Free tax filing has confused many Americans. Here's help.
The majority of individual taxpayers in the U.S. are eligible to file their taxes for free, yet many may be unaware or confused by how to do so.
The tax industry and the IRS have played a part in the problem. Together they run the IRS Free File system, which about 70 percent of taxpayers are eligible for but only a sliver use. It was designed to help low- and middle-income taxpayers find reliablylings.their t xes aHowever, the IRS has long faced criticism for its failurebeene and suzedort tfailing And recent media reports uncovered efforts by the tax software preparation industry to misguide users of Free File and nudge them into paid products.
Subsequently, improvements have been made and Free File should be easier to use in 2020. But, with tax season getting into full gear, users should know the details of the service and the alternatives.
WHAT IS FREE FILE?
The IRS Free File program allows taxpayers whose adjusted gross income is $69,000 or less to file for free. Tax software prep companies administer Free File via a partnership with the IRS. This year, taxpayers have their choice of 10 providers, including well-known names such as TurboTax, H&R Block and TaxSlayer.
Free File has been available since 2003; but while roughly 70% of taxpayers are eligible, only about 2% use the program, according to the National Taxpayer Advocate’s Office.
WHY THE LIMITED APPEAL?
Critics say the program is confusing and difficult to use. The process taxpayers must follow is “obscure and complex,” according to a report released earlier this month by the Treasury Inspector General for Tax Administration.
The program is also poorly promoted. The IRS has not allocated any money to advertise Free File since 2014, although the agency does promote it on its website, social media...
