Don't Mess With Taxes

Now that we know the Internal Revenue Service will start processing our 2023 tax returns on Jan. 29, taxpayers are thinking about how they'll deal with this annual filing task.

Many taxpayers are concerned about tax law complexity. Some are looking for the most tax breaks that will get them a big refund. Others worry about the cost of filing. And all of us just want the process completed as painlessly as possible.

Regardless of your tax concerns, you have lots of filing options. Here's a quick overview.

Go pro: You can hire a tax professional, either an independent tax pro or use a franchise tax prep service. This is a good choice if your tax circumstances are complicated. A reputable tax pro is up to date on the latest tax laws, as well as the tax breaks that might apply to your filing situation.

If you go this route and don't yet have a tax pro, start looking now. Most preparers' calendars are filling up fast. Many have a cut-off date for taking on new clients. Others will automatically file for an extension if you're a late-arriving customer.

File yourself by hand: If you don't want to or can't pay for professional tax help, you can complete your return yourself by hand. Filling out your paper Form 1040 by hand is free, except for, in most cases, the cost of frustration. You have to know which forms you'll need, and download them, as well as the instructions. Then sharpen your pencils, get out your calculator, and get to work.

The Internal Revenue Service offers a slightly easier do-it-yourself tax option. Its Free Fillable Forms is an offshoot of the Free File program. But unlike Free File which has an income cap limiting users, Free Fillable Forms is open to any taxpayer at any income level.

With the fillable forms version, the IRS makes available no-cost versions of the most popular tax forms that you complete on your computer. The you electronically file them, also for free. Note, however, that Free Fillable Forms doesn't have a tax software component to help you complete the documents, so you need to be comfortable doing your taxes.

And if you also must submit a state tax return, you'll have to find a way to do that yourself. Free Fillable Forms doesn't support any state tax filing.

Use tax software: Tax software is the most common filing method. Of the more than 162 million tax returns the IRS received last year, more than 150 million arrived electronically.

Around 85 million of those e-filings were sent to the IRS by tax professionals. The remain 65 million or so were self-prepared and e-filed by taxpayers.

The boxed tax software packages, all of which use a question-and-answer format to walk filers through the process, are ubiquitous this time of year. You can pick one up at any office supply outlet, and even some grocery stores.

One downside to boxed tax software is that it can be expensive. But there are some money-saving options.

Many of the software manufacturers offer free or reduced-cost online versions. Also check with your bank or investment account managers. These institutions often offer free access to tax prep software to their customers.

File for free at, where else, Free File: This IRS partnership with the tax software industry has been around since 2006. While the no-cost program has taken some deserved public relations hits, and has never been as popular as Uncle Sam or the tax companies had hoped, it's still a viable filing option for many.

At the IRS.gov Free File site, which will open on Friday, Jan. 12, eligible taxpayers can select from participating tax prep companies to complete and then e-file, also at no cost, their returns. Although Free File opening day is literally just days away, there are no details yet, either at the IRS.gov Free File or Free File Alliance web pages, as to which companies will participate this year.

We do know, though, that Free File this year can be used by taxpayers, regardless of filing status, whose 2023 adjusted gross income was $79,000 or less.

Lower-income, older, and military help: If you want some personal guidance filing your taxes, but can't afford a tax pro, there are filing assistance options for certain groups of taxpayers.

Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) is the answer for eligible taxpayers on a tight budget. VITA and TCE sites are nationwide, usually at locations that are convenient for community residents to find and get to. They are staffed by IRS-trained volunteers.

VITA sites focus on providing tax preparation and filing help to people who generally make $60,000 or less; have a disability; and who are limited English speaker.

TCE volunteers specialize in helping filers who are age 60 or older. These trained volunteers are knowledgeable in tax-related pension and retirement issues unique to seniors.

You can locate the VITA site nearest you by using the IRS' VITA Locator Tool. If you prefer, you can call toll-free (800) 906-9887.

Most TCE sites are operated by the AARP Foundation's Tax Aide program, so senior filers also can use the AARP Site Locator Tool, which is updated regularly from the start of tax season through April. Or you can call, again toll-free, (888) 227-7669.

Military service personnel also must deal with specific tax issues. Members of the U.S. armed forces can get free tax filing help at MilTax, a Department of Defense program. MilTax offers free return preparation and electronic filing software for federal income tax returns, and up to three state income tax returns for all military members, and some veterans, with no income limit.

IRS Direct File pilot: Another free tax preparation and e-filing option also has a niche taxpayer audience. The IRS is testing its Direct File program this filing season in 12 states.

Taxpayers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming will be able, but not required to use Direct File, which is being phased in this filing season. The program is expected to be widely available in mid-March in the participating states, which likely to be too late for many of the eligible taxpayers.

But if you're not in a tax filing hurry and live in one of the dozen Direct File states, check out my recent post on the IRS-run free filing pilot.

Don't miss the filing deadline: One of these tax filing options should work for you. Regardless of which you use, make sure you meet the filing deadline.

Tax Day is April 15 this year for most of us. It's April 17 for Maine and Massachusetts taxpayers, thanks to Patriots' Day and the Washington, D.C., Emancipation Day holidays.

You can keep track of all this year's tax deadlines in my key federal 2024 tax dates calendar.

You also might find these items of interest:

• Jan. 29 is official start of 2024 tax filing season
• When will you get your federal tax refund? It depends
• Open a bank account so IRS can direct deposit your tax refund

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