Filing your tax returns may be one of the most tedious tasks that you have to take on during the year. But there's an IRS perk that can make the process more rewarding: Free tax filing software and services! The IRS has partnered with major tax filing companies to help you save hundreds of dollars and reclaim your sanity during tax time.
Most tax-saving goodies come with limitations, so make sure you meet the requirements before getting started. Heads up: You cannot exceed annual income requirements. Fortunately, the income amounts have increased for individuals filing a 2020 tax return. So, if you weren't eligible last tax season, this may be your lucky year to gain access to free tax filing.
Don't miss out on the Free File software
It doesn't matter if you are a high- or low-income earner -- there are always opportunities to save money during tax time. The IRS sprinkles many benefits throughout the year that can lift your spirits -- including IRS Free File. The program allows you to access tax preparation software and electronic filing at no cost if you earned $72,000 or less in 2020.
To get started, you can go to the IRS website and access one of the partner sites that will let you prepare and file your current year federal income tax online for free. Your information is safe from any unauthorized access, and you'll have free customer service options at your fingertips to answer any questions you may have.
Don't worry about reading thousands of pages of tax code to avoid the most common filing mistakes. Free File tax software will guide you through the process, prompting you to input information from tax forms such as the W-2 and 1099, and do all the necessary calculations for you. You'll also be less susceptible to costly errors and improve your refund potential by being notified of all the credits and deductions you are eligible for. The last thing you want to do is sacrifice your ability to claim popular benefits such as the Earned Income Tax Credit just because you failed to include vital information on your tax return.
Free access to trained tax volunteers
If filing your own tax return gives you anxiety, you can work with a tax professional to help you prepare and file your federal income tax online. Once again, the IRS has a free solution: Work with a trained tax volunteer. The IRS's Volunteer Income Tax Assistance (VITA) program offers free tax assistance to those who earned $57,000 or less in 2020. You're also eligible if you are a person with disabilities or have limited English-speaking capabilities. Due to COVID-19, a number of sites are temporarily closed, so make sure you use the VITA Locator Tool to find an open site near you.
The IRS also offers the Tax Counseling for the Elderly (TCE) program for individuals 60 or over. TCE professionals have passed tax law training and have the skills needed to specialize in frequently asked questions that are unique to seniors. For example, if you have no idea how to handle your pension proceeds or retirement plan distributions and withdrawals -- especially since 2020 came with all types of new rules and considerations under the CARES Act -- you'll be able to work with a knowledgeable TCE professional who can generally break it all down in the simplest terms.
The earlier you start, the better!
The clock always seems to tick faster when taxes are due. You can avoid the last-minute rush by starting early, gathering your paperwork, and determining if you qualify for any of the free filing options that the IRS provides.
Knowing what resources you have at your disposal can make the tax preparation process a celebratory moment that you look forward to every year -- especially if you're expecting a tax refund and meet the income requirements to escape the tax filing costs.