While it’s not anyone’s favorite activity, filing taxes is an important part of adult life. However, it doesn’t have to be expensive. In this article, we’ll break down all the tools, tips, and tricks you need to file your taxes for free, regardless of your income or tax knowledge.
Top 5 tools to file taxes for free
There are many options available for filing your taxes for free. Here are our top five recommendations:
1. IRS Free File
The IRS offers its Free File program to individuals with an adjusted gross income of $72,000 or less. Each Free File provider sets its own eligibility requirements, but most providers offer free federal and state tax return preparation and e-filing. To get started, visit the IRS website and use the Free File lookup tool to find the best provider for you.
Pros: The Free File program is reliable, user-friendly, and can save you money on tax preparation fees.
Cons: Not all providers offer free state tax return preparation, and some eligibility requirements can be confusing. It’s important to review each provider’s terms and conditions carefully before signing up.
2. TurboTax Free Edition
TurboTax is a popular tax preparation software used by millions of people each year. Their Free Edition allows individuals with an adjusted gross income of $39,000 or less, or those eligible for the Earned Income Tax Credit, to file their federal and state taxes for free. The software is easy to use and provides guidance throughout the filing process.
Pros: TurboTax Free Edition is one of the most user-friendly tax software options available, and includes free state tax preparation for eligible users.
Cons: The income threshold for eligibility is lower than some other free file options, and there may be additional fees for certain features or to upgrade to a paid version of the software.
3. H&R Block Free Online
H&R Block is another popular tax preparation software that offers a free online option for individuals with an adjusted gross income of $72,000 or less. Users can import their previous year’s tax information, drag and drop documents, and receive guidance throughout the process. H&R Block also offers free state tax preparation.
Pros: H&R Block Free Online provides plenty of support options, including access to real tax professionals, as well as easy import and document organization options.
Cons: Like TurboTax, the income threshold for eligibility is lower than some other free file options.
4. TaxAct Free Edition
TaxAct Free Edition is a tax preparation software option available for individuals with an adjusted gross income of $66,000 or less. It provides free federal and state tax return preparation and e-filing. The software includes guidance and support throughout the tax filing process.
Pros: TaxAct Free Edition offers a user-friendly interface and provides guidance as you file your taxes for free. It also includes free state tax return preparation.
Cons: Some users may find the software less intuitive than other options, and certain features may only be available on a paid version.
5. Credit Karma Tax
Credit Karma Tax is a free tax preparation software that offers free federal and state tax return preparation and e-filing. The software is designed for individuals with simple tax situations and includes guidance and support throughout the tax filing process.
Pros: Credit Karma Tax has a clean interface and is straightforward to use. It also offers a credit report and monitoring service.
Cons: The software may not be suitable for those with more complex tax situations, and not all state tax returns are supported.
DIY guide to preparing and filing taxes for free
If you prefer to file your taxes without using software, there are some simple steps you can take to do so for free. Here’s how:
1. Gather your documents
Before you can start preparing your taxes, you need to gather all the necessary documents. These may include W-2s, 1099s, and any receipts or invoices for deductions you plan to claim.
2. Determine if you’re eligible to file your taxes for free
Make sure you meet the requirements for filing for free using the IRS Free File program or other free software options. If you don’t meet the eligibility criteria, you may need to consider either paying for tax preparation software or hiring a professional.
3. Use the IRS Free Fillable Forms or other free software
Instead of hiring a tax professional or paying for tax preparation software, you can use the IRS Free Fillable Forms. These forms are available for free on the IRS website and can be filled out and submitted electronically. However, note that there is no tax guidance provided, so you’ll need to have a good understanding of your tax situation and the tax laws.
4. File your taxes
Once you’ve completed all the necessary forms and documents, you can file your taxes electronically. The IRS offers free e-filing options, which can save you time and money compared to mailing in your forms.
5. Double-check everything
After you’ve submitted your tax forms, make sure to double-check everything for accuracy. This ensures that you don’t get audited or charged penalties for errors.
Tricks to lower taxable income legitimately and file your taxes for free
If you’d like to lower your taxable income – and potentially reduce your tax bill – there are a few legitimate ways to do so:
1. Itemize your deductions
If you’re eligible, itemizing your deductions can be a great way to reduce your taxable income. Deductions may include charitable donations, medical expenses, and mortgage interest.
2. Contribute to a retirement account
Contributing to a traditional IRA or 401(k) can reduce your taxable income. Plus, it provides you with additional retirement savings.
3. Claim available credits
There are many tax credits available that can reduce your tax bill or increase your refund. These include the earned income tax credit, child tax credit, and American Opportunity Tax Credit.
Important facts to know for filing your taxes for free
Here are some important things to keep in mind when filing your taxes for free:
1. Eligibility criteria for filing taxes for free and income threshold
Be sure to review the eligibility criteria for each free tax filing option. Some programs have income thresholds, and others may only offer free federal tax preparation, not free state tax preparation.
2. How to use free tax preparation software
Each tax preparation software has its own instructions and interface, so it’s important to review these before starting your tax return. Also, be sure to double-check and proofread your tax return before filing.
3. Common errors to avoid when filing taxes for free
Some common errors to avoid when filing your taxes for free include entering incorrect personal information, failing to claim eligible deductions or credits, and failing to submit all necessary documents.
How to avoid fees while filing your taxes: A comprehensive guide
Here are some tips for avoiding fees while filing your taxes:
1. E-file your taxes
E-filing your taxes can save you money on postage and mailing fees, and it’s faster than mailing everything in.
2. Claim available deductions and credits
Make sure to claim all eligible deductions and credits to reduce your tax bill. This will help you avoid any late payment fees or penalties.
3. Use free tax preparation software
There are plenty of free tax preparation software options available, so take advantage of these to save money on tax preparation fees.
The benefits and drawbacks of hiring a tax professional vs. preparing and filing taxes for free
Both hiring a tax professional and filing your taxes for free have their benefits and drawbacks. Here’s how to weigh your options:
1. Hiring a tax professional
Benefits: A tax professional can offer guidance and assistance throughout the tax filing process. They can help you identify eligible deductions and credits, and may help you avoid costly mistakes.
Drawbacks: Hiring a tax professional can be expensive, and it may not be necessary if your tax situation is simple enough to file for free using tax software.
2. Preparing and filing taxes for free
Benefits: Filing your taxes for free can save you money on tax preparation fees. It can also be a good option if you have a simple tax situation and don’t need the assistance of a tax professional.
Drawbacks: Filing your taxes for free may be difficult if you don’t have experience with tax preparation. It’s important to be aware of the eligibility criteria and common mistakes to avoid.
Filing your taxes for free is easier than you might think. By using the right tools and taking advantage of eligible deductions and credits, you can save yourself money and ensure that your taxes are filed accurately and on time.