Free tax software for 70% of taxpayers; free personal preparation for those earning less than $50K

Free Federal Tax Software

70% of taxpayers have an adjusted gross income (AGI) of less than $57,000 and are therefore eligible for free federal tax preparation software. Your AGI can be found at the bottom of the first page of your Form 1040, line 37. A list of providers can be found here.

State Filings (not always free)

Filing your state returns using these programs may, or may not, cost you money (it depends on your state).  The cost of a state filing through software is often around $20 – $40, so your ‘free filing’ can still cost you a bit. One thing I encourage people to do if they already have their 1040 filled out, is to use their state’s online filing system to file for free.  There are pages and pages of special deductions to sift through, but these are often only applicable to a few taxpayers. In the D.C. area for instance, Maryland, Virginia and D.C. all have free online filing through their treasury sites:

VA: http://www.tax.virginia.gov
DC: https://www.taxpayerservicecenter.com/individual/Ind_Logon.jsp?type=100
MD: http://individuals.marylandtaxes.com/filinginfo/efile.asp

Getting your Taxes Prepared for Free

The VITA program offers free in-person tax preparation for people earning less than $50K.  Taxes are prepared by volunteers.  Lines can be quite long, so it’s best to get your taxes done before April rolls around.

Some non-profits organize sessions catering to those eligible for the Earned Income Credit (note that income limits are significantly lower than for the VITA program, often $45K for families and $25K for individuals).  These tax preparation sessions will often be coupled with financial literacy efforts. Here’s an example of D.C.’s EITC program.

Students

Students should check to see if their universities offer free tax preparation services (staffed by volunteers). This can be quite helpful for graduate students receiving grant money and scholarships, since the tax code can be a bit complex in this area.

For Those Over Age 60

The IRS sponsors a free tax preparation program called “Tax Counseling for the Elderly” for people over age 60.  To find a provider, use AARP’s website (you do NOT have to be an AARP member).