Free File Program Explained

The Free File Program is service offered directly through the IRS to help qualified taxpayers prepare and electronically file their federal income taxes. The IRS has partnered with the Free File Alliance, which is a group of private sector tax software companies, to make this service available. The program offers 19 companies with whom you can utilize tax preparation software for free.

The program was first introduced in 2003 and according to the Free File Alliance website, about 30 million Americans have used Free File to help them file their taxes. Free File is available 24 hours a day, seven days a week and the software is updated constantly to give American taxpayers the most up-to-date information to complete returns accurately. It allows taxpayers to receive refunds in half the time.

Every federal tax return is transmitted through a secure IRS e-file system and is completely safe. After each return is transmitted to the IRS, a confirmation email is sent to let the taxpayer know that his or her return was accepted.

The program currently has two options. There is the Traditional Free File with a software provider and then there is the Free File Fillable Forms. The latter doesn't necessarily walk you through preparing income taxes while holding your hand, but they do present the IRS tax forms you need on-screen to be filled in online. Most of the math will need to be done by you the taxpayer, but the advantage associated with this filing option is that it is free to anyone regardless of their filing status, unlike using software provided by a Free File Alliance partner, which the filer must qualify for (see qualifications here).

The Traditional Free File option has step-by-step help for completing the income tax filing process. Using this option, you able to access a free tax software title through the IRS website and thereby avoid being charged for your return. You will see a notice that you are leaving the IRS website. The eligibility requirements for filing with this option change from year-to-year and, in some cases, from software provider to software provider.

Either way you choose, if you use to Free File there is a chance that the state filing may not be free of charge. Only 21 states have currently established free filing programs and these state programs have no affiliation with the national partnership between the IRS and the Free File Alliance.