Welcome to WCS Money Tutorials. Today's topic is how to file your state and federal taxes for free
using the IRS Free File program. The IRS offers 3 types of free
help for filing your taxes. The IRS's Volunteer Income Tax Assistance provides trained volunteers
to help you file your state and federal taxes. The IRS also has a Free File program where you
can use software from a tax preparation company who has agreed to provide the software free of
charge for taxpayers who qualify. Your AGI must not exceed $73,000. If your income is higher,
then you can use the Free File Fillable Forms, which has no income limit. This is filling out
electronic versions of paper forms. It does not offer tax guidance and it has some limitations.
I have videos on all these types of help, but this video will focus on the IRS Free
File Online Program. Check out my other videos for the other types of free help.
Before you begin filing your taxes you should make sure that you have all your documents available,
including all tax documents that you received in the mail. This page represents the most common
items that you will need, but you may need others depending on your particular situation.
You will also need information on anyone that you are claiming as a dependent.
Keep a few points in mind when selecting a provider. Not all of them offer a free
state tax return or their free offers are restricted to certain states.
Never go directly to the tax company's website. Always select the company from the IRS's website
to ensure that they must follow the IRS rules. They may not charge you a fee for their service
nor can they ask you to buy a product or service from them, but any state
tax preparation or other fee must be disclosed on the provider's IRS Free File landing page.
You also cannot use the Free File program to file for a prior tax year or to file an amended return.
To start, go to this URL
or just search for “IRS free file”. Make sure you do not click on any advertisements.
So, click on the link to the free file page, then click on Choose an IRS Free File Offer.
On the left side of the screen, there are short instructions on how to find your best option and
what you will need. On the right side, there are 2 filters that you can use to narrow your
choice of companies. We will start by looking at the second option, the Start Lookup Tool.
Notice that there are 4 steps at the top, each step being a separate page.
The active page is in a slightly darker color, as you can see for the round button for step 1.
As you enter additional information, you'll see that additional boxes or options will pop
up, depending on what you entered. Click the NEXT button to go to the next page.
Notice that most of the items have a question mark beside them.
Just click the question mark to show help for that item, or you can click the X to close it again.
Or you could just leave it open and continue to enter your information.
Some information may require multiple boxes. For instance, if you had more than 1 job,
then you can enter the amount for that job, then click ADD ANOTHER to add a second job.
Look at each option and make sure to add all the relevant information.
There is a second section for Adjustments to Income, which lowers your AGI.
For instance, if you add student loan interest, then you enter that amount,
and that reduces your AGI by the amount. Notice at the bottom that it shows your total AGI.
Click NEXT to go to the next page. Notice that as you complete each page,
the top button for that page is checked, and there is a link to that page to go back to it,
but the current page has a darker color with no link.
Continue entering information for the earned income credit, then click NEXT to see the results.
Notice on the results page that your information is summarized in the left box on the left-hand
side of the screen, but you can easily go back to prior pages by clicking on the appropriate link
to change any information that you would like to change. Just click the results button to go back.
You can see the results more clearly by clicking the left and right arrows.
When you want to select an offer just click VIEW THIS OFFER.
The provider's landing page should list the
qualifications necessary to use their service for free. It may also include state qualifications,
and then, if you don't qualify, it tells you how much it will cost.
So, the federal return here will cost $17.95, and the state return costs $36.95.
The pages should also include additional help.
Another way to filter the list is to select BROWSE ALL.
This will take you to a list of available companies, but it also has a quick filter
form at the top of the page that can narrow down the possibilities.
Just enter a few pieces of information,
then click apply. This filters the list to those companies that satisfy your criteria.
It also displays the number of offers available that satisfy your criteria.
You can display additional help by clicking on the question mark.
You can close it again by clicking the x. Reset the filter by clicking this link.
These are the available companies for the 2022 filing season.
Freeze the video if you want to examine them in more detail.
Beware of the lower AGI limit trap. All the providers have an upper AGI limit but some of
them also have a lower limit. This is important to note because, if after figuring your taxes,
your AGI falls below the lower limit, then the tax company may charge you to prepare your return
or force you to start over with another provider. Because the tax code provides
various adjustments to income that lower AGI, your AGI may turn out to be less than what you thought.
One way to verify, if your tax situation has not changed much since last year,
is to look at last year's tax return. If you are not sure whether your AGI
will be less than the lower limit, then pick a company without a lower limit.
Although some offers do not include a free state tax return some of the offers are
also restricted for certain states for the federal tax return, so keep note of that.
Some of these offers show their URL. By selecting the provider at the IRS website,
the provider must follow the IRS Free File rules. If you go directly to the provider's website,
then they do not have to follow the rules, so they may charge you to prepare your tax return.
So do not go directly to their website. Only click on the VIEW THIS OFFER box to go to their site.
Remember the landing page should restate what the requirements are, and you should verify
that you satisfy those requirements. The landing page should also show how much their services cost
if you do not qualify, and they should also provide a link back to the Free File service.
Thank you very much for your time. If you liked my video, please give me a thumbs up
and subscribe. I would appreciate any suggestions, so please leave them in the comments below.
Check out my website at https://thisMatter.com for more than 850 in-depth fundamental tutorials
on personal finance, investments, and economics. Check out my books on money
at https://WilliamSpaulding.com. Thank you.