You now have the opportunity to file your taxes free online. The IRS has partnered with several private companies to help eligible taxpayers prepare and file their federal tax returns for free. Generally, taxpayers who are age 51 or younger and who have an adjusted gross income (AGI) of $57,000 or less are eligible to file their taxes online with most of these private companies. The program is known as the “free file” program which includes companies that are part of the Free File Alliance (FFA) will file your tax returns online for no charge.
Filing online (E-Filing) through the free file program is a great alternative to preparing your taxes on paper forms that you must mail to the IRS. You avoid the long lines at the post office, the cost of postage, and the risk of your return being lost in the mail. Your tax returns are filed electronically over a secure internet connection known as the “Secure Transmission Control Protocol”. This is the highest industry standard when it comes to safeguarding personal information. Look for a “padlock” or “key” icon in the bottom of your browser whenever sending personal information online to be sure you are in a secured transmission environment.
There are several strict regulations that will determine if you are fully eligible to file your return through the free file program. Not all returns can be filed through the free file program. Also, each individual private company may have different eligibility requirements. For example, some companies will not e file your federal return in all states, some companies may have different age requirements, while others will have lower gross income requirements. You will need to check each company’s web site to determine what restrictions apply to you and which forms are available.
For simple tax returns, such as the 1040ez, you should be able to prepare and file your return in less than an hour. For more complicated returns, the amount of time you spend will depend on your individual tax situation. The online preparation software will walk you through step by step, saving you time by doing calculations and figuring out which forms to use. It will also ask and answer tax questions over a broad range of topics including tax terminology and IRS regulations. Filing taxes is now easier than ever.
The free file program is for your federal return only. State returns must be filed with the individual states separately – at an additional cost if you choose to use the same private company that helped you prepare your free federal return. However, you can usually file your state returns online on the state’s web site for no charge. If your state does not offer e file online, they will almost always have the state forms available in a pdf format for you to print and fill in so you can just mail them in. Check your state’s web site for more information.
Once you have completed your tax return online, the private company will electronically transmit your return to the IRS. Usually within 24 hours, the IRS will accept or reject your return. You will be notified by email. So it is still important not to wait until the last minute to file your return. Give yourself at least 5 days before the April 15th deadline. That way, if the return is rejected, you will have time to resolve any problems in your return and resend it before the deadline. Even electronic returns must be filed by midnight April 15th!
To summarize, the free file program is a public-private partnership between the IRS and participating online tax preparers who are members of the Free File Alliance. Each private company has its own eligibility requirements. The free file program does not include individual state tax returns, so you must file those separately – at an additional fee. Electronic returns (or extensions) must be filed by the same April 15th deadline as their post marked paper counterparts.