Tips & Topics - Taxes
Free Tax Preparation
Several years ago, the IRS negotiated an agreement with a number of these providers of online tax preparation and filing to offer free filing services to taxpayers below a certain income level through the Free File Alliance. Free File with guided tax preparation is generally available to individuals who earned less than $56,000 in tax year 2008, representing approximately 70 percent of all filers, or roughly 97 million taxpayers.
The IRS also offers a Free File option available at no charge to all taxpayers, regardless of income level. If you choose to prepare your own return, without the guided assistance of an online tax preparation program, you may now fill out your tax forms 1040, 1040A or 1040EZ online, and file them electronically with the IRS at no charge. The online forms perform basic calculations for you but do not provide tax advice or guide you through the process of completing your tax return. The program is available in both English and Spanish by visiting the IRS website.
Free file in New York State
Although Free File is available only for federal income tax returns, some participating Free File Alliance companies also offer state tax return preparation and e-filing at no charge. New York State taxpayers interested in Free File should visit the New York State Department of Taxation and Finance Free File website to see if they qualify for no cost online tax preparation and filing of both State and federal tax returns. Please note, however, that the criteria for qualifying for State Free File are more restrictive than the criteria for federal Free File.
Program benefits
According to the IRS, Free File is easy to complete, as well as safe and secure. Typically, you will receive your refund faster than if you filed by mail, often within two weeks when you use direct deposit. The software programs are revised to provide up-to-date information to complete returns accurately.
If you qualify for the Earned Income Tax Credit (EITC), you can use Free File to claim your credit and to prepare and file your return.
Free tax preparation programs
There is an entire industry of professional tax advisors and preparers whose business is to help taxpayers prepare their tax returns for a fee. Most of these tax professionals will also electronically file your tax return on your behalf.
However, if you’re looking for free assistance in preparing and electronically filing your New York State and federal income tax returns, you may be eligible for one of several programs sponsored by the Internal Revenue Service (IRS). Information from the IRS on these programs is summarized below.
Free tax return preparation and electronic filing by trained volunteers
The IRS Volunteer Income Tax Assistance Program and the Tax Counseling for the Elderly Program offer free tax preparation help from trained community volunteers to those who qualify. In addition to free help, most sites also offer free electronic filing (e-filing). Individuals who use the e-file program typically receive their refunds in half the time required for returns filed on paper.
- The Volunteer Income Tax Assistance (VITA) Program offers free tax help to low- to moderate-income people (generally, $42,000 and below) who cannot prepare their own tax returns. VITA sites are typically located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations. To locate the nearest VITA site, call 1-800-829-1040, or click here for a list of VITA sites by county, as provided by the New York State Office of Temporary and Disability Assistance.
- The Tax Counseling for the Elderly (TCE) Program provides free tax help to people aged 60 and older. Volunteers who provide tax counseling are often retired individuals associated with nonprofit organizations that receive grants from the IRS. For more information on TCE, call 1-800-829-1040.
Free assistance for military personnel and their families
The U.S. Armed Forces participates in the Volunteer Income Tax Assistance (VITA) Program as well. The Armed Forces Tax Council (AFTC) consists of the tax program coordinators for the Army, Air Force, Navy, Marine Corps and Coast Guard. The AFTC oversees the operation of the military tax programs worldwide, and serves as the main conduit for outreach by the IRS to military personnel and their families. Marines, airmen, soldiers, sailors, guardsmen and their families may be eligible to receive free tax preparation assistance at offices within their installations.
Commanders support the program by detailing service members to prepare returns and by providing space and equipment for tax centers. The IRS supports these efforts by providing tax software and by training service members to prepare taxes at the military sites.
For more information about free tax preparation assistance available to members of the military, click here.
Next: Identifying and Avoiding Dishonest Tax Preparers