- The IRS and cooperating private companies provide free access to online tax preparation and filing software. Any taxpayer who has an adjusted gross income under the yearly limit ($56,000 for the 2008 tax year) may use the Free File system at no charge to prepare and file federal tax returns. Participating companies may charge fees for state tax returns. If you made too much to be eligible for Free File, the IRS also provides an online database of forms and tools you may use to prepare and file your return electronically. You can even use the system to file an extension online if that should be necessary. The IRS Free File system becomes active in mid-January and taxpayers have access until the close of the extended filing period each year (around October 1).
- Access the IRS Free File system through their website, irs.gov. Select "Link to Free Online Filing," followed by "Choose a Company." You'll see a list of tax-preparation companies along with the specific terms and conditions of their offers. Click on the one that seems best for your needs and the system will take you to that company's online tax software system. Once you create an account, you'll have free access to the tax-preparation and filing software. In most cases the system will ask you if you want to file your state tax return as well. If you agree, you will be charged a fee, but only for the state tax return filing. At the end you may print out your return and mail it in or sign it electronically and submit it directly to the IRS.
- If you discover you earned more than the yearly limit to qualify for Free File, you may still choose to use the system. However, in this case you will have to pay a fee. Alternatively, you may elect to use the IRS "Free Filable Forms" system. This is a database of most IRS forms you might need along with instructions and online tools such as a tax calculator. The Free Filable Forms system does not prepare your taxes as does a tax software package, but you can use it to do your taxes yourself and submit them electronically. Free Filable Forms is available to anyone regardless of income.
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