Do Your Taxes for Free: Simplifying Tax Filing

Filing taxes need not be a daunting or costly process. Many people do not realize that they can file their taxes for free, saving money while gaining essential financial knowledge in the process.

There are several ways to do this, ranging from using free software programs and services, filing directly with the Internal Revenue Service (IRS), or obtaining help from volunteer programs. Here’s all you need to know about how to reduce costs and file your taxes for free.

Free Software Programs and Services

One of the simplest ways to file your taxes without it costing anything is through free tax software programs. These tools assist you in filling out your tax return by guiding you step by step through the process, helping you claim all possible deductions and credits. Companies like TurboTax, H&R Block, and TaxSlayer, among others, offer free versions of their software for those who qualify.

Filing Directly with the IRS

Another approach to file your taxes for free is straight through the IRS’s website. The IRS Free File program is available to taxpayers who make below a certain income level. The program offers two sections: the Free File Software for those with an adjusted gross income of $72,000 or less, and the Free File Fillable Forms for anyone, regardless of income.

Volunteer Assistance Programs

If you prefer to have someone assist you with your tax preparation, look into free volunteer programs. The IRS also sponsors two volunteer programs for free tax help. There’s the Volunteer Income Tax Assistance (VITA) program for those making $57,000 or less, the elderly, the disabled, and limited English-speaking taxpayers. Additionally, the Tax Counseling for the Elderly (TCE) program specializes in issues relevant to retirees.

Another advantage of using these services is that they are often staffed by volunteers who have been trained in tax law and tax preparation, so you can be confident in the quality of the help you receive.

Foreign Personal Holding Company Income

There are also specific considerations when it comes to taxes involving foreign personal holdings. If this applies, understanding your foreign personal holding company income is vital. This income involves certain types of foreign-sourced revenue, such as dividends or interest. To avoid potential tax issues or penalties, you may need to disclose this income on your taxes. It can be complex, so it may be worth consulting with a professional in this area if you’re unsure.

Free filing does indeed cover foreign income as well. The same rules apply for declaring income domestically apply to the declaration of foreign-sourced income. Instructions and help for this can also be found on the IRS website or through free tax software.

Conclusion

Filing your taxes for free is an accessible and straightforward process for many taxpayers. Whether you decide to use free software, file directly with the IRS, or seek help from volunteer programs, you can ensure that you pay nothing to file your taxes. Just remember to account for specific income types, such as foreign personal holding company income, to avoid any unwanted surprises. Take control of your taxes, save money, and enhance your financial literacy by leveraging the freely available tax resources and services today.