Understanding How to File Income Taxes for Free

Tax season can often be a stressful time, especially for those who are unsure about how to file their paperwork. The good news is that the Internal Revenue Service (IRS) provides multiple resources for individuals who want to file their taxes for free. This is a great opportunity to save some money that would otherwise be spent on tax professionals.

Generally, individuals or families that earned $72,000 or less in the previous year qualify to use free filing software. In addition, you can also choose to file your taxes for free if you feel comfortable preparing your own tax return.

The most important aspect when it comes to filing taxes for free is being aware of the rules and understanding the specific terms associated with income tax returns. One such term that often confuses people is the NIIT tax.

The NIIT tax or Net Investment Income Tax, is an additional 3.8% tax on certain net investment income of individuals, estates and trusts that have an income above the statutory threshold amounts. It’s essential to factor in this aspect when filing your taxes as it might increase your overall tax burden.

There are several options available for people who want to file their taxes for free. Here are a few ways you can do it:

Free File Software

The IRS Free File program provides free federal tax preparation and electronic filing for eligible taxpayers through a partnership with leading tax software providers. Some of these providers also offer free state tax return preparation. To use the Free File software, your adjusted gross income must be $72,000 or less.

Free File Fillable Forms

Free File Fillable Forms are electronic federal tax forms you can fill out and file online for free. If you choose this option, you should know how to prepare your own tax return. These forms are a good option if you are comfortable with the tax law and tax forms and don’t need much tax help.

Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE)

The VITA program offers free tax help to people who generally make $56,000 or less, persons with disabilities and limited English speaking taxpayers who need assistance in preparing their own tax returns. The TCE program offers free tax help for all taxpayers, particularly those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues.

You’d need to remember that while filing taxes is a duty, it needn’t be overbearing on your finances. By leveraging the options mentioned and being aware of the specifics like NIIT tax, you can save some money and curtail stress during the tax season. Happy filing!