How to Take Advantage of FreeFile For Your Federal Income Taxes

Tax season is in full swing, and millions of Americans are considering their options for filing their tax returns. Commercial software is one of the primary options people look to when their tax situation isn’t complex enough to warrant hiring a private accountant or tax office franchises like H&R Block.

But did you know that you might qualify for free tax filing through the IRS’ FreeFile program?

Because of heavy advertising from tax software providers and tax preparation franchises and chains, very few people are even aware that this is an option. The IRS estimates that 70% of taxpayers qualify to electronically file their taxes for free with FreeFile.

If your adjusted gross income is less than $73,000 for the 2022 tax year, you may be eligible for free tax filing. However, less than 3% of eligible taxpayers actually take advantage of the program.

There are numerous reasons for this, the aforementioned lack of awareness being a major one. After all, tax software providers and tax office chains have robust marketing budgets, while the IRS has funding limits and strict mandates on public service announcements. Their content often doesn’t successfully funnel to the intended audiences who would benefit the most.

But it turns out you can also learn about how FreeFile works right here, for free!

FreeFile Utilizes Commercial Software, But Each Provider Sets Their Own Limits

That 3% utility rate for FreeFile is largely chalked up due to outreach issues and a lack of awareness. However, two major factors get overlooked outside of tax professional and ex-agent circles.

The foremost reason why FreeFile is severely underutilized is that it is not a universal program made available directly through IRS infrastructure, such as the agency’s payment systems and qualifier test web apps. The closest option to this is Free Fillable Forms, which doesn’t have an income limit like the software license does but has a completely disconnected architecture in comparison to commercial software.

Moreover, there is no support for state taxes. This is not recommended for people who lack a background in accountancy and tax law, live in a state with its own income tax, or have tax situations more complex than your sole source of income being one job reported on Form W-2.

If Free Fillable Forms is not a good option for you, you’ll want the ease of using the software. This entails multiple steps in determining whether you qualify for free tax software usage through a small set of approved tax software providers. The IRS only mandates an income ceiling every year; additional limitations apply based on approved providers in the FreeFile Alliance.

There are seven approved providers in the FreeFile Alliance at the time of writing:

  • 1040NOW Corp.
  • FileYourTaxes
  • OnLine Taxes
  • TaxACT
  • TaxHawk
  • TaxSlayer

All of these providers then institute their own eligibility criteria based on where you live, your age, the type of income you have, and other factors, which doesn’t exactly make FreeFile a universal program available to all low and moderate-income taxpayers.

How to Clearly See if You’re Eligible for FreeFile

To make this process as simple as possible, the IRS shares a FreeFile offers page. This page updates every year depending on available providers and the criteria they choose to institute or amend. For the 2022 tax year, there are 11 offers.

Note that some of them do not include state tax filing at all, only offer certain state tax filing for free, or have more stringent requirements for free federal tax filing. Some offer free state filing as well if you qualify.

tax season
Image Courtesy of the Internal Revenue Service

FreeTaxUSA has the most liberal FreeFile offer. It’s limited to taxpayers with adjusted gross income below $41,000. Taxpayers of all ages can use them, and any state is free, provided that you qualify for a free federal return. Other offers, such as TaxAct and, have a long list of states where they limit free filing options (TaxAct can only be viewed by looking at the offer).

When you find an offer that suits your needs, you click on the “View this offer” button to be taken to the designated FreeFile page on the provider’s website. You then need to make an account with the provider and start inputting your tax information when you’re ready.

If it turns out that you don’t qualify for free filing after all, you can revisit the FreeFile offers page linked earlier and see if you’re eligible for a different offer. If you don’t want to import your information all over again or seek out other options, you would have to pay the fees requested by the provider.

They are under mandates from the IRS to list these fees on their FreeFile page, so you know what to expect when you’re finished and end up not qualifying.

This type of fee transparency isn’t necessarily required for their commercial options or providers not part of the FreeFile Alliance.

Confused and Still Need Free Tax Filing Help?

If you find tax filing overwhelming and confusing, and you’re equally overwhelmed by determining your eligibility for FreeFile, you do have one more option: free IRS-approved income tax assistance.

Volunteer Income Tax Assistance (VITA) clinics may be in your area. You can find out with the IRS’ VITA locator tool.

The VITA and Tax Counseling for the Elderly (TCE) programs offer free tax preparation services to elderly, disabled, and low- to moderate- income taxpayers for relatively simple tax returns. While VITA doesn’t have a hard income ceiling as FreeFile does, the IRS describes the limit as “generally $60,000 or less in annual income”.

VITA clinics are also a go-to option in immigrant communities. Interpreters are available to taxpayers whose first language is not English, but who need help filing their tax returns. Tax preparers in TCE clinics specialize in retiree income and counseling those preparing to retire.

VITA tax preparers are IRS-certified or must have completed IRS-approved tax law training, such as Enrolled Agent or tax attorney licensure. Most VITA volunteers are accounting students seeking experience before their first jobs, retired tax professionals, and ex-officers and agents of the IRS and state revenue departments.

You will have the surety that your taxes will be handled with care by experts if you need help but cannot afford a commercial solution and find FreeFile too onerous to navigate.

This article was produced and syndicated by Wealth of Geeks.