PHOENIX ― The Internal Revenue Service and Free File Alliance last weel announced the launch of Free File with many changes and updates for 2016, including more free state tax return options and easier Form W-2 imports.
For 2016, there are 13 brand-name tax software providers making their federal tax return products available for free. Taxpayers whose adjusted gross income was $62,000 or less during 2015 are eligible for at least one, if not more, of the 13 tax software products. The income limitation is $2,000 higher than last year. People can use Free File software immediately but e-filed returns will not be transmitted to the IRS until Tuesday, Jan. 19, when the filing season officially begins.
For taxpayers who earned more than $62,000, there’s Free File Fillable Forms, the electronic version of IRS paper forms. Free File Fillable Forms will be available by Jan. 19.
“You don’t have to be an expert on taxes. Free File software can help walk you through the steps and help you get it right,” John A. Koskinen, IRS Commissioner said. “For 13 years, this partnership between the IRS and the Free File Alliance has helped taxpayers. The real winner in this partnership has been the nation’s taxpayers.”
Tim Hugo, executive director of the Free File Alliance, said, “We are proud to once again offer the industry’s most innovative and secure tax software at no cost to 70 percent of American taxpayers. Tax time can be stressful, but Free File makes step-by-step help accessible to everyone making $62,000 or less. IRS.gov/FreeFile is the one place where taxpayers can choose from a variety of industry-leading tax software options in order to prepare and e-file their federal tax returns at absolutely no cost.”
Free File is available only at IRS.gov/FreeFile. Since 2003, more than 46 million people have used Free File, saving nearly $1.4 billion based on a conservative $30-fee estimate.
The Free File Alliance and its members also are active participants in the Security Summit Initiative to provide additional identity theft safeguards for tax filing and for the Security Awareness campaign – Taxes. Security. Together. – that encourages taxpayers to take steps to better protect their data.
For 2016, more Free File software providers are offering both free federal and free state tax return preparation for states with income tax requirements. Some providers also are offering state tax return preparation for a fee. State tax return offers are at the discretion of the providers.
Additionally, new for this year, several software providers also are offering the easy importation of Form W-2 information which can help reduce errors.
More than 70 percent of all taxpayers — 100 million people — are eligible for the software products. Each of the 13 companies has its own special offers, generally based on age, income or state residency. Taxpayers can review each company offer or they can use a “Help Me” tool that will find the software for which they are eligible, including which companies offer a free state return.
Free File also can help taxpayers with the new health care requirements. Just as last filing season, almost everyone will need to do something when filing a tax return this year. For each month in 2015, taxpayers and everyone on their return must:
- Report health care coverage, or
- Claim an exemption from coverage or
- Make a shared responsibility payment with their tax return.
Most people will simply have to check a box to report health care coverage for the entire year.
If a taxpayer or anyone on their return purchased coverage from the Health Insurance Marketplace, they may be eligible for the premium tax credit. If they opted for any advance payments of the premium tax credit to help with their monthly insurance premium payments, they must file a tax return, even if they were not required to file.
Taxpayers must reconcile their advance payments with the amount they were due. Learn more at IRS.gov/aca.
Taxpayers have the option to prepare their return at any time and schedule a tax payment as late as the tax deadline, which, for 2016, is April 18. Taxpayers who cannot meet the April 18 tax filing deadline can also use Free File to file a six-month extension.
Remember, the fastest way to get your refund is through e-file and direct deposit (https://www.irs.gov/). Direct deposit is fast, safe and easy. Just have your routing number and account number handy. Nine out of 10 taxpayers will receive their refunds within 21 days.
For 2016, Free File can also help taxpayers with myRA (https://myra.gov/) a new, free, retirement savings account from the Treasury Department. Taxpayers who have a myRA account may use Free File to deposit their tax refund or a portion of their refund into their myRA account. Just use Form 8888 or follow your software product’s instructions.