How Can I File My Taxes for Free? Tips and Tricks for 2021

I. Introduction

It’s that time of the year again when we have to file our taxes. But for those of us who are not so financially savvy, the whole process can be quite daunting. Luckily, there are ways to file taxes for free online, which is a great way to save money. In this article, we will discuss the top 5 free tax filing software, how to file your taxes for free using the IRS Free File program, the taxpayers who are eligible to use this program, the pros and cons of using a tax preparer versus filing online, tips for maximizing your deductions and credits, and answers to frequently asked questions.

II. Top 5 Free Tax Filing Software

Before we dive into the details of tax software, let’s talk about why it’s important to use free tax filing software instead of paying for a service. First of all, it’s free, which means more money in your pocket. Second, it’s easy to use, and you don’t need to be a financial expert to do your taxes. Lastly, most tax software will direct you through the process step-by-step to ensure that you don’t miss anything, which can be quite helpful.

Here are the top 5 free tax filing software:

1. TurboTax: TurboTax is a user-friendly tax software program that can handle even the most complex tax situations. It comes with a variety of features, including a tax refund calculator, the ability to import W-2 forms, and an option to get live help from a tax expert.
2. H&R Block: H&R Block is another popular tax software program that offers a user-friendly interface and the ability to import tax forms. It also includes a feature that checks for audit triggers to reduce the chances of an audit.
3. FreeTaxUSA: FreeTaxUSA provides all of the basic features needed for filing taxes for free online. It is a great option for those who have a simple tax situation.
4. TaxAct: TaxAct offers a free version that includes all the features you need to file a simple tax return. It also includes a feature that allows you to import tax forms and an option to upgrade if your situation is more complex.
5. Credit Karma Tax: Credit Karma Tax is one of the newer tax software programs on the market. It offers a user-friendly interface, free state and federal filing, and the ability to import tax forms.

All of these tax software programs are user-friendly, offer excellent features, and allow you to file your taxes for free. It’s important to read about each program to determine which one is right for you and your unique tax situation.

III. How to File Your Taxes for Free Using the IRS Free File Program

Another option for taxpayers who prefer not to pay for a tax service is the IRS Free File program. This program allows you to prepare and file your federal income tax return for free using online tax software. To use this program, you must have an adjusted gross income of $72,000 or less in 2020.

Here are the step-by-step instructions on how to file your taxes for free using the IRS Free File program:

1. Visit the IRS Free File website.
2. Choose a tax software program that is part of the Free File Alliance.
3. Follow the instructions provided by the tax software to fill out your tax return.
4. Submit your tax return electronically to the IRS.

It’s important to note that not all taxpayers will qualify for the IRS Free File program. Those who earn more than $72,000 cannot use this service. State tax returns may also have a fee associated with them, depending on the software program you use.

The benefits of using the IRS Free File program include:

• Free use of tax software from well-known companies.
• Filers can use a step-by-step guided software to identify tax credits, including the Recovery Rebate Credit.
• E-filing is available for both federal and state returns.
• The program allows split refunds, including the ability to use a refund to buy savings bonds.

IV. Taxpayers Eligible to File for Free

If you missed the deadline for eligibility for the IRS Free File program, there is still a chance to file your taxes for free. Those who qualify for the Earned Income Tax Credit (EITC), or have an adjusted gross income of $39,000 or less, are eligible for free tax preparation through the IRS Volunteer Income Tax Assistance (VITA) program. This program is run by volunteers who are trained by the IRS to help prepare basic tax returns for eligible taxpayers.

Additional groups may also be eligible for free tax preparation through the IRS Tax Counseling for the Elderly (TCE) program. This program specializes in helping taxpayers age 60 and older with their tax returns. They also offer free electronic filing.

Other taxpayers who may be eligible for free tax preparation include low-income earners or military personnel, especially during deployment. Check with your local IRS office or other advocacy groups for free tax preparation assistance.

V. The Pros and Cons of Using a Tax Preparer Versus Filing Online for Free

While using a tax preparer can ensure that you receive a maximum refund, it can also be quite expensive. On the other hand, filing online for free offers the convenience of being able to file your taxes from anywhere with an internet connection.

Here are the pros of filing taxes for free online:

• It is free and can save you a lot of money.
• Online software can guide you through the process, ensuring that you don’t miss any deductions or credits.
• You can file from the comfort of your own home and at your own pace.
• You can file your taxes up to the tax deadline, which is usually April 15th or later if there is an extension.

Here are the cons of using a tax preparer:

• It can be expensive, depending on the complexity of your situation.
• Your refund may take longer to receive since you have to wait for it to be processed through the preparer.
• If you use a tax preparer, you must also pay close attention to their work, as you are ultimately responsible for the accuracy of your tax return.

It’s important to compare the pros and cons of both options and weigh them against your unique situation to make an informed decision.

VI. Tips for Maximizing Deductions and Credits When Filing for Free

Maximizing your deductions and credits is crucial when filing your taxes, as it can significantly impact the amount of your refund. Here are some tips for maximizing your deductions and credits when filing your taxes for free:

• Make sure you have all the necessary tax forms, including W-2 and 1099 forms for all income earned, as well as receipts for any deductions.
• Review your tax history to see what deductions you’ve received in the past.
• Consider itemizing your deductions instead of taking the standard deduction.
• Be aware of tax credits you may be entitled to, such as the Child Tax Credit or the Earned Income Tax Credit.
• Contribute to a retirement account to lower your taxable income.

By following these tips, you can maximize the amount of your refund and ensure that you are getting all the deductions and credits you are entitled to.

VII. Answers to Frequently Asked Questions

Here are some of the most commonly asked questions about filing taxes for free:

• Q: What happens if I make a mistake on my tax return?
  A: If you make a mistake on your tax return, you can file an amended return. Keep in mind that you have up to three years to do so.
• Q: What should I do if I receive an audit notice?
  A: First, don’t panic. Review the notice carefully to see what information the IRS is requesting. Then, gather all the necessary documents and respond to the notice within the time frame given.
• Q: Can I file my state tax return for free online?
  A: It depends on the tax software program you use. Some offer free state tax filing, while others may charge a fee.

By knowing the answers to these frequently asked questions, you can feel more confident and prepared when filing your taxes for free.

VIII. Changes or Updates to Free Tax Filing Options for the Current Tax Year

It’s important to stay up-to-date on any changes or updates to free tax filing options for the current tax year. One change for the 2021 tax year is the automatic extension of the tax deadline to May 17th, 2021. This extension applies to both federal and state taxes.

In addition, the income requirements for the IRS Free File program have increased to $72,000 or less in adjusted gross income for the 2020 tax year. Check the IRS website regularly to stay informed about any other changes or updates to free tax filing options.

IX. Conclusion

Filing taxes for free online is an excellent way to save money while also ensuring that you are filing your taxes correctly. By using free tax filing software or the IRS Free File program, you can save time and stress. Maximizing your deductions and credits and knowing the answers to frequently asked questions can help you file your taxes with confidence. Ultimately, it’s up to you to decide whether to use a tax preparer or file online for free, based on your unique situation. Remember to be proactive and stay up-to-date with any changes or updates to free tax filing options.