Are you filing your own taxes to save money but paying for software or mailing in paper copies? Did you know the IRS has a free file program available for your use?
The Internal Revenue Service recently announced that it will extend its Free File program through October 2029, ensuring the continued availability of free tax software from third-party vendors. This extension comes even as the IRS tested its own free tax software in a dozen states this tax season, with plans to potentially expand it next year.
The IRS has signed a five-year extension agreement with the Free File Inc. consortium, which saw an increase of about 200,000 tax returns, reaching 2.9 million returns as of May 11, 2024, a 7.3% increase from the previous year. In contrast, the IRS’s Direct File pilot program, available in only 12 states and limited to certain types of income, attracted 140,803 taxpayers.
The Free File program, however, is limited to taxpayers with an adjusted gross income (AGI) of $79,000 or less in 2023. Those with higher AGI can use the IRS’s Free File Fillable Forms. Eight private-sector partners provided online tax software through Free File this year, but notable market leaders like TurboTax and H&R Block did not participate.
Unlike the Direct File program, which ended in mid-April, Free File will remain open through October 15 for those who filed an extension. IRS Commissioner Danny Werfel highlighted the importance of Free File, noting its role in a successful filing season and the growth in free tax programs.
Additionally, the IRS reported an increase in free tax returns prepared at its Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites, with 2.6 million returns prepared, up by 200,000 from the previous year.
If you meet the income level to use the Free File Program and are currently mailing in paper returns to save on fees to professional tax preparers, be sure to look into the Free File program to make your submissions easier and more secure.
