Free File Alliance

The Free File Alliance is a group of tax preparation companies that have partnered with the Internal Revenue Service to provide free electronic tax filing services to U.S tax payers meeting certain guidelines.[1] The Free File Alliance claims that the program benefits American taxpayers by providing services that would cost the IRS money to provide if online tax filing were administered directly by the IRS.[1] The IRS stipulates filers must have an adjusted gross income (AGI) of $62,000 or less for tax year 2015,[2][3] $66,000 or less for tax year 2017,[4] but participating companies have their own requirements and restrictions.[5]

Filers with state income tax returns may still pay additional fees of $10 to $30 to electronically file those returns.[6]

In 2007, Alliance members agreed to remove controversial ancillary offerings such as refund anticipation loans (RAL) from the program.[1]

Limitations

The free services often limit their software's ability to handle complex tax situations. Some of the Free File Alliance tax sites and their limitations are:[2]

CompleteTax (interview style)
  • No RALs or other add-on products.
FreeTaxUSA (interview style)
  • No Form 8615 - Tax for children with more than $2,100 in investment income
  • No Form 8824
TurboTax Freedom Edition (interview style)
  • No 1099-B forms - sale of stock, mutual funds, etc.
Liberty Tax Service (line-by-line style)
  • No Form 8824 - Like kind exchanges and section 1043 conflict of interest sales.
  • No Form 2439 - Notice to shareholder of undistributed long-term capital gains.
HR Block
  • Free state return up to $55,000; not all states included.
TaxACT (interview style)
  • Adjusted Gross Income: $51,000 or less, and
  • Age: between 18 and 57, and
  • Live in any state or U.S. Citizens and resident aliens with foreign addresses
  • Free Extensions
1040NOW.NET
  • You live in one of the following states:
AL, AR, AZ, CA, GA, IA, ID, IN, KY, MI, MN, MO, MS, NC, ND, NY, OK, OR, RI, SC, VA, VT or WV
or
  • You live in one of the following states, and you are 60 or younger:
CO, CT, DC, DE, HI, IL, KS, LA, MA, MD, ME, MT, NE, NJ, NM, OH, PA, UT or WI

See also

References

  1. 1 2 3 "Free File Alliance Explained". freefile.com. Retrieved 2016-09-04.
  2. 1 2 "Free File: Do Your Federal Taxes for Free". www.irs.gov. Internal Revenue Service. Retrieved 2016-09-04.
  3. ↑ "About". freefilealliance.org. Retrieved 2016-09-04.
  4. ↑ https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
  5. ↑ "File your taxes free, but read carefully", Seattle Post-Intelligencer, March 20, 2008
  6. ↑ Perez, William (August 5, 2016). "Reviews of Free Tax Preparation Programs". thebalance.com. Retrieved 2016-09-04.
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