Don't Mess With Taxes

Free File, the Internal Revenue Service’s partnership with the tax software industry that allows millions of taxpayers to prepare their returns and e-file them for free, is still open for this year’s procrastinating filers.

Private-sector companies will help those who filed for an extension (or who are just late filing) complete and submit their 1040s through the Oct. 15 extension deadline.

And that no-cost filing service also will be around at IRS.gov for the next five filing seasons, the tax agency announced today.

Extended through 2029: This year’s Free File program was its 22nd season at IRS.gov.

Under this public-private partnership, eight private-sector tax software companies, listed in the box below, participated this year. They offered — and are offering through Oct. 15 — online versions of their online, guided tax preparation products to taxpayers with an adjusted gross income (AGI) of $79,000 or less in 2023.

Taxpayers who earned more than the $79,000 earnings limit can use the IRS’ Free File Fillable Forms. There is no software component here, but filers can complete available forms online and e-file them for free.

This free tax prep and filing public-private partnership now will continue through 2029.

“Free File has been an important partner with the IRS for more than two decades and helped tens of millions of taxpayers. This extension will continue that relationship into the future,” said Ken Corbin, chief of IRS Taxpayer Services.

“This multi-year agreement will also provide certainty for private-sector partners to help with their future Free File planning,” added Corbin.

Free but often ignored: Free File is available to taxpayers whose adjusted gross income (AGI) is at or less than a certain amount. This year, that earnings cutoff was $79,000.

The IRS and Free File Alliance say that meant that 70 percent of U.S. taxpayers, or roughly 100 million filers, could use the no-cost online tax prep and e-filing option.

Despite being free, far fewer than 100 million take advantage of Free File. But the program made some headway this year.

The IRS said Free File use grew this year by about 200,000 tax returns, bringing the total filed as of May 11 through the program to 2.9 million returns. That’s an increase of 7.3 percent from the 2.7 million filed through the same period last year.

“We were pleased to see growth in the program this year, and we look forward to continuing this important collaboration with the tax software industry,” said IRS Commissioner Danny Werfel in a state amount the continuation of Free File.

The increase also was notable given that the two largest tax software programs, Intuit’s TurboTax and H&R Block, no longer participate in Free File. H&R Block bowed out in 2021. TurboTax exited in 2022.

Even without those major players, Werfel said Free File “remains an important part of the IRS portfolio” designed to help taxpayers file for free.

Other tax prep portfolio increases: The IRS also saw increased activity in free tax returns at Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. The volunteers at these sites, run by community groups and nonprofits, are trained by the IRS and provide face-to-face filing help to their respective tax clientele.

VITA and TCE helped this year with 2.6 million returns, an increase of 200,000 more than a year ago.

And the IRS itself also got more involved with the down-and-dirty of free filing this year with its Direct File option. The limited pilot program was open to select taxpayers in 12 states.

Like Free File, Direct File enabled eligible taxpayers to prepare their taxes online and e-file them for at no cost. However, unlike Free File, Direct File was created and administered solely by the IRS, no tax software middleman needed.

Several hundred thousand taxpayers across 12 states signed up for Direct File accounts, noted the IRS, with 140,803 of them filings their federal tax returns using the new service.

The Treasury Department and IRS have yet to decide whether Direct File will be available, and in what form, in 2025.

You also might find these items of interest:

• FTC slams TurboTax for deceptive free filing offers
• FTC alleges H&R Block deleted customer tax data, used deceptive advertising
• Direct File usage exceeded expectations, but future of IRS-run free tax prep program unclear

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