“Free” is probably my favorite word in the English dictionary. Yes, I am a little tight with a buck, and wherever I can save money my answer is, why not. As a financial professional I believe money looks better in your pocket than it does anywhere else. Throughout my 40 plus years in the investment world, I’ve always told investors that cost and fees matter and that it’s important to take them into consideration in making investment decisions. I believe that low-cost investing keeps more money in an investor’s pocket – exactly where it belongs. That being said, I believe we all need to look for ways to reduce costs and fees. Since this is tax season, I want to share some ways you can save money on your tax preparation costs and potentially eliminate them through the IRS’s Free File Program.
For many years, the IRS has partnered with tax preparation software companies to allow taxpayers to access a variety of company’s software packages for free. In 2024, over 140,000 taxpayers took advantage of this program, saving them nearly $6 million in tax preparation costs. To qualify for this program, your adjusted gross income must be $84,000 or less. It’s that easy.
The free software can be accessed through the IRS’s website. Be sure to only use this link as there are many scams and fraudulent programs attempting to steal taxpayer information.
This year, the IRS has partnered with multiple software companies including 1040.com, 1040 Now, EZ tax return, File Your Taxes.com, Free Tax, USA, Online Taxes, Tax Act, and Tax Slayer. The software provided is essentially the same software available for purchase – so it is high quality, and free.
Although the program is geared for federal returns, some software companies also offer free state tax preparation.
If you meet the income requirement, I suggest you consider the Free File Program. After all, if you can save hundreds of dollars on your tax return, why not?
Some may be concerned that given the multiple providers, it might be challenging to choose the right software for you. The IRS provides taxpayers with a “choose a trusted partner” feature that will help you find the software package the best fits your situation.
Recent statistics show that over 70% of Americans qualify to use the Free File tool – you just might be one of them. Saving the cost of a professional preparing your tax return is certainly not going to make you rich. However, it will save you money and as I’ve always said, that money looks better in your pocket than it does anywhere else.
Good luck!
