Free tax preparation and e-filing is available to qualified individuals under different programs sponsored by IRS. The qualified individuals are those with low income, senior taxpayers or members of the military. Those individuals who are familiar with computer and interest can use the free tax software available under the Free File program to prepare and e-file their federal tax returns. Others can avail the services of the volunteer tax preparation programs sponsored by various organizations through out the country. Private organizations like AARP also conduct free tax preparation camps during tax filing season.
Free Online Tax Preparation
Free online tax preparation and e-filing of federal tax return is possible using one of the 20 tax software from the Free File program or using the online Fillable Forms available at IRS website.
The Free file program is available for individuals with income $57,000 or less. The participating software vendors may have one or more of additional criteria like age, state, EITC eligibility, military status etc. to use their product free. All these vendors require accessing their software from their links on the IRS.gov free file website. Some also support state tax returns for free.
The fillable forms are the electronic version of the IRS paper forms and anyone can use them to prepare and file their tax return. This option is best for people who are comfortable preparing their tax returns but want the advantages of fast, secure and free e-filing. Fillable forms do only basic math and do not support state tax returns.
Free Professional Tax Preparation
The IRS also has programs in place that offer free tax preparation to qualified taxpayers. The administration of the free tax preparation programs is by non-profit groups within the community where they provide training to volunteers.
The IRS trained volunteers are able to help with most of the basic issues you would find if you did your own tax preparation. Their assistance covers such items as filing status, standard vs. itemized deductions and certain tax credits that normally apply to moderate and low-income filers. The most common tax credits for filers in this income bracket are usually limited to the following:
- Earned Income Credit
- Child Tax Credit
- Additional Child Tax Credit
- Credit for Elderly or Disabled
Participating Agencies
Three of the principal agencies participating in the free tax preparation program are:
- American Association of Retired Persons (AARP) participates by providing free tax preparation services for the elderly. You must be at least sixty years old to qualify for these services. The AARP is a non-profit group whose members are 50 and older.
The AARP program is Tax Counseling for Elderly (TCE) Persons. The organization offers Tax Aide to individuals at 8,000+ locations across the nation. Visit www.AARP.org for information about their TCE program.
- Volunteer Income Tax Assistance (VITA) Program provides free tax preparation for low- to moderate-income people. Volunteers receive training from the IRS and earn a certificate in tax preparation. They are able to help taxpayers with basic personal tax returns.
- Armed Forces Tax Council (AFTC) is an outreach program available to the members of our active military worldwide: Air Force, Army, Coast Guard, Marine Corps, Navy and possibly active duty National Guard.
Service members who are stateside or active around the world are eligible for free tax preparation from expert military tax preparers. Tax preparation services are available at an office within their base installation.
Personnel within these offices will address issues specific to the military. These issues include:
- Tax benefits for serving in a combat zone
- Tax credit for earned income
- Free electronic filing to get refunds 50% quicker
The free-of-charge tax preparation services in the above list are three of many groups providing similar services. The Senior Center, Center for Aging, American Legion, Business Colleges and others may offer tax preparation services.
Paperwork and Records
Irrespective of the service you use, all of them require the same paperwork and records to assist with tax preparation.
Most important items on this list are the following:
- Positive identification (recent picture and signature)
- Social Security numbers for each person whose name appears on the return
- Correct and complete birthdates for each person whose name appears on the tax return
- Official wage and earnings statements (W-2 and any W-2G, all 1099s)
- Bank interest / dividend statements if reporting $10 or more
- Both of the tax returns from the last filing
- Direct deposit information (routing numbers with corresponding account numbers)
- Information from daycare provider (tax id number, amount you paid for the year and the start and end date of services)
- Note that if you plan to e-file a joint return, both spouses are to be present for signing the approval forms
- A tax package that may have come to you in the mail