Are you aware that you might be eligible for free tax prep and filing services? It's a surprising fact that many US households, despite their financial situation, pay for tax preparation and filing. Yet, there are IRS-approved programs that could help you save money and navigate the complex tax code. But why aren't more people taking advantage of these free resources? The complexity of the tax code is a significant barrier, according to Margot Crandall-Hollick, a principal research associate at the Urban-Brookings Tax Policy Center. The Tax Policy Center's research using IRS data reveals that in fiscal year 2024, approximately 85.4 million returns were prepared by paid tax practitioners, while another 61.7 million were prepared by filers using commercial software, with an estimated 26 million of those done for free. The US Treasury's report highlights the challenges filers face when exploring free options. These services vary in delivery methods, eligibility criteria, and state return preparation availability. The Direct File program, which aimed to provide free guided tax preparation and filing directly through the IRS, was suspended due to its high cost to the federal government. However, several free IRS-approved options remain available this tax-filing season. These options include the Free File program, which is a public-private partnership between the IRS and private tax-prep software industry partners. It's available to filers with an adjusted gross income of $89,000 or less and who use the most commonly filed federal forms. The IRS provides an interactive questionnaire to help filers determine their eligibility and identify the appropriate partner for their needs. The Free File Fillable Forms (FFFF) program allows taxpayers to fill out federal tax return forms on the IRS site, with no income, age, or residency restrictions. However, it's important to note that these forms don't come with additional guidance, and filers should be comfortable with the tax return process. According to the Treasury, only 400,000 returns out of 161 million were prepared using Free File Fillable Forms in tax year 2024. The Voluntary Income Tax Assistance (VITA) program primarily assists tax filers with incomes below $69,000, those who are disabled, and those who are not proficient in English. The Tax Counseling for the Elderly (TCE) program, often paired with VITA, caters to seniors and has no formal IRS income limitations. These programs are offered through nearly 3,100 partner organizations across the country. Additionally, members of the military, qualifying veterans, and their family members can access free tax prep and filing services for both federal and state returns through MilTax, provided by the Department of Defense, with no income restrictions. MilTax software is tailored to address the unique tax circumstances of military life, such as combat pay and multiple moves within the same tax year.
