WASHINGTON – Most taxpayers can prepare and file their taxes cost-free this season with an online initiative the Bush administration announced Thursday.
“Simply paying taxes is burden enough without the extra costs in time and professional help that too many Americans have endured until now,” said Mitchell Daniels Jr., the White House’s budget chief.
The Free File government partnership with 17 private tax software companies makes a range of software available on the Internet to at least 60 percent of taxpayers, or 78 million people, from January through the April 15 deadline each year.
The program is aimed at those who prepare their own taxes and still file paper returns. Last filing season, the Internal Revenue Service received nearly 85 million paper returns and nearly 47 million electronically filed returns. The IRS expects 54 million to file electronically this year.
The IRS has posted the companies participating in the Free File Alliance on the Internet at www.irs.gov and www.firstgov.gov. Online preparation for taxpayers who qualify will be provided at no charge. Refunds generally will be received within 10 days if forms were filed electronically requesting direct deposit.
“E-file is quicker. E-file is more accurate,” said IRS Acting Commissioner Robert Wenzel. “E-file is the best way to confirm the IRS received your return, and it’s the fastest route to a refund.”
The 17 companies participating get a “stable marketplace” that keeps the government from “assuming the awkward role of tax preparer and auditor,” said Michael Cavanaugh, manager of the alliance. The government won’t venture into the tax software business as a result of the agreement.
Companies participating have their own eligibility requirements. Generally, eligibility will be based on factors such as age, adjusted gross income, state residency, military status or eligibility to file a Form 1040EZ or for the Earned Income Tax Credit.
Taxpayers can determine their eligibility using an online questionnaire at the Free File Internet site that will help identify free services for which they may qualify. Not all taxpayers will be eligible for free services.
Eligible taxpayers can link directly to a participating company’s free service website and prepare returns using the proprietary software. Completed returns will be sent electronically from the company to the IRS through secure phone lines. Taxpayers then will receive a confirmation that the file was received or rejected.
People wanting to file electronically can do so if they owe taxes and pay later. Taxes can be paid electronically by authorizing funds withdrawal from a checking or savings account or credit card, or taxpayers can mail a check to the IRS by April 15.