Can You Freefile?
I wrote earlier this week about VITA and TCE—IRS programs to help low and moderate income or older Americans prepare federal income tax returns. But there’s yet another way to save money on tax preparation: Freefile.
The Freefile program is a product of the Freefile Alliance, a coalition of industry-leading tax software companies partnered with the IRS to help millions of Americans prepare and e-file their federal tax returns for free. 70% of Americans are eligible to use Freefile and save the cost of tax preparation software. According to a 2009 IRS survey, 98% of Freefile users would recommend the program to others.
Am I Eligible for Freefile?
If your Adjusted Gross Income (AGI) is less than $57,000, you may Freefile, my friend. Since it’s been a year since you thought about taxes, let’s recollect how we arrive at AGI. Roughly speaking:
→ All of your income (active and passive)
→ a bunch of deductions like IRA and HSA contributions, student loan interest, alimony paid, and others
So your income could be considerably more than $57,000 and you may still qualify for Freefile depending on your deductions. Note that AGI does not reflect the standard deduction or your itemized deductions (if you opt to itemize). If your financial life didn’t change a lot in 2012, check your 2011 AGI to see whether you might qualify for Freefile this year.
To Learn More About Freefile
The IRS’s website says Freefile for 2013 opens January 30. After that date, visit the IRS’s Freefile page to learn more. And here’s a very short IRS video on the topic.
Do You Freefile?
If you’re eligible, would you use Freefile? If not, why?