Filing taxes can be highly confusing and stressful, and if you choose to use a tax filing service, it can also be costly. With the many places to do your taxes online, it can take some time to make your way through all of your options to find the cheapest way to file taxes. Fortunately, there are affordable options that can ease preparing and filing taxes.
Free Tax Preparation for Qualifying Individuals
The experts at the IRS offer free tax preparation services for qualifying individuals through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. According to the IRS, the VITA program provides free preparation assistance for individuals with disabilities, limited English-speaking experience and who generally make $58,000 a year or less.
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In addition to VITA, the TCE program is available to tax filers who are 60 years and older, providing specialized knowledge to assist with pensions, retirement-related issues and other tax filing questions unique to seniors. The IRS manages both programs; however, volunteers staff each program and the sites are run by IRS partners. Every volunteer is certified by the IRS to provide tax filing assistance. They are typically retired professionals associated with non-profit organizations that receive grant funding from the IRS. Additionally, every return prepared within one of the programs must undergo quality review before filing.
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Brand Tax Preparation Services
Other tax filing services are available for those who do not meet the qualifications to receive assistance through the VITA and TCE programs. Many branded tax preparation and filing services such as TurboTax and H&R Block have free preparation packages for simple tax returns.
But what exactly does a simple tax return mean? A simple tax return typically refers to Form 1040 only, covering situations such as W-2 income, student loan interest deduction, Earned Income Tax Credit, child tax credits and others. The services covered with a free package will vary depending on the tax preparation services.
Any tax situation that is not covered in the free package will be available at increasing price points in other packages. Price points and covered situations will vary depending on the provider; however, prices for these additional services typically range from around $50 to $120, in addition to federal and state filing fees.
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What’s the Cheapest Way to File Taxes?
When you go through a branded tax service, such as TurboTax or H&R Block, you will often have to pay a filing fee for both your federal and state taxes, in addition to the package you purchased to navigate the filing process. So, if there are additional fees when using a tax filing service, what's the cheapest way to file taxes?
Suppose you are not eligible for the IRS's VITA or TCE programs. In that case, the cheapest way to file taxes is to do them yourself with IRS Free File, a service provided by the IRS in partnership with private tax preparation and filing software companies. According to the experts at the IRS, IRS Free File allows you to prepare and file federal individual income tax returns electronically. It also provides filers with Free File Fillable Forms.
To use IRS Free File, filers must select a filing option on the IRS's official site to receive the free filing benefits. Filers are given a choice of several free file options provided by partnered companies where they can select the service that best suits their needs. Once the filer selects a particular filing option, they will be taken to the partner's site where they can create an account, prepare and electronically file their federal tax return. The IRS will then notify them via email once the IRS accepts their return.
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