Free Tax-Filing Availability Shrinks; Savings Still Possible

Here's a piece from USA Today that says free tax-filing availability shrinks. The details:

The IRS Free File program, which is intended to encourage taxpayers to file their taxes electronically, is no longer free for everyone. The partnership between the IRS and about 20 private tax preparers allows eligible taxpayers to prepare and e-file their federal tax returns for free. But this year, the program is limited to taxpayers with an adjusted gross income of $50,000 or less. That's a big change from 2005, when several tax preparers, including software giants TurboTax and H&R Block, made their Free File programs available to all taxpayers.

More than 5 million taxpayers filed returns through Free File last year. All told, more than 68 million tax returns — about 52% of all returns — were filed electronically in 2005.

The piece then goes on to offer some ways you can save when filing your taxes:

• Prepare and file online.
• Buy only what you need.
• Keep it simple.
• Look for discounts.

Well, all good things must come to an end, I guess. So much for free filing.

But there are some good tips in this piece, so use those that apply to you. And if you want/need more information on tax-related issues, see these links:

• Eight Ways to Avoid an Audit
• Tax Law Changes You'll Need to Consider for 2005 Income Tax Returns
• 3 Keys to Choosing the Best Tax Pro
• Five Common Tax Filing Mistakes

For tax planning and filing, FMF Recommends: H&R Block.  Do it yourself or have us do it.  It's never been easier.

Comments

[David Farrior]

This site is a completely free e-file (as long as you don't follow any of the "upgrade" links) that doesn't limit by any agi amount. It has a very intuitive UI, and checked for any potential errors (it definitely worked out well, as I received my direct deposit today).

[RS]

I don't understand the govt's thoughts here. I can just send my taxes in the mail for free or I can pay to file them electronically. I would assume that it is cheaper and easier for the IRS to just get the returns electronically than to get them in the mail and have someone input the numbers into a computer (is that how it works?). I would think that they would want everyone to file electronically...so are they just trying to make a few extra bucks off of us?

[Digger]

I agree RS, a total waste of taxpayers money continuing to hire people to take a paper return and load it into an electronic system, which is what I assume happens anyway.

They should be reducing their expenses at the IRS not increasing them and one way would be to bypass the "middleman" who enters it into the system or feeds it into a machine reader or whatever.

Cheaper to write software once than it is to continuously pay human hands year after year.