How to File Your Taxes Free Online

Filing taxes free online is easier than ever thanks to free tax software and free online tax forms from the IRS. Restrictions on each free tax filing option creates challenges, but those armed with the right knowledge can navigate through the pitfalls and file their taxes free online.

Most of the free filing methods revolve around IRS online tax prep vendor partners like TurboTax and H&R Block online. These free alternatives only work for those with incomes under $60,000 per year. The methods offer certain other challenges that we’ll outline below. IRS online fillable forms, new in 2015, present another option for filing taxes free online that works for all income levels.

Here’s the IRS video explaining the service for filing taxes free online:

For those who don’t mind spending a little, TaxAct offers deluxe tax prep and filing services for less than $20.

IRS Free File for Filing Taxes Free Online: How it Works

The IRS Free File web page displays a list of 14 private vendors offering free online tax services. Some are big names like H&R Block, TurboTax and TaxACT. Some are smaller, like 1040.NOW.NET and ezTaxReturn.com. All come with certain restrictions. The biggest catch is that filing taxes free online through IRS vendor partners is only available to taxpayers with incomes below $60,000.

taxes free online turbotax logo

TurboTax is one of the most popular online tax preparation services for filing taxes free online. In 2015 they offered completely free tax filing, though usually they charge a fee to file state taxes.

For incomes above $60,000, or for those who’d rather not use a private vendor service, there’s another free option: new IRS online fillable forms. The forms include 1040, 1040EZ, Schedule C and so on. Filling in the forms correctly takes some tax skill on the user’s part. One nice feature is that the forms figure the math all on their own, just like a spreadsheet.

Free File Software

To use the IRS Free File software from vendor partners, visit the IRS Free File Wizard at http://apps.irs.gov/app/freeFile/jsp/wizard.jsp. The wizard asks for age, income, state of residence and whether users are eligible for the Earned Income Credit. It then provides a list of appropriate free file software links to choose from based on the answers given. These links will redirect the user’s browser to an external website like H&R Block online or TurboTax.com. The external vendor’s software will take care of the rest, walking the user through all the steps to complete and file their taxes.

What’s the Catch to Filing Taxes Free Online With Free File Software?

taxes free online catch

Filing taxes free online has catches, like lots of pop-up ads and being forced to pay to file state taxes.

There are actually four catches:

1st Catch: The online tax prep services often have pop-ups, notices, and other interruptions built into their software to try to convince users to upgrade to paid, more feature-rich versions. Some of these interruptions are downright nagging, popping up every time a button is pressed.

The Fix: These “reminders” can be a pain, but ultimately they don’t prevent the completion of free tax filing. (Deep breathing is recommended.)

2nd Catch: Although it’s possible to file free federal taxes through all the listed vendors, most of them charge a fee to file state taxes.

The Fix: One notable exceptions to paid state tax filing in 2015 is OLT.com. It offers free state tax filing to those who meet its requirements. (TurboTax also had a free filing option, but that expired on February 16th.)

3rd Catch: The vendors each have catches of their own. Here’s a list:

  • Many of the vendors only work in certain states.
  • 1040NOW.NET only works for users age 60 or younger.
  • TaxSlayer requires an adjusted gross income of $33,000 or less.
  • TurboTax requires adjusted gross income of $31,000 or less.
  • JacksonHewitt only works for those younger than 49 years.
  • TaxSimple only works for users younger than 50.
  • H&R Block is only free to people 53 or younger and eligible for the Earned Income Tax Credit.
  • OLT.com requires users to have an adjusted gross income greater than $13,000.
taxes free online olt logo

OLT.com is one of the IRS’s online free tax preparation software services. They prepare and file taxes free online.

The Fix: Scan through the full list of requirements at http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck before choosing a vendor. Find a vendor that’ll work with your specific financial situation.

4th Catch: The IRS Free File Wizard says it displays only the vendors matching the information entered by the individual taxpayer. However, a quick test revealed errors. For example, answering “No,” to the question, “Are you eligible for the earned income tax credit?” should kick back a list of vendors serving those not eligible for the credit. However, the list resulting from our test included H&R Block, which only offers free tax filing to those who are eligible.

taxes free online irs free file error

When filing taxes free online, double check the IRS free file assistant’s work. This error could lead users to use H&R Block’s free file when they’re not eligible for the EIC, only to find H&R Block only offers free filing to those who ARE eligible. Screen grab is from the IRS Free File Online Wizard.

The result of this oversight in the IRS wizard could cause a lot of people to get all the way through the tax filing process, only to find they must upgrade to a paid version. That’s a potential waste of hours of time, just when time is a scare resource.

The Fix: use the IRS Free File Wizard, but double-check the resulting list of vendors against the restrictions for all vendors at http://apps.irs.gov/app/freeFile/jsp/index.jsp.

Filing Taxes Free Online with Online Fillable Tax Forms

Taxpayers who make more than $60,000 a year, or those who don’t cherish the idea of using an external vendor, can choose a different method. Starting January 20th, 2015, the IRS offers all its tax forms as online “fillable” forms. The beauty of these forms is that they don’t need to be printed. They also figure all the math themselves, just like an Excel or Google spreadsheet. Once completed, the forms can be filed online for free.

taxes free online hsa instructions

The first page and a half of many pages of instructions for Health Savings Accounts. Those using online fillable forms to file their taxes free online will need to read a lot of instructions.

Catch #1: IRS online fillable forms require some level of skill at tax preparation, or at least the ability to read and follow their complex instructions. Unlike with the online vendors, there’s no easy software interface to ask one simple question at a time and guide users smoothly through the process.

The Fix: Taxpayers who have a solid knowledge of how to prepare their own taxes won’t have too much trouble with these forms. Those who don’t mind reading a lot of relatively involved instructions can use the forms as well. The instructions for each form exist online also.

Catch #2: The online fillable forms are managed by a private business called Free File Alliance LLC, not by the IRS. Those who worry about security may hesitate to give their tax information to an independent business.

The Fix: Giving out a social security number to anyone, including the IRS, comes with some level of risk. However, the IRS vouches for Free File Alliance LLC.

Catch #3: Unless the user’s financial situation is very simple, this method takes a lot more time than using one of the IRS’s online vendor partners.

The Fix: Remind yourself, “Hey, it’s free.”

A Decent Alternative to Free Tax Filing

taxes free online taxact

TaxACT online will fill and file taxes for even the most complex financial situation for $17.99, for both federal and state taxes.

TaxACT by Blucora offers every form and schedule the IRS produces, complete with smooth and easy guidance through the forms, for $17.99. The deal includes online filing of both federal and state taxes. That’s not a bad price to avoid the time and hassle that might come with filing taxes online for free.

For More Information on Filing Taxes Free Online: Check out the IRS Guide to Free Tax Services at: http://www.irs.gov/pub/irs-pdf/p910.pdf