Looking for a way to reduce the cost of income tax preparation
this year? Then you came to the right place -- maybe!
The IRS has launched a new program this year -- it's called
"Free File", and it enables you to prepare and e-file your
personal income tax return online for free.
But, alas, there is no free lunch and likewise this "free"
program isn't really free for everyone. You have to meet certain
eligibility requirements to take advantage of Free File, so read
on!
Simply put, Free File is a new government program that enables
certain qualifying individuals to both prepare and e-file their
income tax returns for free -- online.
The IRS has entered into a partnership with 17 private tax
software companies who each offer their services to the public
at no cost.
But here's the catch: not everyone qualifies, and each of the 17
software companies has different eligibility requirements.
Generally speaking, lower income people qualify, as do people of
certain ages and those who live in certain states.
(Gee, sounds confusing, doesn't it? Guess that's why it's a
government program.)
There are 3 main requirements. You only have to meet one of
these criteria to qualify:
1. Income -- if your income is below the following amounts, you
qualify. Take note: there are several different qualifying
amounts, depending on the software vendor.
TurboTax -- $27,000 FreeTaxReturns.com -- $28,000 H&R Block --
$28,000 TaxBrain -- $12,000 CompleteTax -- $33,000
Efile-Tax-Returns.com -- $28,000 FreeTaxUSA.com -- $30,000
TAXSLAYER.COM -- $30,000 TAX$IMPLE -- $28,000
Free1040TaxReturns.com -- $25,000 ezTaxReturn.com -- $40,000
TaxEngine -- $9,200
Only one vendor allows you to qualify if your income is above a
certain amount. TaxACT.com is free if your income is greater
than $50,000.
2. Age -- if you are above or below a certain age, you qualify.
TaxBrain -- age 50 or older OnLineTaxes -- age 20 or younger
3. State of residence -- if you happen to live in one of the
following states, you qualify.
FileYourTaxes.com -- Arizona, Georgia, Michigan or Wisconsin
eSmartTax.com -- Illinois, N. Carolina, Ohio or Georgia
And there's one more: TAXSLAYER.COM lets all Active Duty
Military personnel file for free.
Here's a few points to keep in mind.
First, you still have to prepare the return yourself, and you
have to do it online at the website of each software company.
So, the point here is obvious: Free File is a viable option for
do-it-yourself-ers only.
If you're not inclined to prepare your return yourself, Free
File is not for you.
Second, you must use the vendors web-based tax preparation
software and you also must e-file right from the vendor's
website. Maybe you've been using one particular software for
awhile -- your software company may not even be in this program,
so you'll have to learn a new program, which may not be worth
the extra time.
Third, and most importantly -- all this hype about Free File is
really a mute point if you don't qualify. And most middle-class
and upper-class folk don't qualify.
If you make more than $50,000 and happen to like TaxACT.com,
you're in business. Or if you happen to live in one of 7 states,
you're also in luck.
Otherwise, this program is probably more for your children than
for you.
To get all the details, go to the IRS website at
http://www.irs.gov and click on "Free Online Filing -- Are You
Eligible". You'll find complete information on the program,
including links to all 17 vendors, and a Frequently Asked
Questions page. Enjoy!
About the author:
Wayne M. Davies is author of the new eBook, "The Tax Reduction
Toolkit: 29 Little-Known Legal Loopholes That Will Reduce Your
Taxes By Thousands (For Small Business Owners and Self-Employed
People Only!) Don't file another tax return until you visit:
http://www.YouSaveOnTaxes.com/toolkit.html
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