How is this approach different from free filing offered by other firms?
Free File is made possible by a multi-year agreement between the IRS and the Free File Alliance – Free File, Inc., a 501(c)(3) nonprofit – to provide free service(s) to more taxpayers. Previously, free offerings were not consistently available and were subject to modification or discontinuation from year to year.
Taxpayers have easier access to the Free File web page (hosted on irs.gov), which provides a listing of all free offerings in a single location.
Free File Alliance companies offer both free preparation and e-filing services. There is no cost to qualifying taxpayers. Previously, some companies charged for preparation (filling of forms and tax calculations) while offering the transmission free, or provided the preparation free while charging for transmission, or some variation thereof. Under the Agreement, both are free to eligible taxpayers.
What are the objectives of the Free File agreement?
- Increase growth of e-filing in pursuit of the IRS’ Restructuring and Reform Act of 1998 (RRA ’98) goal of having 80% of all returns received electronically by 2007;
- Provide more free online tax filing options to taxpayers;
- Make tax filing and preparation easier and reduce the burden on individual taxpayers; and
- Provide greater access to taxpayers.
What is the Free File Tax Agreement?
On October 30, 2002, a public-private partnership agreement was officially signed between the IRS and the Free File Alliance, a group of tax software companies. The IRS entered into a three-year agreement with a group of private computer-software companies to provide free electronic filing for at least 60 percent of all taxpayers who file an individual tax return.
On October 29, 2005, the IRS and the Free File Alliance reached a four-year agreement to continue the Free File program.
Most recently, on November 5, 2009, the IRS and the Free File Alliance reached a new five-year agreement to continue the Free File program.
For related information about the Free File Alliance, or to review the agreements in their entirety, refer to:
- 2009-2014 Free On-Line Electronic Tax Filing Agreement Amendment
- Free On-Line Electronic Tax Filing Agreement Amendment – 2005
- Free On-Line Electronic Tax Filing Agreement – 2002
Why is the government doing a partnership?
The government believes private industry, given its established expertise and experience in the field of electronic tax preparation, has a proven track record in providing the best technology and services available. Additionally, Treasury has indicated it does not want the IRS to enter into the tax software business. The Government believes a partnership with private industry will: provide taxpayers with higher quality services by using the existing expertise of the private sector; maximize consumer choice; promote competition within the marketplace; and meet objectives in the least costly manner to taxpayers.
Why was the Free File Alliance formed?
In November of 2001, the Office of Management and Budget’s (OMB) Quicksilver Task Force established 24 e-government initiatives that were a part of the President’s Management Agenda. These initiatives were designed to improve Government to Government, Government to Business, and Government to Citizen electronic capabilities.
One initiative, IRS Free File, instructed the IRS to provide free and secure online tax return preparation and filing services to taxpayers. In accordance with this OMB directive, the IRS began working in partnership with the tax software industry to develop a solution. The result was the formation of the Free File Alliance, a group of tax software companies who provide free commercial online tax preparation and electronic filing services.
What is Free File?
Free File is a free federal income tax preparation and electronic filing program for eligible taxpayers, developed through a partnership between the Internal Revenue Service (IRS) and the Free File Alliance, a group of private sector tax software companies. You may access free commercial online tax preparation and electronic filing services through www.irs.gov. Eligible taxpayers may prepare and file their federal income tax returns using commercial online software provided by the Free File Alliance companies – not the IRS. Since Free File’s debut in 2003, more than 36 million returns have been filed through the program, saving taxpayers millions of dollars.
Is Free File easy to use?
Yes, Free File is easy to use. If you are not able to find a company that you think you may qualify for, you may want to use the “Help Me Find a Company” interactive tool. This will help you identify the tax software offering that best serves your needs and individual tax situation.
Is the Free File program really free?
Yes. The Free File program is free for qualifying taxpayers to prepare and electronically file their federal income taxes. Taxpayers must enter through the IRS.gov website to use Free File. By going directly to a company’s website and not through the IRS.gov Free File pages, you may be charged a fee. While fees may apply to state return preparation and e-filing, some companies offer free state return services for free. You are under no obligation to buy any of the company’s other products or services.
Is this Internet filing?
Yes. The free services are provided via the Internet. Taxpayers enter data and calculations are performed online. Completed tax returns will be sent electronically from the company to the IRS through the existing e-file system using secure technologies. An acknowledgment file, notifying the taxpayer the return has been accepted or rejected will be sent via e-mail from the Free File Alliance company.
Does Free File use secure technologies?
Yes, Free File uses secure technologies. The Free File companies’ proprietary software is approved by IRS. All Free File companies obtain third-party privacy and security certificates. Taxpayers enter tax information in a secure session and the Free File companies transmit tax returns using secure technologies. Taxpayers will receive an email from the Free File company stating whether the return has been accepted or rejected by the IRS.
In addition, the Free File tax software companies must comply with all federal rules governing e-filing and regulations covering taxpayer privacy. The companies may not disclose or use tax return information for purposes other than tax return preparation without the knowing, informed and voluntary consent of the taxpayer. These companies are also subject to the Federal Trade Commission (FTC) Privacy and Safeguards Rules.
If taxpayers choose to use the “Guide Me To A Company” tool on IRS.gov to help find a Free File company, information will remain entirely anonymous and will not be retained by the IRS.
How do I use Free File and how do I get started?
To use Free File, you must click from the IRS.gov Web site link to one of the tax software company websites. Once you have reached the “Free File Home – Your link to Free Online Filing” page, you will find helpful information to assist you with filing your federal return online. Click the “Start Now” button to review the list of tax software companies and select one that best suits your needs. Once you select a company link from the list, you will be notified you are leaving the IRS.gov Web site and you will be taken directly to that company’s Web site to begin preparation of your federal income tax return. Remember, you must access the company through the IRS.gov website to use Free File.
May a Free File Alliance company share my data with anyone besides the IRS?
No. As part of the agreement, the Free File Alliance companies must adhere to the strict privacy standards of the IRS. Only with your permission and in accordance with Treasury regulations may the company disclose your tax return information.
May I file my state income tax return for free?
Some participating Free File Alliance companies do offer free state tax return preparation and e-filing services. You may check the company list on IRS.gov to see which companies offer state returns for free. Other companies charge a fee for state tax return preparation and e-filing. You may find information about the fees for state return preparation and e-filing by looking for the state fees on the company’s Free File home page.
May I use Free File if I need to file an extension?
Yes, you may use Free File if you file for an extension. Many of the companies offer extensions for free. You may e-file your extension using Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
May I use Free File without a computer?
No. Free File is an electronic program that uses the internet. If you don’t have access to a computer at home or work consider using a computer at your local library, college, university, library, or senior community center. The IRS continues to work with existing community-based coalitions to expand computer access to taxpayers without home computers. The IRS also supports many volunteers during the filing season through Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE).
What are the benefits of Using Free File?
Using Free File is fast, easy, and safe. Other Free File benefits include:
- Services that are available 24 hours a day, seven days a week;
- Faster refunds by e-filing;
- A paperless process using electronic signatures by using the self-select PIN;
- Software programs that are constantly updated to give you the most up to date information to complete your return accurately;
- Acknowledgement of return receipt;
What happens if I don’t qualify or if my income is more than $57,000?
If your 2012 Adjusted Gross Income (AGI) exceeds $57,000, then you will not be eligible to prepare and e-file your federal taxes online for free. However, Free File’s online fillable forms are the electronic versions of IRS paper forms. Free File Fillable Forms is a basic service, with no preparation software assistance, that is best for people experienced in preparing their own tax returns.
What if I need assistance with general tax law questions?
For assistance in answering your general federal income tax law questions, please refer to the link Help with Tax Questions . Use this link to ask the IRS a general tax law question related to filing tax returns—such as what to file, when to file, where to file, whom you can claim, what you can deduct, changes in tax law, etc. This site was created to answer general tax questions.
What if I want to report a technical issue about Free File to the IRS?
If you have a technical question about the IRS.gov Free File site, need assistance getting around the site or wish to report a Free File issue, please e-mail us at email@example.com . We encourage you to continue working with the Free File Alliance companies to resolve any ongoing issues. If you are not able to resolve your issue with the Free File Alliance company, you may wish to try another Free File Alliance company’s service.
What information will the IRS collect or retain on me from using Free File?
The information you provide through the “Guide Me To A Company” button is only used to determine the free services for which you may qualify. The information is entirely anonymous and will not be retained or used for any determination of tax liability. IRS policy prohibits the use of permanent Internet cookies. In order to assist you or to identify you to make certain you are the correct recipient of information you requested, we may use “temporary” or “session” cookies. These are deleted when your Internet visit ends. No information about you is maintained as a result of a temporary or session cookie.
Age and your spouse’s age (if applicable)
Use your age as of December 31, 2012.
Any armed forces, federal reservist and National Guard personnel whose AGI is $57,000 or less are eligible for Free Filing. Veterans and retirees are not automatically eligible. You or your spouse must have a 2012 Form W2, Wage and Tax Statement from one of the military services.
Where do you live? Some companies offer a free federal return based on the state you live in. Select the state that you will use for federal income tax return purposes.
State Income Tax Return Preparation & e-filing
When using the “Guide Me to Company”, select the state that you will use for state income tax return purposes. If you want to use the same company to prepare your state return as you plan to use for your federal, then select the state that you will use for preparing your state income tax return. The resulting companies that will be displayed for you will include companies that offer software preparation and e-filing for your state tax return.
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming do not have a state income tax return filing requirements for reporting W2 wage income. Two of the states, New Hampshire and Tennessee, however require taxpayers to file returns for individual interest and dividend income.
Eligibility for claiming the Earned Income Tax Credit (EITC)
Will you qualify for the EITC this year? Tired of guessing? Don’t guess. There’s a lot to know about qualifying for EITC, but the most important thing to know is you can get help figuring it all out. The EITC Assistant is a convenient way for you to find out if you are likely to qualify for the EITC tax credit by answering questions online, about yourself, your children, your living situation, and your income.
For additional information about the Earned Income Tax Credit (EITC) search IRS.gov for EITC Questions and Answers.
If I owe money on my return, is there a fee to pay my taxes?
It depends. Some services such as electronic transfer or direct debit from your bank account may be for free. You may also pay by check or money order. You may authorize an electronic funds withdrawal, using a credit card or enroll in the U.S. Treasury’s Electronic Federal Tax Payment System (EFTPS). If you owe taxes, there may be a “convenience fee” if you use a credit card. Check the company’s Web site for payment options and possible fees if you owe money on your tax return.
Where do I go for Customer Service help?
Check the Free File Alliance company’s web site for customer service options such as online assistance, or an e-mail address for technical and/or tax law assistance. Free File Alliance companies are required to display their customer service options. The companies offer free e-mail support to answer your questions. Specific questions about your individual income tax return submission should be directed to the tax software company that is offering you the service.
Who is eligible to use Free File?
Free File is only available to taxpayers who have a 2012 Adjusted Gross Income (AGI) of $57,000 or less. Individual company offers may be limited to specific states and include other criteria. Carefully review the Free File offer criteria before selecting the company. Each participating software company sets its own eligibility requirements.
Why use the self-select PIN?
The self-select PIN is a paperless process using electronic signatures. This method allows you to electronically sign your e-filed return by selecting a five-digit PIN. The five-digit PIN can be any five numbers except all zeros and eliminates the requirement for mailing to the IRS, the Form 8453, U.S. Individual Income Tax Declaration for an IRS e-file Return. When the self-select PIN is chosen, no signature documents are required to be mailed to the IRS making the process truly paperless.
Will all companies offer preparation and e-filing for my state income tax return?
No. While most companies that you select to prepare your federal return will support your state income tax return, some may not. Before you select a company, you may want to use the “Guide Me To A Company” tool on IRS.gov to determine which companies offer state tax preparation and e-filing services for your state. When you are on the company’s Free File home page, you may also access the state link to view related state forms and any applicable fees.
Your Adjusted Gross Income (AGI)
Adjusted gross income is defined as gross income minus adjustments to income. If your income (e.g., change in job) or personal circumstances (e.g., change in marital status) did not change from last year, we suggest you refer to your 2011 federal income tax return to get a quick estimate of your 2012 AGI. On your 2011 federal tax return, please refer to:
Line 4 if you filed a Form 1040EZ
Line 21 if you filed a Form 1040A
Line 37 if you filed a Form 1040
Important Reminder: If your filing status was single on your 2011 tax return and you plan to file a joint return for 2012, then make sure to add your spouse’s 2011 AGI to yours when estimating your 2012 AGI.
AGI is defined as your taxable income from all sources including wages, salaries, tips, taxable interest, ordinary dividends, taxable refunds, credits, or offsets of state and local income taxes, alimony received, business income or loss, capital gains or losses, other gains or losses, taxable IRA distributions, taxable pensions and annuities, rental real estate, royalties, farm income or losses, unemployment compensation, taxable social security benefits, and other income minus specific deductions including educator expenses, the IRA deduction, student loan interest deduction, tuition and fees deduction, Archer MSA deduction, moving expenses, one-half of self-employment tax, self-employed health insurance deduction, self-employed SEP, SIMPLE, and qualified plans, penalty on early withdrawal of savings, and alimony paid by you. Do not deduct your standard or itemized deductions.