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Most Taxpayers Qualify for IRS Free File. Here’s How to Use It
By Adam Hardy MONEY RESEARCH COLLECTIVE
The new income limit for IRS Free File is $5,000 higher than last year, marking one of the largest annual increases in the program’s history.
The IRS is continuing the trend of expanding eligibility for its long-standing free tax filing partnership program.
IRS Free File is entering its 24th year this tax season, offering millions of Americans access to free guided tax-prep services. This year, anyone with an adjusted gross income (AGI) up to $89,000 can e-file their federal income taxes at no cost.
The new AGI limit marks a $5,000 jump from last year and is one of the largest annual increases in the program’s history. The threshold typically rises between $1,000 or $2,000 in a given year, if it changes at all. The past few years, however, the IRS has made major expansions between $5,000 and $6,000, meaning many Americans are getting access for the first time.
Now, more than 70% of taxpayers qualify for IRS Free File, according to Free File Alliance, a coalition of tax-prep companies that partner with the IRS. Despite broad availability, Free File remains underutilized, with fewer than 3% of taxpayers using the service each year.
“There’s a common misconception that Free File only supports very simple returns,” Tim Hugo, executive director of the Free File Alliance, said in a news release. “In reality, many taxpayers with more complicated returns can still file for free.”
For instance, Hugo said small business owners, gig workers and landlords with multiple rental properties qualify as long as they fall beneath the AGI limit.
(Note: IRS Free File is separate from the agency’s shuttered “Direct File” pilot program that tested federally-run tax filing software.)
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How to use IRS Free File
This year, eight companies are offering their guided tax-filing software for free to qualifying taxpayers:
- 1040.com
- 1040Now
- FileYourTaxes.com
- FreeTaxUSA
- OLT.com (OnLine Taxes)
- TaxAct
- TaxSlayer
- ezTaxReturn.com
Some of the partners have their own qualifications, including separate income, military status or age requirements, but taxpayers who meet the overall $89,000 income cap will have at least one option to choose from.
Before you get started, be sure to verify your eligibility, as some options allow you to start filling out your taxes only to tell you at the end that you don’t meet their specific requirements. Full eligibility details are available here, and the IRS site has a tool to help you quickly find a filing option based on your situation.
One major perk of IRS Free File is that the eight partner companies cannot upsell you during the filing process or offer cash advances on anticipated tax refunds: two lucrative and ubiquitous strategies used by tax companies outside of this program.
Once you’ve made your choice, simply follow the prompts and input your information from all your applicable tax forms.
Several of the services also offer free state tax preparation. Depending on the company, some state restrictions apply. But OLT and FreeTaxUSA offer free state filing for all states if you meet the federal requirements.
Other ways to file taxes for free
If you have an AGI above $89,000, you can still technically prepare your taxes through the Free File program, but the process is very different. The IRS offers Free File Fillable Forms to taxpayers of all income levels.
As the name suggests, Fillable Forms must be filled out manually based on the accompanying instructions. The forms offer very little calculation assistance, as you are expected to do the math yourself. An e-filing option is available once all forms are completed digitally. Alternatively, they can be printed, filled out and mailed directly to the IRS.
Folks who don’t qualify for IRS Free File may still have free tax filing options with other companies.
Regardless of income, federal taxes are due April 15 this year. A handful of states have separate deadlines for state returns.
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.