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When Free Tax Preparation Isn't Free

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Recently, a consumer wrote to us to ask about free tax filing services. The consumer, Joel, had attempted to use an online tax preparation service that advertised free filing. He ran through the program, filled out all the necessary information, but when it came time to file, he got a message that he is ineligible for free filing. The "free" filing service was not free after all. So what is going on? And is there a way to file for free?

Free If It's Simple

There are legitimately free tax preparation and filing services online. But they only work for the simplest tax situations. If 100% of your income comes from a W-2 source, you may be able to file for free. But if you have any other situation, there's a fee. Common conditions that make you ineligible for free filing are if you are self-employed, a contractor, or a landlord. If you make money that isn't on a W-2, you would have to fill out a form other than a basic 1040. And that's where the fees come in.

Really Free Filing—for Some

If you are looking for free filing and you are one of the 70% of Americans with an adjusted gross income (AGI) under $72,000, the IRS partners with some tax preparation services to offer free filing. Just go to https://apps.irs.gov/app/freeFile/ to find a partner.

If you don't qualify for free tax preparation, you could get the forms from the IRS and do it yourself, but there's no support, and if you make a mistake, there's no one to catch it. For individuals who don't qualify for free tax preparation, or if you just want the security of having an actual human being responsible for your taxes, we recommend contacting a TrustDALE certified tax professional for tax preparation.