The Internal Revenue Service (IRS) announced that the 2024 tax filing season has officially begun. This is when the IRS will begin accepting and processing 2023 tax returns. The IRS expects more than 128 million individual tax returns to be filed between Jan. 29 and this year’s tax deadline, April 15, 2024.
The IRS will make it available to process your tax return starting on Jan. 29, and that means you can begin working on your taxes now. And since the IRS has an interest in making sure everyone files their tax return on time, they also announced that the IRS Free File program will be available again this year.
If you’re not familiar with the IRS Free File program and how it works, read on to learn the basics. We cover how you can participate, who qualifies, related “fillable forms,” and more.
Related: IRS Erases $1 Billion In Back Tax Penalties
What is the IRS Free File Program?
The IRS Free File program is a public-private partnership between the IRS and several well-known tax software companies to assist individual taxpayers prepare their federal tax returns for free. Marking its 22nd filing season, IRS Free File went live earlier this year, on Jan. 12, 2024, more than two weeks before the 2024 filing season start date. The program is geared toward providing free guided tax preparation services.
To participate in the program, your income must be below a certain amount. Specifically, your adjusted gross income (AGI) must be $79,000 or less. The income threshold applies to all tax filing statuses.
WealthUp Tip: AGI is a metric the IRS uses to measure your gross income (including your wages, dividends, capital gains, business income, retirement distributions, and other income), less any adjustments to your income (e.g., deductions for educator expenses, student loan interest, alimony payments, or contributions to a retirement account). Your AGI will never be larger than your gross income.
How Does the IRS Free File Program Work?
With the IRS Free File program, you can select a tax software product from one of several companies to prepare your federal return. One catch: You might need to pay for your state return, depending on the software package you choose. Fortunately, over 20 state tax returns were available as part of the Free File program last year.
Additionally, financial banking products can’t be offered as part of the experience. For example, if you need a refund advance, you need to apply for it through one of the paid tax software programs.
In other words, it’s a program that allows you to use pre-selected existing tax software programs to file your federal return for free if you meet the $79,000 AGI criteria, but you may need to pay to prepare a state or local return or if you’re looking for any financial banking products.
IRS Free File Fillable Forms
As part of the Free File program, the IRS also offers Free File Fillable Forms. With these online tax forms, you have the ability to do your federal returns by yourself, without needing to meet an AGI threshold.
There are some downsides, though. For instance, there’s no step-by-step guidance and only basic calculations are handled by the program. The Free File Fillable Forms don’t include state or local tax forms, either. You also won’t be able to make changes once you submit a form.
What Can the IRS Free File and Free Fillable Forms Do?
The IRS Free File program handles all federal tax situations for free if your AGI is $79,000 or less.
With Free File Fillable Forms, there are no income limits to do your own tax return. However, you need to know your way around the tax code, since there’s no guidance to help with tax questions. You will also need to find any applicable state and local tax forms yourself.
Related: Child Tax Credit FAQs [What Every Parent Needs to Know]
What Can’t the IRS Free File and Free Fillable Forms Do?
The IRS Free File program handles all federal tax situations, but you’ll have to pay for state tax return preparation if you select certain tax software programs.
There are no limitations on Free File Fillable Forms for your federal income tax return, but you will need to find any applicable state and local tax forms yourself as well.
Related: New 1099-K Threshold Delayed (Again): How Are You Impacted?
How to Participate in the IRS Free File Program
To take advantage of the Free File program, you’ll need to follow these steps, per the IRS:
- You must begin your filing option at IRS.gov. (Don’t go directly to a company’s website as this will prevent you from receiving the benefits offered by the Free file program.)
- Choose an IRS Free File option—guided tax preparation or Free File Fillable Forms.
- You will be directed to the IRS partner’s website to create a new account or, if you are a previous user, log in to an existing account.
- Prepare and e-file your federal tax return.
- Receive an email when the IRS has accepted your return.
Should I Use the IRS Free File Program?
If your AGI is $79,000 or less, using the IRS Free File program can be a smart choice. At the very least, you’ll get to file your federal tax return for free …and who doesn’t like free stuff?
The ability to file your state tax return with the program is an added bonus (even if you have to pay for it). It’s generally easier to use the same program to file your state return if that’s an option.
If your AGI is above the $79,000 threshold, only use the Free File Fillable Forms if you’re comfortable completing your tax return with minimal guidance. You’ll have access to the IRS form instructions and official publications, but that’s not the same as having a commercial tax software product walk you through your return.
