There aren’t too many things for free these days, and when it comes to taxes, most of us think about what we pay out, not necessarily what we save.
Nevertheless, when it comes to your 2012 tax return, the IRS wants you to know that for many, free preparation and electronic filing are available.
Here are five things you may not know about the IRS Free File program.
Your income must be less than $57,000
Free File is a program under the oversight of the IRS, but they partner with reputable tax preparation companies to provide the service. All of the providers have the same standard income criteria – Your Adjusted Gross Income (AGI) must be less than $57,000.
AGI is defined by the total of all your income sources, minus adjustments such as certain business expenses, moving expenses, alimony paid, IRA deductions, student loan interest paid, etc. So don’t rule yourself out just because your gross income tops the $57,000 mark. Check to see if certain adjustments may bring you into the criteria.
The $57,000 AGI applies equally to both individual and married filers.
Start your search at IRS.gov
Although the IRS collaborates with companies like TurboTax or H&R Block, be sure to start the Free File process by using the link off the IRS home page. You will then be directed to the appropriate area on the company’s web site. Otherwise, you may end up self-directing yourself to the wrong spot.
Review each company’s products
There are a few different ways to do this. If you are on the IRS Free File page, select the ‘Pick a Free File Company’ link on the right side. You will have the opportunity to review about 15 companies and a brief description as to what each one provides.
Companies’ offers may differ. For example, some companies will charge a fee to prepare your state tax return along with the free federal return. Others may not support all of the forms you need to file.
Alternatively, while on the page that lists all of the companies, select the option to ‘Help Me Find A Free File Company.’ After answering a series of questions, you will be paired with the best possible company.
File an extension via Free File
What if you are not ready to file your return, but you want to file an extension?
No worries. Free File can also be used to submit an automatic 6-month extension request by using Form 4868. Most companies will offer this option.
Remember, an extension to file is not an extension to pay. The IRS still expects any payment due to be made by the 15 of April. Failure to do so may result in penalty and interest charges. For that reason, better to overestimate what you may owe.
Make payment via Free File
Free file is not just for the preparation and electronic filing of your return. You can also easily make payment of any tax balance that you may owe. Through each Free File company, you will have an option to make electronic payment via an electronic funds withdrawal (direct debit), credit or debit card. If you prefer to send check or money order, you will be given instructions on how to do so.