Software that prepares taxes free of charge does exist if you search for it. Who hasn’t heard horror stories about how difficult, time-consuming, and even expensive it is to prepare an income tax return. The horror can be real if your financial situation is complicated. However, if you don’t own several homes or businesses, don’t have a portfolio that generates a substantial amount of your income or a lot of capital gains or losses, and aren’t a Wall Street tycoon, your taxes could be as simple as a one- or two-page return.
If that’s the case, you can probably do your state and federal income taxes on your own, online, and absolutely for free. The following companies offer free preparation and e-filing services that should make your tax season, if not painless, relatively easy.
- If your taxes are simple enough, you can find free e-filing software that will allow you to file them for nothing.
- The IRS itself has a free version of e-filing software.
- Other companies that offer it include TurboTax, TaxAct, H&R Block, TaxSlayer, and Jackson Hewitt.
TurboTax is one of the best known of the automated tax-prep services, partly because of the massive amount of marketing dollars poured into it by its maker, Intuit. Still, TurboTax Free Edition doesn’t disappoint. If you made less than $100,000 in 2018; don’t own a home or rental property; have just one employer and no interest, business-related, or other Form 1099 income; and incurred no major medical expenses, you can complete your Form 1040 on TurboTax for exactly zero. Most people will qualify to file their federal and state returns at absolutely no cost.
For the most part, free e-filing software is available if you only file Form 1040 and nothing else.
TaxAct is another well-known tax-prep package that offers a free service for people whose finances are simple enough to require only a Form 1040. You’ll pay no fee to prepare and electronically file your taxes. You can even import data from last year's TaxAct files free. With a redesigned mobile app, you can start, finish, and file your return on any device. Beyond your taxes, if you’re a student or the parent of one, TaxAct can also help you prepare Free Application for Federal Student Aid (FAFSA) assistance forms.
You’ve likely heard of this national accounting chain, which has 10,000 offices nationwide Thanks to its Free Online service, those people who qualify can prepare their taxes at no cost. H&R Block also offers free prep of federal and state returns and help with commonly asked questions. In addition, all H&R Block online products allow people to claim their Earned Income Tax Credit (EITC) without incurring any additional costs.
Although not as well known, TaxSlayer is well liked by people who use it. The company offers a free return service for those filing Form 1040 that includes live phone support as well as free e-mail support. And your state tax return is also free. This platform also helps users switch from another tax service from a prior year.
Of its nearly 6,000 locations, Jackson Hewitt has approximately 3,000 of them inside Walmart stores to make it easier for taxpayers to prepare their returns. You can prepare your simple tax return for free on the Jackson Hewitt website, with both federal and state returns. It allows you to import your W-2 forms, assuming your employer participates in automated download programs. As long as you don’t have complicated deductions or sources of income, you won’t pay anything.
The Internal Revenue Service (IRS) has several free income tax filing programs based on income. If you make $69,000 a year or less, you may qualify for the IRS Free File Online program, which features free online filing from 10 different companies. To determine which program is best for you use the IRS Free File Online Lookup Tool.
If you make more than $69,000, the Free File Fillable Forms program is available. Online fillable tax forms (with instructions) do the math but offer no advice. The program lets you e-file your Federal return but provides no support or ability to file a state return.
If you make $56,000 or less, have a disability, or speak little English, you may qualify for the Volunteer Income Tax Assistance (VITA) program. The IRS also has a Tax Counseling for the Elderly (TCE) program for people aged 60 and older. Both the VITA and TCE programs operate in community and neighborhood centers, such as libraries, schools, and shopping malls. Some sites allow you to prepare your return electronically, while others are staffed by volunteers.
The Bottom Line
Why would companies offer free e-filing services? Because they know that forming a relationship with you, even if they don’t make any money from you this year, is valuable. If your tax situation becomes more complex, you might turn to them for more-costly services down the road. You might even do that this year, should complications arise.
These free services have their limitations, of course. For the most part they’re for taxpayers who only have to do the 1040 paperwork. However, if your return is that simple, there’s no reason you should pay to file this year. Just be sure, whichever firm you choose, to be careful with your sensitive data.