Hertsel Shadian, Attorney at Law, LLC

IRS Free-File Brand-Name Software and Online Forms Now Available

21 January 2011

For taxpayers who wish to prepare their income tax returns themselves, the IRS on January 14, announced the start of its Free File program for 2011. Everyone can use Free File, the free way to prepare and e-file federal taxes either through brand-name software or online fillable forms. Individuals or families with 2010 adjusted gross incomes of $58,000 or less can use Free File software. Free File Fillable Forms, the electronic version of IRS paper forms, has no income restrictions.

Free File software is a product of a public-private partnership between the IRS and the Free File Alliance, LLC. The Alliance is a consortium of approximately 20 tax software providers who make versions of their products available exclusively at www.irs.gov/freefile. All Free File members must meet certain security requirements and use the latest in encryption technology to protect taxpayers’ information. The IRS approximates that about seventy percent of taxpayers are eligible for Free File software. The software probably is best suited for first-time filers, families with more straight-forward filing requirements that are looking for a way to save money, or older Americans adept at using the Internet.

People with an adjusted gross income of $58,000 or less are eligible for at least one software product if not more. Each of the Free File software providers sets their own eligibility requirements, usually based on qualifiers such as income, state residency, age or military status. The easiest way to locate a software provider is to use the online tool that, with a little of a taxpayer’s personal information, can identify matching products. Otherwise, taxpayers can review all providers and their offers. Some software providers also offer state income tax preparation for free or for a fee.

For taxpayers whose incomes are more than $58,000, there’s Free File Fillable Forms. This software is probably best for taxpayers experienced in preparing their own federal tax returns. For people who prefer doing their taxes the old fashioned way—by paper—this is an electronic alternative. Free File Fillable Forms performs some math calculations and provides links to some IRS publications. However, it does not use the familiar question-and-answer format used by software. Taxpayers can e-file the forms for free.  Free File Fillable Forms also does not support state income tax returns.

Taxpayers must access these tax products through the IRS’s official website at www.IRS.gov to avoid any charges for preparing or to e-file a federal tax return. Free File partners also are prohibited from repeatedly trying to sell taxpayers other products. Once taxpayers have selected a Free File software product, they will be directed away from www.IRS.gov to the partner’s site to prepare and e-file their returns. The IRS states that it does not retain any personal information from the taxpayers.

This year, taxpayers also will see a redesigned Free File page to make it easier for them to navigate the Free File steps. A microsite with additional Free File information and video also has been updated. The microsite, www.freefile.irs.gov, also includes a “spread the word” page that encourages other organizations or businesses to help spread the word about Free File. For example, other organizations or businesses can upload a tax-day countdown widget to their Web sites or make social media postings to help inform their employees, clients or customers about Free File’s availability.

You can help to spread the word about Free File by forwarding this information to others you know who are considering preparing their income tax returns themselves.