IRS Free File Looks Like A Good Tax Filing Option For Eligible Taxpayers

Free File, which is offered through the IRS website, offers a way for eligible taxpayers to file their tax returns for free. A taxpayer eligible for Free File must have an Adjusted Gross Income of $54,000 or less.

Free File is actually an alliance between the IRS and the Free File Alliance LLC, which is a group of private sector tax software companies. From the Free File page on the IRS website, you are directed to a list of these software companies.

Basically, then, the Free File involves finding one of these private sector software companies, which you can do from a list on the IRS Free File web page. Not all of the companies file all the states, so you’ll have to find a company that can file your state’s income tax return if you live in a state with a state income tax. The list of software companies contains some very well known names, like H&R Block and Liberty Tax Service.

Once you’ve chosen the company you want to use, you’ll go to that company’s web site and register. I registered with Tax Act Online just to see what the process was like.

The basic tax return process is then fairly simple. For example, the Tax Act site takes the user through a Question and Answer format in six areas: Basic Information, Life Events, Federal Q&A, State Q&A, Review, Filing, and Next Year. The Question and Answer format makes it very easy to input your information. For example, the Federal Q&A will ask if you received a W-2 from an employer. If you answer yes, you are then taken to a screen where you input info from your W-2.

After you finish preparing your return, you can then review it and then securely e-file both your federal and state returns online and set up direct deposit of your refunds as well.

So, all in all, for eligible taxpayers and especially for those eligible taxpayers with basic itemized returns, the Free File looks like a great deal and a good way to save some bucks on tax return preparation. For more information on the IRS Free File program, please go to www.irs.gov and click on the 2008 Free File link at the top of the page.