Due to a combination of owning a corporation, moving mid-year, and all the residency and payroll rules attached to assigning incomes between states, we are hiring a CPA this year. This MSN Money article says that 62% of Americans pay a professional to do their taxes. I’m actually surprised by this number, as I think most people can get by just fine by using current tax software. I’ve certainly been happy to do so for the last decade.
Below are several free ways to get your taxes done, besides of course using old pen n’ paper. As you’ll see, for just about everyone there is at least one option for completely free Federal filing with E-file. And even if you add in State, it shouldn’t cost more than $14 with E-file.
IRS Free File – Income Restricted
If your 2008 adjusted gross income of $56,000 or less, there are a variety of options from 20 different software companies available from the Free File Alliance at IRS.gov.
Free File Fillable Tax Forms [IRS]
If you already know which tax forms you need to fill out, the IRS now lets you fill them out electronically and file them electronically for free. This is not the same as the income-restricted “Free File” above. Via Consumerist.
You can use the TurboTax Federal Free Edition if you have a simple tax return, for example one that only requires the 1040EZ return with no itemized deductions. State is $25.95.
If you have a corporation, partnership, or multi-member LLC and think you can handle it yourself, you can get TurboTax Business for Federal filing free with Federal E-file included.
H&R Block TaxCut
The free version of TaxCut is also restricted to those with simple returns.
Not quite free, but you can also get TaxCut standard for Federal for $1 with free Federal E-file at Dollar Tree stores. It has no income restrictions and handles itemized deductions. State return is the upsell, at $29.99 extra (see below for more options).
Competing well with the big boys is TaxACT, which offers a free federal return for everyone with no restrictions, with free Federal E-file included. State return is $13.95 with E-file included.
The TaxACT “Ultimate” Bundle is $16.95, includes data importing, and the state return. However, there is a returning customer’s offer that gives you 30% off, bringing the total cost to $11.90. The link does not appear to actually discriminate between new and returning customers.
State Income Taxes
Many states also offer their own online income tax filing programs. I don’t have time to compile all the links this year, but use this old list as a starting point, or just Google your own state’s tax website. In many cases, filing a state return manually is not very difficult.