillable Forms or take another route to complete your return, don't file or even start your return until you have all the income and deduction records you need. This checklist can help you make sure you're ready to tackle your 1040.

Filing without the proper data to complete your 1040 will mean you could miss a tax break or worse, fill out your return incorrectly.

The IRS likely will catch your mistakes, holding up your return and any refund you might be due. That defeats your main reason for filing early.

You also might find these items of interest:

• 5 tax tips for Free File users
• Where to find your perfect tax preparer
• 9 ways the IRS reform bill will help taxpayers

Advertisements