And, just in time for the new tax season, the IRS announced it has signed a new agreement with companies that electronically prepare free returns for eligible taxpayers.
In partnership with private-sector tax-preparation companies, the IRS Free File program was created to assist those with low or moderate incomes to prepare and e-file their returns at no cost. About 57 million tax forms have been filed through Free File since its debut in 2003, according to Eric Smith, a spokesman for the IRS.
This year, taxpayers with adjusted gross incomes of $69,000 or less can use free commercial software by going to IRS.gov/freefile. Free File will open by the afternoon of Jan. 10, although taxpayers won’t actually be able to file their returns until the start of the tax season, Smith said.
The IRS hopes Free File will now be more user-friendly.
To search for companies that are participating in the Free File program, go to the Free File page on irs.gov. Once you select a company, you leave the IRS official website and are directed to the partner site to prepare your return. Each company participating in the Free File program sets its own eligibility requirements, which may include your age, state or income.
Last year, some popular tax-software companies were criticized for making their Free File Web pages difficult for taxpayers to find. Instead of starting at irs.gov, some folks search online for the Free File program. According to reporting by ProPublica, the companies blocked those pages from being visible by search engines, which may have steered some inquiring customers onto a track to pay a fee to file.
Companies participating in the Free File program are now prohibited from such practices, including adding coding that would effectively hide their Free File landing page from an Internet search.
Taxpayers also complained about the confusion over various free offerings, making it difficult to know whether they were actually using the official IRS Free File program. Starting with the 2020 tax season, participating tax-preparation firms have to use the following standard language: “IRS Free File Program delivered by [company name or product name].”
The companies have to ensure there is a link on their sites to direct taxpayers back to the IRS Free File landing page if taxpayers realize they aren’t eligible for that firm’s particular offering. By steering them back to the IRS, people can search for other offerings for which they may be eligible.
“These changes will make Free File easier to find and easier to use, while at the same time strengthening consumer protections,” Smith said. “We’re especially proud that any active-duty member of the military with an income of $69,000 or less can now choose to use any one of the Free File products.”
Before settling on one company, check to see if you can also file your state return. Some companies will prepare your state return and e-file it free through partnerships with participating state programs.
Only participants in Free File can use the software providing step-by-step help by asking questions about their tax situation.
If your income exceeds $69,000, you can still use the Free File Fillable Forms, which are the electronic versions of IRS paper forms that are designed for people who are already comfortable filling out forms. When using the fill-in forms, you can perform basic calculations, sign and submit your return electronically. Just note, the fillable forms do not come with the brand-name software assistance available through Free File.
The IRS says 70 percent of American taxpayers are eligible for Free File. In an effort to get better data about people’s experiences, companies will now have to use a “statistically valid methodology to randomly select and survey taxpayers who successfully e-filed a tax return through the Free File program,” according to the signed agreement.
I certainly hope these changes make it easier for people to use the Free File program. At the least, no one should be duped into paying for a product or service that was designed to cost nothing.
Readers may write to Michelle Singletary at The Washington Post, 1301 K St. NW, Washington, D.C. 20071 or firstname.lastname@example.org. To read previous Color of Money columns, go to http://wapo.st/michelle-singletary.