Smart Spending

Using Free Tax Software to File Your Return

Filing an income tax return is one of those necessary evils we all must face once a year. Even those who have professionals prepare their taxes have to do some work gathering their information together and toting the information up to the accountant’s office—unless of course they have a full time accountant to do such work.

For the rest of us, using tax software is a less painful and inexpensive way to prepare our taxes. The IRS even endorses eFiling as the “safest, fastest and easiest way to submit” individual tax returns. The typical return can be done on the income tax software’s lowest cost tier of around $30.00. If you are self-employed, own a small business, have farm income, or have investments, then you most likely will need the top level tier for a little over $100.

In recent years, these programs have become very popular with those who are computer literate with a general understanding of the tax filing process.  For those who have complicated returns and need a little help, the top software programs have added free live support through chat, telephone or even video conferencing.

However, many who are able to file the simplest of tax returns, the 1040EZ, either do not feel comfortable filing their own returns or they are in too big of a hurry for their refunds to wait which is the reason for the proliferation of  income tax refund tax preparers of recent years.

Which is sad, considering that most of these taxpayers could save the $100 or so they pay for this service by using the free tax filing software and free eFiling offered by the IRS  and still get a quick refund using direct deposit.

According to the IRS, 70% of the population has an adjusted gross income of $57,000, which qualifies most taxpayers to use free tax software available at the Internal Revenue Service website, The site offers a list of the companies offering the software and a survey to help taxpayers choose which one will work best for them.

This is the criteria for using the free software:

  • Free File companies have their own eligibility criteria, but none offer Free File to taxpayers with an Adjusted Gross Income of more than $57,000.
  • Other eligibility criteria may include your age, state, eligibility for the Earned Income Tax Credit, and military status.
  • Check the company’s website for details because the companies’ offers may differ. For example, some companies charge a fee for state tax returns and some may not support a particular form you need to file.
  • Remember to begin your Free File return at or you may be charged a fee or asked to buy additional products and services.

In the end, whether you pay someone or use do-it-yourself software to do your taxes depends on how comfortable you are and how complicated filing your taxes is.

At least the IRS is taking some steps to help improve the situation for those who can least afford to pay someone to do their taxes. Now, if only those most in need had either the ability or the patience to take advantage of the free service.