Five Ways to File Your Taxes for Free

Feb. 26, 2009 — -- Americans spend more than $7 billion a year on preparing their taxes, but most people don't actually have to shell out all that money. Chances are you qualify for some kind of free tax help.

"Good Morning America" financial contributor Mellody Hobson offers five ways to get your taxes done for free.

Free Software From the IRS

The typical American spends $200 a year filing basic federal tax forms, but 70 percent of all taxpayers -- that's 98 million people -- are eligible for the Internal Revenue Service's free tax-filing software program. If you have an adjusted gross income of less than $56,000 you can take advantage of the program.

The IRS has partnered with private tax software companies and offers about 20 different programs. More than 24 million people have used the service, and all you need to do is go to the IRS Web site to get the information. Keep in mind, though, that these are e-filing software packages, so you will need to file online.

Click here to link to the IRS free e-file Web site.

Volunteer Tax Assistance Programs

If you're filing a basic return, there's a good chance the IRS can help you find a free tax preparation assistance program. For instance, the IRS sponsors a program called the Volunteer Income Tax Assistance Program, which can help people making less than $42,000 a year file basic income tax returns.

The program is staffed by certified volunteers who have training on basic returns, so they won't be able to prepare a more complicated return, but they can help you with a straightforward one.

You can also call your local city hall and state treasurer's office to see if there are other programs in your area. But keep in mind that workers at these free filing services have different types of training and certification, so do your research before selecting one. And again, most of these services are only equipped to handle basic tax returns.

AARP Offers Seniors Free Tax Counseling

Older Americans represent a large portion of taxpayers -- 52 million Americans are over the age of 60. The IRS has partnered with the American Association of Retired Persons to offer a program called Tax Counseling for the Elderly.

The program uses trained volunteers to provide free, basic tax counseling and filing assistance. There are 7,000 sites across the country during tax season, and any American over 60 and who is low- to middle-income is eligible.