Photo (cc) by kenteegardin
April 15 — Tax Day — isn’t as far off as it sounds. If you’ll need help preparing state and federal tax forms, start now so you won’t be fighting crowds in late March. The IRS starts accepting federal tax filings, on paper or electronically, Jan. 20.
Americans will pay $273, on average, this year to get help preparing and filing an itemized Form 1040 with Schedule A and a 2014 state tax return, according to a survey of members of the National Society of Accountants. Taxpayers filing with no deductions will pay an average of $159, the society told me.
That’s no doubt a worthwhile expense for many. But free is better.
Many national programs charge nothing to help taxpayers prepare and file their taxes. Eligibility varies by program, and most — but not all — have maximum income qualifications. You’ll find eligibility requirements below.
But first, watch this video to see Money Talks News founder Stacy Johnson describe some free programs. Then keep reading to learn more about how to get free tax help.
When should you DIY?
Don’t discount your ability to prepare your taxes on your own. Lifehacker advises doing your own taxes if your return is simple and straightforward.
Do get help, however, if you:
- Dread tax forms.
- Own real estate.
- Are a landlord.
- Are self-employed.
- Worry you’ll make mistakes.
- Own investments that generate capital gains and dividends.
Many types of free help
You’ll find variety among the free programs. All free programs help with simple tax situations. If you have a situation that’s complex, you probably will need to use a fee-for-service accountant. Call the program you want to use to ask.
Here are eight free sources of help, with details and eligibility requirements, if any:
1. Volunteer Income Tax Assistance
An IRS-sponsored program called VITA (Volunteer Income Tax Assistance) uses trained volunteers to help taxpayers complete basic state and federal tax returns. According to Free File Alliance, a nonprofit coalition of tax preparation software companies:
VITA sites are staffed by IRS-certified volunteers, who help taxpayers complete their annual tax return and provide information about tax credits, such as the Earned Income Tax Credit, Child Tax Credit, and Credit for the Elderly or the Disabled.
Who’s eligible: Taxpayers earning $53,000 a year or less, the elderly, those with disabilities, and people with limited English-speaking abilities.
- Use VITA’s online locator tool to learn when and where to find free tax prep help and whether you’ll need an appointment or can walk in. Or call 800-906-9887.
- “Self-prep” is an alternative. You prepare and file your own basic state and federal tax forms using Web-based tax software and with help from an IRS-certified volunteer. Check online or by phone for locations offering self-prep.
- Here is a list of what to take with you.
2. Tax Counseling for the Elderly
The IRS certifies volunteers who provide free tax preparation aimed especially at older taxpayers through Tax Counseling for the Elderly. Many TCE volunteers work with the AARP Foundation’s Tax-Aide program. Tax-Aide deploys about 35,000 volunteers who help 2.6 million taxpayers each year at some 5,000 locations nationally, typically community centers, schools, libraries and shopping centers, according to AARP.
Who’s eligible: The service is free to anyone. It’s meant particularly for people 60 and older. Preparers can help with questions about retirement-related issues and pensions.
- Use AARP’s online locator to find out when and where to find an AARP Tax Aide near you. Or call 888-227-7669.
- Want to be an AARP volunteer tax preparer? Learn more and sign up.
- AARP has additional resources and information on federal taxes.
3. IRS Free File
Free File is a partnership between the IRS and 14 makers of commercial tax preparation software. Taxpayers can use, free of charge, secure, brand-name tax preparation software. Self-assist computer kiosks are available in some locations.
There’s no charge for help with federal tax forms.
Who’s eligible: You qualify if your adjusted gross income in 2014 was $60,000 or less (last year’s cutoff was $52,000). About 70 percent of Americans qualify, according to Free File Alliance.
Cheapism says, however, that “each company also has its own income, age and residency requirements within the IRS limit, some stricter than others.” It adds:
These companies also hawk free editions without any income or age requirements, but they come with “value-added offers” for paid software and features. The more complicated the tax situation, the more likely a required upgrade.
- A State Free File program offers free help with some, but not all, state income tax forms, through a partnership between Free File Alliance member companies and a limited number of states. Find links to those state programs here (state sites may be inactive until Jan. 20).
- Here’s a chart showing how Free File works.
- Find kiosk sites and access Free File here beginning Jan. 16.
- Free File Alliance’s FAQ answers many questions.
4. IRS Free File Fillable Forms
There is no income limit for getting help from another free IRS program: Free File Fillable Forms.
Fillable Forms gives you access to electronic versions of IRS paper tax forms. You complete and file them online; the forms do your math for you. Benefits include tracking your return and getting refunds more quickly. Fillable Forms is a good choice if you have previously completed your own tax forms, the IRS says.
Who’s eligible: Anyone.