How to File Your Taxes for Free This Year!

It's that time again: Tax Time!

While many people may struggle to complete their filing on time, why don’t you get ahead of the game and start preparing now?

April, the last month to file taxes this year, will be here before you know it.

So get going.

Luckily, if you meet certain criteria, you may just be able to file your federal taxes–and your state taxes–without spending a penny!

Here are four ways you might be able to file your taxes for free this year.

Two of these I've personally used in the past:

File Taxes for Free

1. TurboTax® Federal Free Edition (TurboTax.com)

With TurboTax® Federal Free Edition you can file a 1040EZ and other “simple” returns for free. If you file during their AbsoluteZero promotion, you can also file your state taxes for free! But if you miss that deadline, filing your state tax returns with TurboTax will cost $36.99. Yikes!

I looked up the other “simple” returns and found that they cover the following:

  • Form 1040 Schedule A – Itemized Deductions
  • Form 1040A – Individual Income Tax Return
  • Schedule B – Interest & Dividend Income
  • Schedule EIC – Earned Income Credit

The good thing about this version is that you can e-file for free and there is no income threshold. So if you live in a state with no income tax, have income higher than $64k, and don't have any business income, then this is the service for you.

Get started with TurboTax for free!

2. Free File (IRS.gov)

Free File is a free federal income tax preparation and electronic filing program developed through a partnership between the IRS and the Free File Alliance LLC. The Free File Alliance is a group of tax software companies you can choose from when filing through Free File.

Your adjusted gross income (AGI) must be $64,000 or less to use this service. According to the IRS, 70% of all tax payers are eligible based on AGI.

I believe this is actually how I discovered TaxAct back in the day. At the time they were involved with this program.

Now it looks like several other companies are involved:

  • 1040NOW Corp
  • Drake Enterprises
  • ezTaxReturn.com
  • FileYourTaxes
  • Free Tax Returns
  • H&R Block
  • Intuit
  • Liberty Tax
  • OnLine Taxes
  • TaxAct
  • TaxHawk
  • TaxSlayer

The IRS has a nice tool to help you sort through this list to find a company that's right for you based on your criteria. The IRS site says that some of these companies may even offer state return filing for free as well.

Get started with Free File.

3. TaxAct Free Federal Edition (TaxAct.com)

With TaxAct you can a e-file a 1040, 1040A, and 1040EZ for free. No income or age restrictions apply. Your state return, however, will be $14.95. Hopefully you're like me and live in a state with no income tax. Otherwise, you'll need to pay that fee. But it's not very expensive compared to other sites.

I began using TaxAct back in tax year 2001. That was the first year I did my taxes by myself (my Father is a CPA with a tax practice) and so I wanted to do them as cheaply as possible.

Back then you couldn't e-file for free like you can today, so I would use the online software (from a library computer) and complete the 1040, print it out, and mail it in. I did this for 6 years, up until I got married. I even did my wife's while we were dating using this service.

Get started with TaxAct.

Additional Tips on Filing Federal Taxes for Free

  • The IRS has an extensive list of other available e-filers on the web.
  • If you don't qualify for the 3 above or you're not comfortable using online services, try this method: go in for half with a friend on TurboTax in the box. Each piece of software is good for two computers. This is actually what I did one year. The box of software cost us $20 ($10 a piece). These days, the least expensive software costs $27, but splitting it with a friend so you're each paying $13.50 is still a pretty good deal.

Filing Your State Taxes for Free

Our contributor, Daniel Packer of Sweating The Big Stuff challenged himself to do better than just a free federal tax return. Here’s how he saved $27.95 on filing his state taxes.

I began my journey by choosing TurboTax’s Federal Free Edition online. I could have chosen any company’s free federal filing option (H&R Block, TaxAct, etc.), but TurboTax was the first to pop into my head.

Plug and Chug

I gathered my W-2 form, 1099 forms, and student loan information and started plugging away. After spending 20 minutes answering easy questions and entering the amount on the W-2 and 1099 forms, it found $585 that I was going to be refunded. Sweet! I had adjusted my withholding in October, but even with 10 allowances, I wasn’t able to make up for the massive amount of taxes I had already paid.

I was given the option to file my state return online with TurboTax for $36.99, which sounded fairly reasonable considering that it asked me a million questions and automatically does the fancy calculations for me. I figured that trying to do my taxes by hand would take forever, but I was trying to save the money, so I had to at least try.

Free Resources to Save Money on Taxes

I found the state tax forms online through the state website, but using my paper and ink sounded like it was against the rules, so I started my journey of learning about all the tax resources available to me. The state website let me know that libraries have tax forms and that you can even request a mailing of the forms you need. I headed to the local library and learned another important lesson.

In addition to having all the tax forms, every year the library offers free tax filing help for individuals and families with low incomes. Technically, I qualified because my half year income was below the threshold, but that seemed against the spirit of the rule.

I picked up the state return, and it was only one page. That’s it. I did have one question that I needed an answer for, so I headed over to the TurboTax Live Community, but none of the community answers left me satisfied. Then I found the best service ever. TurboTax is answering one free tax related question per person. I typed in my question and minutes later received a call from Bob, who was extremely helpful and gave me the answer I was looking for.

All the figures I needed for the state tax form could be found on the federal return, which I was able to view online. I spent 10 minutes looking them up and writing them in the boxes. It felt like being back in 1st grade on a scavenger hunt, only easier.

They were going to charge me $37 for THAT? Those “fancy calculations” I thought they were going to do wouldn’t have saved me that much time after all. The most difficult part of the entire process was making sure I entered my name and bank information correctly (refund please!).

So, I stuffed my state return in an envelope, stuck a $0.49 stamp on it, and put it in the mailbox.

Reader Challenge

I encourage those with relatively simple tax situations to give it a shot before going to a professional or spending money on expensive software. I challenge you to heed this advice and file your taxes for free. With all the resources out there, there’s no reason to pay someone else to do what is in reality a small amount of work. You’ll probably find that 10 minutes of your time is worth the $37 in savings!

Do you plan on filing your taxes for free this year?

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Last Edited: March 14, 2018 @ 3:54 pm
About Philip Taylor

Philip Taylor, aka "PT", is a former practicing CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of FinCon, the conference and community dedicated to helping other financial influencers and brands. He created this website back in 2007 to share his thoughts on money, hold himself accountable, and to meet others passionate about moving toward financial independence.

PT uses Personal Capital to keep track of his financial life. This free software allows him to review his net worth regularly, analyze his investments, and make decisions about his financial future.

PT keeps a portion of his emergency fund in Betterment, the automatic investing tool that makes investing super simple. Betterment focuses on what matters most: savings rate, time in the market, investing costs, and taxes. PT recommends this service to anyone looking to get started investing for themselves.

All the content on this blog is original and created or edited by PT.

Comments

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  1. brokeandbeau says:

    My father is a tax attorney, so I’ve been enjoying the perk of free tax prep for years 🙂

  2. Camari Ellis says:

    Great article! I am literally writing an article very similar for my blog. Might have to revisit.. I have been doing Accounting and tax work for over 15 yrs and I think the online solutions are awesome. Especially, for people with just a W’2 and maybe a couple of children..

  3. I do with Taxact and unless you opt for additional features, its free every year.

  4. Mike and Molly's House says:

    We’ve got to get on our taxes!!! AHHHGG!

  5. I would remind people to check out their state government website for information if they have to file a return with them. Minnesota has direct links to several that will let you efile for state for free as well as federal at http://taxes.state.mn.us/e-file/pages/other_supporting_content_free_providers.aspx

  6. JeffreyCrews says:

    I have a CPA do mine. The time it takes is well worth the money I pay him. However, I always love hearing of ways I truly could save money on certain tasks. I guess I am just too lazy. 🙂

  7. Joanna Hertel says:

    thanks for sharing

  8. Kevin Smith says:

    State Farm Bank offers free TurboTax Online Federal and State filing to account holders – just need to put $100 in an account there.https://online2.statefarm.com/dashboard/turbotax.xhtml

  9. Joe Durika says:

    Already did…using TaxAct.com. Should have my refund by the 14th (happy Valentine’s Day to me!)

  10. @Hank – You mean you paid a CPA? I agree, there comes a point where “free” doesn’t cut it. And $150 isn’t bad. That’s a good deal for a CPA.

    I’m a CPA (non-practicing) so I have no excuse. I do them myself.

  11. I was a big fan of TurboTax till I got in too deep with investing, kids, houses, etc, and I figured the $150 I paid him was well worth it for my piece of mind that it was getting done right…

  12. Thanks for the mention 🙂

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