The Internal Revenue Service (IRS) has announced that it has reached an agreement with the Free File Alliance that will continue the program and make it better for the 2019 tax filing season. Changes include clear directions to ensure that taxpayers are offered a free service as a primary option and follow-up emails to taxpayers to serve as reminders to file.
The Free File Alliance is a nonprofit coalition of industry-leading tax software companies who partner with the IRS to help taxpayers prepare and e-file their federal tax returns for free. Each year, Free File partners, acting through the Free File Alliance, offer their software free to eligible taxpayers. Currently, those partners are 1040NOW Corp, Drake Enterprises, ezTaxReturn.com, FileYourTaxes, Free Tax Returns, H&R Block, Intuit, Liberty Tax, OnLine Taxes, TaxACT, TaxHawk, and TaxSlayer.
Under the program, any taxpayer earning $66,000 or less can access free commercial software products available by visiting the IRS website. Some providers offer both free federal and free state tax preparation. Active duty military personnel with incomes of $66,000 or less may use any Free File software product of their choice without regard to the criteria.
The program got its start in 2001 as part of the President’s Management Agenda created under the Office of Management and Budget’s (OMB) Quicksilver Task Force. IRS Free File grew out of one of the initiatives established under the program and directed the IRS to provide free and secure online tax return preparation and filing services to taxpayers. The IRS doesn’t provide tax prep on its own, so the agency partnered with the tax software industry. The result was the formation of the Free File Alliance, LLC, which administers the Free File program.
“The Free File program is a great example of a public-private partnership, and it’s been a clear success since its creation 16 years ago,” said IRS Commissioner Chuck Rettig. “But more needs to be done to improve this important program, and these new changes will make Free File stronger and give taxpayers another reason to consider this valuable software option.”
The program officially kicked off in 2003. Since that time, taxpayers have filed more than 53 million free federal tax returns. The IRS estimates this means a savings of more than $1.6 billion to taxpayers, assuming a (very) modest $30 per return preparation fee.
The program also offers Free File Fillable Forms, a fillable version forms 1040 series for those taxpayers who need the forms, not the software. The Fillable Forms assumes that you know (mostly) what you’re doing and only need the basics – and some help with math. It’s available to all taxpayers, no matter your income. The program operates every year from mid to late January until mid-October, which means it’s closed now but will be available again in the 2019 tax filing season.
FreeFile will open when the tax season begins in January 2019. The IRS has not yet announced the specific opening date for the 2019 tax filing season. I’ll post that information as soon as it’s available.