Free Tax Preparation Software Websites and Services

Thanks mostly in part to technology, consumers have many FREE options regarding Tax Preparation. Free Tax Preparation website, Free Tax Preparation Software, and even Free Tax Preparation services in conjunction with the IRS are now available. Listed in this Hub are just a few of the many Free Tax Preparation options available. Some are for particular States or Cities, other Free Tax Services are available nationwide. Many free or discounted tax return preparation services are for low to middle income individuals and families, but many are for anyone in any Tax bracket.

If you would like to get your taxes done at no cost and don't mind doing them your self on-line than the IRS has the answer for you.

Free tax preparation and electronic filing available for 97 million eligible taxpayers who earn $54,000 or less; Free File marks its sixth year. If your adjusted gross income [AGI] was $54,000 or less in 2007, you can use Free File to prepare and e-file your taxes online.

Free File will be available 24 hours a day, 7 days a week through our network of partners, but it's important to remember that you must access Free File through the IRS website [irs.gov]. Get a faster refund, in as little as 10 days with Direct Deposit.

Free File applies to Federal taxes, while Fees for state tax returns may apply; however, some companies offer Free File state tax return preparation and e-filing.

Looks like there are 19 different e-file programs to chose from, including all the well known ones like H&R Block and TurboTax. It's just like using the paid version of the software, except it's free.

In 2006, the median annual household income according to the US Census Bureau was determined to be $48,201.00. The median income per household member (including all working and non-working members above the age of 14) in the year 2006 was $26,036.

Kentucky Tax Return Services

According to the June 2007 survey of Kentucky households by the Brookings Institute, an independent research and policy organization, about one in three lower-income households pay a for-profit tax preparation service to do their taxes - households that are two to six times more likely than all others to use refund anticipation loans, carrying fees that generally range from $10 to $80.

But to Lisa Locke, community affairs specialist for the Louisville branch of the Federal Reserve Bank of St. Louis, tax time shouldn’t be about spending for services - lower-income families should instead participate in local programs that can help build financial assets.

“You have someone willing to follow up with you for the whole asset-building process,” Locke said, referring to the Barren River Asset Building Coalition’s partnerships with the City of Bowling Green’s financial education and homeownership workshops, as well as programs offered locally through the Housing Authority of Bowling Green and Housing and Development Services.

The coalition’s annual free tax sites are opening all over southcentral Kentucky to give help to low- to moderate-income families needing tax-filing assistance.

Tabatha Gregory, one of the main organizers for the coalition, said more than 1,400 people used the sites last year. Though some taxpayers will be affected by late enactment of the alternative minimum tax “patch” in December, Gregory said many of the local families who use the free tax sites aren’t likely to be included among the more than 13 million taxpayers affected nationwide.

The Internal Revenue Service has chosen Feb. 11 as the day taxpayers can submit the five AMT-related returns affected by the legislation. The February date allows the IRS enough time to update and test its systems to accommodate the AMT changes without major disruptions to other operations related to the tax season, the IRS said in December.

But Gregory says if any taxpayer that comes to a coalition site has to file using any of the AMT-related forms, they can still have their taxes prepared at the sites - the preparers will submit their returns for them free of charge in mid-February.

“The goal is to deter people form seeking refund anticipation loans,” said Gregory.

IRS Free File Software Now Open for Tax Preparation

Many taxpayers can prepare and file their federal income tax returns on the Web at no charge. These free tax preparation services are provided through the Free File Program, which is a collaboration between the IRS and various software publishers to make their tax prep programs available free of charge to eligible taxpayers. Taxpayers with an adjusted gross income of $54,000 or less will be eligible to use the Free File services. The IRS estimates that seven out of ten taxpayers will be able to use the Free File program to prepare and to file their taxes. Each participating vendor sets its own eligibility criteria, however. Popular tax program TurboTax is available through Free File, for example, "if your Adjusted Gross Income is $30,000 or less or you will claim EITC, or you are active duty military with an AGI of $54,000 or less." Other vendors have similar eligibility criteria, which can make it confusing just to start the tax preparation process.

If you are going to do your taxes yourself, (and I can think of a lot of reasons why you should not!) why pay for tax preparation software? There are a number of online sites that will allow you to prepare and efile your federal tax return for free…if you meet certain criteria

If your gross income for 2007 is under $54,000, you may qualify to have your taxes filed for free with a number of different online tax preparation websites. If you need a state tax return done, most of the sites will include state tax preparation for a small fee. All sites include free e-file.

I will highlight a few of them here, but you can see the whole list at the IRS website. It is important to note, I am not providing links to the companies, because to get the best free file deal you need to access them through the IRS website. Going directly to the company website may cost you money!

A few of the big name companies are there, including Turbo Tax, Liberty Tax Service, and H&R Block’s Tax Cut. Names familiar to professional tax preparers include Tax Act and Tax Slayer, and FileYourTaxes.com.

In addition to free filing of your federal return, Liberty Tax Service offers state return filing for $9.95 each. If you don’t qualify for the free file, the federal return is also just $9.95

Turbo Tax is a little more restrictive, with free Federal Tax Preparation for only those with incomes below $30,000 or Active Duty military. They do offer free state filing for some states. If your state is one they don’t do for free, the cost is $9.95. They have a variety of options for those that don’t qualify for free filing starting at $14.95.

The H&R Block free tax site offers interview only service. To include a state return is $29.95.

In some of the lesser known companies there are some good deals. Online taxes has state returns for just $7.95. If you don’t qualify for the free file Federal taxes are also just $7.95. They also offer free telephone support.

Tax$imple is also a good deal with $7.95 state returns and if you don’t qualify for the free file the federal return is just $9.95.

Why are companies offering free filing? In addition to being listed on the IRS website, they are hopeing to sell you “value added services”. Often the free filing versions are very stripped down models of their paid filing products. They hope that once they get you started on your tax return you might decide to pay for some extra services.

Research the companies carefully to choose the firm that is best for you. Note that some companies may have slowdowns during high traffic times, particularly in early February and April. Don’t wait until the last minute to file your return. Chances are good that all these sites will have heavy loads on April 15. You don’t want to be in the middle of preparing your taxes when their servers go down! Make sure to make a copy of your tax return, and keep a backup on your computer.

Illinois Free Tax Preparation

Want to get your taxes done for free?

Who wouldn't, well now you can by visiting any of the Center for Economic Progress Free Tax Preparation sites.

Services are free to families with annual incomes of less than $40,000 or individuals making less than $15,000.

Make sure you bring the following documents with you to the tax sites:

• All W-2 and 1099's (if any)
• Social Security Cards or Individual Taxpayer Identification Numbers for all family members
• Copy of 2006 tax returns, if available
• Bank account number and routing number
• Valid photo ID

But there are several throughout the state of Illinois

It’s that time of year again and Uncle Sam is back for more. However, free tax services are available again this year for low income Livingston County residents. The Accounting Aid Society is offering free tax preparation and filing at Cleary University’s Genoa Township campus on Saturdays through April 12th. Assistance is also offered at the Brighton Senior Center by appointment. Individuals with an annual income of $20,000 or less are eligible regardless of age as well as families or married couples with $40,000 annual income or less. Last year, 306 Livingston County residents were helped, which helped facilitate the return of more than $348,000 in tax refunds and credits.

Free Tax Prep for Seniors

Elderly taxpayers (over age 60) qualify for free tax assistance at local sites across the U.S.

IRS-sponsored tax assistance programs are available to certain U.S. taxpayers. Those with low or moderate income levels (generally under $40,000) are eligible for free tax preparation under the Volunteer Income Tax Assistance (VITA) program. Although many senior citizens fall under this category, free tax assistance is also available to them via the IRS-sponsored Tax Counseling for the Elderly (TCE) program.

Through the TCE program, the IRS partners with local community organizations and groups across the United States to offer free tax preparation to senior citizens. TCE sites are manned by volunteers, often retired individuals who are associated with local nonprofit organizations. The IRS supports the program through grants that reimburse volunteers for expenses.

Who Qualifies for Free Tax Assistance through TCE?

Tax Counseling for the Elderly caters primarily to individuals who are age 60 or older. However, the IRS does not set specific eligibility rules for free tax assistance through the TCE program, so taxpayers should inquire at each local site regarding that site’s specific eligibility criteria. Certain TCE sites may also offer free assistance to younger taxpayers as volunteer time permits.

A major partner in the TCE program is the AARP. According to the IRS, the AARP’s program, called AARP Tax-Aide, offers free tax preparation at thousands of sites around the country. Per the AARP Tax-Aide website, this program serves “low- and middle-income taxpayers with special attention to those ages 60 and older.”

What Tax Forms Will They Prepare for Free?

Volunteers can prepare Form 1040, Form 1040A, Form 1040EZ, Form 1040, Schedule A&B, and Form 1040, Schedule D. To ensure the volunteer has enough information to prepare a tax return, the IRS recommends that taxpayers bring along some basic tax information listed on IRS.gov.

How to Find a TCE Partner Site

Taxpayers may call 1-800-829-1040 to find locations and operation hours of local TCE sites. Senior citizens may call the IRS number above or the AARP Tax-Aide hotline at 1-888-227-7669 to locate the closest AARP site. Additionally, a list of AARP Tax-Aide sites can be searched by zip code online.

According to the AARP Tax-Aide website, local sites are open from February 1 through April 15th during each tax season.

More Free Tax Help Is Available

In addition to the free assistance with annual tax filing obligations, taxpayers may request help with unresolved tax problems by contacting the National Taxpayer Advocate Service, an independent organization within the IRS.