Five Ways to File Your Taxes for Free
The IRS offers many options to get free tax preparation help.
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.
Military Offers Personnel Free Filing
The military probably has the best free tax help program, and it's available worldwide to all armed forces personnel and their families. That's 1.4 million active duty members, and 850,000 reservists. They can receive free tax help, including tax filing, at offices within their installations, where all types of filings, even the most complex, can be handled. As an added bonus, these offices are equipped to file taxes electronically.
And for all the brave men and women in combat zones and serving oversees, the IRS automatically extends all deadlines for filing returns, paying taxes and filing refund claims -- and most other federal tax-related issues -- for at least 180 days after the last day of combat or overseas service. That also applies for military personnel injured in a combat zone.
Free IRS Phone or Walk-in Help
You can always get free tax assistance from the IRS. You can call the IRS with specific questions, and most IRS offices are open to handle walk-in questions about tax preparation. IRS workers can help you with even the most complicated tax questions.
Also, if you're part of a group that has common tax interests, like a small business owners group, you can request that the IRS conduct a free seminar at a location and time that you specify. The seminars are usually conducted by IRS employees or trained volunteers.
Who Should Seek Advice From Paid Tax Preparer?
If you have numerous itemized deductions or you owe back taxes or if you're on a payment plan, you should strongly consider going to a tax professional or tax preparation business like H&R Block. They are better equipped to handle complicated tax returns.
Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com. Amar Parikh contributed to this report.