Some Taxpayers can file their returns for free: Here's how

With tax season here, millions of Americans will pay someone to file their taxes, even though they could do it themselves for free.

The IRS offers free tax filing preparation software that about 70% of Americans can use. However, a 2021 U.S. Government Accountability Analysis report found that only 4% of eligible taxpayers use the program.

IRS Free File

Eight commercial online tax preparers are available through the IRS Free File webpage. However, income eligibility varies based on the providers participating in the program.

For example, to file with Free Tax USA for free, Americans must have an adjusted gross income of $45,000 or lower, while 1040Now requires an AGI of $68,000. Some tax preparers offer free state return filing options, while others don’t.

IRS Direct File

Residents in 12 states, including California, can utilize the IRS Direct File program. Direct File is open to tax filers who made $200,000 or less and have simple tax returns. The software can’t process returns with dividend or capital gains income, itemized deductions, or retirement account distributions, according to CNBC.

State tax agencies will also help California residents file their state returns if they utilize the program.

Other options

Taxpayers can also utilize the IRS-sponsored Volunteer Income Tax Assistance program, which offers free in-person tax prep to those who make $64,000 or less, have disabilities, or have limited English speaking abilities.

AARP’s Tax-Aide service is also available to people 50 years old or older, or those with a low to moderate income. Locations are available nationwide.

Active or retired military members and their families can use the Department of Defense free tax preparation software known as MilTax.

Colleges and universities in California also offer free tax preparation services for those within a certain income threshold.