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IRS “Free File” Offers Free Tax Software for Anyone with Income Less than $64,000 in 2016

Tuesday, January 24, 2017  
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IRS YouTube Video: Welcome to Free File

The Internal Revenue Service and its private-sector partners announced the 2017 opening of Free File, the free tax software preparation program that gives eligible taxpayers a dozen options for brand-name products.

Anyone whose adjusted gross income (AGI) in 2016 was $64,000 or less — that’s more than 70 percent of taxpayers — will be eligible for Free File software. People who earned more than $64,000 may use Free File Fillable Forms, the electronic version of IRS paper forms, which are available now.

Free File is available exclusively at IRS.gov/FreeFile. The software walks users through the tax preparation process and helps identify those tax changes that may affect their return.

The IRS works with the Free File Alliance each year to ensure that taxpayers have more choices for free federal and state returns. Several offer both free federal and free state options. Each of the 12 Free File providers sets different criteria for use of their product, generally based on income, age or state residency. However, taxpayers with an AGI of $64,000 or less last year will find at least one product they can use.

To make it easier to find the right Free File product, taxpayers should use Free File Software Lookup tool. Taxpayers can just enter some information and let the tool find the products that match their situation.

For 2017, active duty military personnel with incomes of $64,000 or less may use any Free File software product of their choice without regard to the criteria.

It should be noted that the IRS, by law, must hold all refunds that contain an EITC or ACTC benefit until February 15 — time to ensure that the claims are accurate. Taxpayers should file as they normally would, and taxpayers should file electronically and use direct deposit. Refunds with EITC or ACTC may not be deposited into accounts until the week of Feb. 27. Learn more at Refund Timing for Earned Income Tax Credit and Additional Child Tax Credit Filers.

Free File also can help taxpayers with their health care law requirements. Taxpayers must report their health care coverage or their return will not be accepted by the IRS. For each month in 2016, taxpayers and everyone on their return must:

  • Report health care coverage, or
  • Claim an exemption from coverage, or
  • Report a shared responsibility payment

Most people will simply have to check a box to report health care coverage for the entire year.

Free File makes all versions of the Form 1040 available for free  the Form 1040, Form 1040A and Form 1040EZ and their related schedules. All Free File forms are available throughout the filing season, not just for a limited time.

Additionally, state tax return offers are at the discretion of the providers. Some providers also offer state tax return preparation for a fee. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming do not have an income tax. Taxpayers living in those states only need Free File’s federal tax products.