You may be entitled to free tax prep: Here's how to get it


How much did you pay to do your taxes last year? However much it was, you may have overpaid. Millions of people are eligible for free tax preparation but don’t realize it.

“It’s financially savvy to try to file your return for free, and many people can do so,” says Amy Wang, senior manager for tax policy and advocacy for the American Institute of Certified Public Accountants.

Potential savings depend on how you usually prepare and file your taxes. In 2018, the national average fee to have a professional prepare and file a federal and state return claiming the standard deduction was $188, according to data from the National Society of Accountants. Itemized returns averaged $294.

When it comes to no-cost programs, there are several you might qualify for. Many software providers have free offerings for “simple” returns, says Wang, and AARP and the IRS offer in-person volunteer assistance programs. (More on those, below.)

The big option is called Free File . It’s a partnership between the IRS and the Free File Alliance, a nonprofit group of tax prep software providers including H&R Block, Jackson Hewitt and TurboTax.

If you’re eligible, you get free access to the partners’ tax software to prepare your federal return, and then file it for free. (You may also be able to prepare and file your state return for free.)

About 7 in 10 taxpayers — 100 million people — qualify for Free File. But the IRS has no advertising budget, so only about 3 million people use the program in a given year, Tim Hugo, executive director of the Free File Alliance, told Grow earlier this year.

“I just wish more people knew about it,” he says.

How big of a missed opportunity is this? At the end of each year, the National Taxpayer Advocate presents a report to Congress on the most serious tax problems it sees that affect consumers’ rights. In its latest report , Free File landed at #4.

“Use of the Free File program has steadily declined, and the IRS is devoting minimal resources to oversight and testing of this program to understand why taxpayers aren't using it and how the services offered could be improved,” according to the report.

To put its numbers in perspective, more people prepare and file a paper return themselves than use the Free File option.

Here’s how to take advantage of free tax filing options 

Who is eligible?

The first qualifier: How much you make. For example, Free File is open to taxpayers who earn about $66,000 or less. If you’re just over that threshold, grab last year’s tax return and use the program tool to check your eligibility. The complexity of your return matters, too, says Wang. Software providers often restrict eligibility to consumers who have “simple” returns, meaning they have W-2 income, limited investment income and are claiming the standard deduction. (Many also work with consumers filing the Earned Income Tax Credit.)

If you’re self-employed or if you itemize your deductions or have income from more complicated sources (say, rental properties or stock sales), you’re less likely to qualify, she says.

How it works 

Start your search at the IRS Free File site, Wang says. There, you can choose from the options available to you based on where you live and other factors like your age and military status.

You’ll be redirected to that software provider’s site to complete your return. Depending on those localized options, some consumers might find they aren’t eligible for Free File, or don’t have access to a program that’s a good fit for their particular needs, according to the Taxpayer Advocate Service report. For example, the advocate found that in 2018, only three of the 12 providers offered prep for consumers of all ages, and five providers had cutoffs earlier than age 60.

You can, and should, compare the offerings against what software providers are offering on their own sites. But to get the Free File program deal, you have to go through the IRS Free File site. If you go directly to the preparer’s site, you won’t get the same deal, Hugo says.

Where to get in-person help

If you want free in-person help, the IRS and AARP operate out of some community centers, libraries and schools. The IRS Volunteer Income Tax Assistance (VITA) program works with people with disabilities, who speak limited English or who make $55,000 or less; its Tax Counseling for the Elderly (TCE) program focuses on people age 60 and older. AARP says its Tax-Aide program offers free help to anyone but is particularly geared toward people age 50 and older.