By now, you’re probably receiving tax forms from your employer, companies you contract for or from interest bearing savings accounts. As always, this flood of tax forms to your mailbox signals it’s time to decide how and where you’re going to file your taxes.
Many often wonder just how much would it cost to have their taxes professionally prepared. Luckily, there are a number of free income tax preparation options out there, both for federal and state taxes. According to the IRS, approximately 70 percent of taxpayers are eligible to file for free.
Free Income Tax Preparation
If you haven’t done your own taxes before, it can be an intimidating process with all the complicated tax laws to know, like which deductions or tax credits you’re allowed to take. For most people, however, filing taxes is relatively simple, and can be done using a 1040EZ. A good number of people can even file using popular tax preparation software programs, without even having to pay.
Free Federal Tax Filing
The federal government has a program called Free File, which allows eligible taxpayers to file their federal taxes for free using companies the government has partnered with. Here’s how it works:
- Get together your tax information like W-2s, 1099s, etc.
- Determine your adjusted gross income for the tax year.
- Figure out if you qualify for free file–for 2011, you must have an AGI of $57,000 or less, among other criteria.
- If you qualify, go to the IRS’s free file partners page and pick a company to file your federal taxes for free. Different companies may have different AGI requirements to file for free, so choose carefully.
So that takes care of filing your federal taxes for free, but the real question is state taxes: Will you be able to file those for free as well? It’s possible.
Free State Tax Filing
While you can almost always file your federal taxes for free, many companies will charge you a fee to file your state taxes. There is a caveat, however.
If you go to your state’s department of revenue website, you can often find that your state will have free filing options as well. Not sure where to find your state’s taxation website? Check out the list of state revenue websites, click on your state and once on the website do a search for free file. Depending on your state, there may or may not be free filing options listed.
I did a search on my state’s website (Minnesota) and found that there are currently 6 websites partnering with the state to offer free state filing to selected filers. As with free federal filing, the companies have specific eligibility requirements, usually income below a set AGI.
When trying to get free federal and state filing, make sure to follow the link on your state’s website or it may not actually be free, and always verify the costs before submitting.
Filing your taxes can be a pain, but it doesn’t have to be expensive. If you meet certain eligibility requirements for both federal and state taxes, you can file your taxes at no cost using one of the major tax software providers.
Just be sure to follow the instructions on the federal and state tax websites, and you should be filing and receiving a refund in no time!
