While tax season doesn’t officially kick-off for individuals until January 31, 2014, the Internal Revenue Service has announced that Free File will open as early as January 17, 2014.
Or maybe announced is a bit understated. The IRS is practically begging taxpayers to return to the Free File site on IRS.gov.
Everyone can use one of the Free File options. The most popular – and the one that IRS touts the most – is a free federal income tax prep and electronic filing program for taxpayers with an annual gross income in 2013 of $58,000 or less (yes, the website still says $57,000 but I expect that to change based on statements made by Tim Hugo, executive director of the Free File Alliance). About 70% of all taxpayers file into this category.
The Free File Fillable Forms are online versions of paper tax forms. This option does not offer state tax returns and performs only basic calculations. The Free File Fillable Forms are not income-dependent, which means that all taxpayers can use them.
Both versions are made possible through the Free File Alliance. The Free File Alliance is a nonprofit coalition of industry-leading tax software companies who have partnered with the IRS. The public-private partnership has been around since 2002 and the first returns came out of the program in 2003. Originally, the IRS entered into a three-year agreement with a group of private computer-software companies to provide free electronic filing for at least 60% of all taxpayers who file an individual tax return. The program was renewed for four years in 2005 and an additional five years in 2009. Since the program made its debut, nearly 40 million returns have been filed through the program.
Participating software companies make their products available through the IRS web site. You’ll note that some of the names sound familiar – you’ve seen these companies before. Keep in mind, though, that to qualify to file for free under the partnership, you must use the IRS Free File program: if you click directly to a company’s website, you may be charged a fee.
Even though the program will accept taxpayer submissions beginning on January 17, 2014, two weeks before the season opens, that doesn’t necessarily give you an edge beyond putting you at the start of the line. The IRS has continued to make it clear that they will not begin the actual processing of any form 1040 until January 31.
The IRS says that beginning on January 17, Free File companies will “securely hold your completed tax return until January 31 when the IRS begins accepting returns.” That’s not just true of Free File: that date holds true for all tax preparation services.
