Now that we’re into February, tax season is well underway. W-2s and 1099s have been mailed, and many Americans are feverishly getting their paperwork in order so that they can get their tax refund as soon as possible. Millions of Americans pay tax preparers to do their taxes for them, spending in some cases hundreds of dollars for the service. Others pay to buy tax preparation software so that they can do their taxes on their computers. But many Americans may not know that they can prepare and file their taxes for free, in some cases using the same tax preparation software that they otherwise would pay good money for. Are you eligible for these free services?
The IRS website has a whole host of services that it offers taxpayers. In order to qualify for free tax preparation software services, your adjusted gross income (AGI) must be less than $69,000, whether you’re filing singly or married filing jointly. You can find your AGI on line 7 of your 2018 Form 1040.
It’s important to remember that this is AGI, not overall gross income. So if your salary was $85,000, but you paid $8,000 in pre-tax healthcare contributions, contributed $10,000 to a workplace retirement account such as a 401(k) or IRA, and didn’t have any additional income, your AGI would actually be $67,000, thus making you eligible for these free services.
Check out the IRS website and its eligibility calculator to see if you’re eligible for these free software services, in which case you’ll have to choose which preparer to use. According to a recent audit by the Treasury Department’s Treasury Inspector General for Tax Administration (TIGTA), only 2.5 million taxpayers took advantage of the free tax filing software made available by IRS, out of 104 million taxpayers who are eligible to use the service. That’s a huge number of people paying for software or for tax preparation services who don’t really need to do so.
But if you’re not eligible for free tax preparation, you can still take advantage of the free fillable forms available through the IRS website. You’re actually dealing with Intuit, not the IRS, when using those forms, but for some taxpayers the convenience of being able to fill out the forms online and then file for free might outweigh their concerns about dealing with a private company.
If you’re starting your tax preparation journey, don’t cost yourself any more money than you have to. Start looking into free tax preparation services today.
This article was originally posted on Goldco.
