Hi Friendos,
We’re about two weeks away from the beginning of tax season, which starts on January 27th. Let’s me try that again. It’s almost tax season! It’s almost tax season! That’s a little more fun.
I’m going to touch on 5 ways I know of to prepare your tax return at no out-of-pocket cost: Direct File, Free File, VITA and TCE, and MilTax.
This year, the IRS’s Direct File program is expanded from 12 states to 25 states and more people than ever will qualify for it (about 30 million people). With Direct File, you self-prepare for free using an IRS website. We all have to pay taxes and I firmly believe it should be something an ordinary person can do in a reasonable (small) amount of time and at minimal expense. A tax system…for the people.
Last year, the people who used Direct File really liked it, as I wrote about last June, and I am so happy the program is growing. This year, residents of 25 states may qualify (the ones with an asterisk are newly-added this year):
- Alaska*
- Arizona
- California
- Connecticut*
- Florida
- Idaho*
- Illinois*
- Kansas*
- Maine*
- Maryland*
- Massachusetts
- Nevada
- New Hampshire
- New Jersey*
- New Mexico*
- New York
- North Carolina*
- Oregon*
- Pennsylvania*
- South Dakota
- Tennessee
- Texas
- Washington
- Wisconsin*
- Wyoming
Check your eligibility for Direct File here!
If you are not eligible for Direct File, perhaps see if you qualify for the Free File program where you self-prepare for free using a commercial vendor’s website. Eligibility criteria vary across the 8 participating vendors, but in all cases your adjusted gross income must be less than $84,000. I much prefer the simplicity of the government-provided Direct File over the administrative burden and complexity of the Free File public-private partnership.
If you don’t qualify for those programs, or simply don’t feel comfortable with DIY tax prep, two other free options are VITA and MilTax. In the VITA program (Volunteer Income Tax Assistance), volunteers prepare tax returns for free. People with income of $67,000 or less generally qualify. There is also a similar program called TCE (Tax Counseling for the Elderly) where volunteers prepare tax returns for free for taxpayers age 60 and older. Volunteers have to pass certification tests to participate in these IRS-supervised programs. I have prepared hundreds of returns as a VITA volunteer and I think it’s a terrific program.
The Defense Department administers MilTax, which provides free e-filing software and one-on-one tax prep help for military service members, eligible family members, survivors, and recent veterans.
If none of the above work for you, and you will purchase commercial software to file your taxes, do price shop and consider desktop software as an alternative to something entirely web-based. For example, right now Intuit will sell you web-based TurboTax Deluxe for $79 (federal + state) or the desktop product for $70 vs $56 for the desktop product on Amazon. So far this year, the price on Amazon for desktop TurboTax Deluxe has ranged from $46 to $80.
You may also be able to get free or discounted software through other firms you do business with. For example, if you have an account at Fidelity, check out Harry Sit’s article and see if you were randomly given a free copy of TurboTax by Fidelity. Many financial firms offer TurboTax to their customers at a discounted price.
However you’ll get your taxes done this year, I hope the process goes smoothly for you.
-Stephanie
Frequently Taxed Questions 