5 Situations Where It’s Not Worth It To Hire a Tax Professional
Taxes can be complicated, but knowing the rules and taking advantage of all of the breaks you’re eligible for can save you hundreds of dollars or more. This year, many people who usually have a simple tax situation have to deal with tricky tax issues — like the child tax credit — even if they don’t normally file an income tax return.
It’s also a good time to switch to filing your tax return electronically if you usually file a paper return. The IRS is way behind on processing paper returns, and you’ll get your refund much faster if you e-file and have the money deposited directly into your bank account.
For some people who own a business or have more complicated tax situations, it’s worthwhile to pay a professional to identify valuable credits and deductions, avoid mistakes and make tax-smart decisions that can help with your overall financial plans. Not everyone needs to pay money to file their taxes, though. There are several free resources available to help you for free if you meet certain criteria.
Here are five situations where you can get free tax help without having to hire a professional.
Your 2021 Income Was $73,000 or Less
If your adjusted gross income was $73,000 or less in 2021, you may be able to file your taxes for free through IRS Free File. With this program, several online tax preparation companies partner with the IRS to offer free tax-filing services.
“The IRS makes it available for free, and it’s worthwhile for relatively simple tax situations,” said Catherine Collinson, CEO and President of the Transamerica Center for Retirement Studies. The Free File program can also help you find frequently overlooked tax breaks, such as the Retirement Savers’ tax credit, which can be worth up to $1,000 for individuals (or up to $2,000 for married taxpayers filing jointly) who meet the income requirements and contribute to a 401(k), IRA or other retirement-savings accounts.
After you answer simple questions online, the guided preparation does the math and makes it easy to file your return electronically. For more information, see the IRS’s Do Your Taxes for Free page.
You Have an Uncomplicated Tax Return
You may be able to use a free tax-filing program regardless of your income if you have a relatively simple return. TurboTax, for example, offers several versions of its tax-filing programs for free for people with simple tax situations who file Form 1040 only (the free version is not available for people who have to file other tax forms, such as Schedule C for self-employment income).
“Simple situations covered include W-2 income, limited interest and dividend income, standard deduction, earned income tax credit, the child tax credit, and student loan interest,” said Lisa Greene-Lewis, a CPA and tax expert with TurboTax.
You can do your taxes on your own with TurboTax Free Edition, which is free for the full tax-filing season, or you can use TurboTax Live Basic, which is free until March 31 and lets you get help along the way from a tax expert who can also review your return before you file. TurboTax Live Full Service Basic program, which matches you with a tax expert who can fully do your taxes for you, is also free until March 31 for people with simple tax situations. People with more complicated tax situations or self-employed income can use other versions of TurboTax’s programs, which are not free.
H&R Block also offers some of its online tax-filing programs for free for people with simple income-tax returns.
You Live in an Area Offering Free, Personalized Tax Help
If you want tax help from a person rather than a software program, find out if there are any IRS Volunteer Income Tax Assistance (VITA) programs available in your area. Type your zip code into the IRS’s Get Free Tax Prep Help tool for nearby locations. These services are generally available to people whose income falls below certain cut-offs (often $58,000 or $72,000, depending on the program) or have disabilities or are limited English-speaking taxpayers.
The volunteers who provide tax help through VITA must complete tax-law training and be certified by the IRS. Many of these services are available through local non-profit organizations that receive grants from the IRS.
The New York City Department of Consumer and Worker Protection, for example, administers the NYC Free Tax Prep program, which is available for people who earned $72,000 or less in 2021. They offer in-person tax prep with VITA volunteer preparers or drop-off services at many community centers, food banks, and libraries. They also offer virtual tax prep with help from a VITA volunteer during a 60-to-90 minute virtual call, and assisted self-preparation for filers to complete their tax return online with phone or e-mail help available from a volunteer preparer.
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You’re 60 or Older
The IRS’s Tax Counseling for the Elderly (TCE) program also offers free tax help, primarily to taxpayers who are 60 or older. The IRS-certified volunteers specialize in questions about pensions and retirement-related issues. Similar to the VITA program, these services are often available through local non-profits at community centers, libraries, senior centers, and other locations.
Many of these sites are operated by the AARP Foundation’s Tax-Aide program, which provides free in-person and virtual tax assistance primarily to taxpayers who are 50 or older and have low to moderate income. To find out if there is a TCE program in your area, type your zip code into the IRS’s Get Free Tax Prep Help tool.
You Want To File Electronically On Your Own
If you don’t qualify for any of the free help programs and you want to file your taxes on your own, you can use the IRS’s Free File Fillable Forms. It doesn’t have the guided walkthrough that the Free File programs provide, but it does make it easy to file your return online.
See the IRS’s Free File Fillable Forms for more information.
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