December 27, 2024
Tax season is nearly here! With the Tuesday, April 17th deadline quickly approaching, you might be wondering about the best free tax software options. Here we’ll cover 5 of the most popular choices and discuss their pros and cons.
Let’s start by walking through the basics of filing a tax return.
Tax filing basics
Many Americans are required to file a federal income tax return. Federal tax law is enforced by the IRS, which provides a quick questionnaire to help determine if you need to file a return this year. Whether you’re required to file a federal income tax return generally depends on a combination of your filing status, age and income.
State income taxes are separate from federal income taxes and vary depending on where you live and work. Many people need to file both federal and state income tax returns each year.
The overarching goal of the filing process—on both the state and federal level—is to make sure you’ve paid enough in income taxes. If you overpaid last year, the filing helps you get a refund, and if you underpaid, the filing determines how much you owe.
Ways to file your tax returns
Some people choose to go directly to the forms and navigate the math on their own with minimal guidance. Many IRS forms are available in “fillable” format for free, and there’s no charge to file your forms electronically directly on the IRS site or send them in via mail. Many states also offer free e-filing options. The forms come with line-by-line instructions—but for many, these instructions aren’t much help and can be quite confusing.
That’s why nearly half of taxpayers who filed federal income taxes in 2016 relied on tax software for extra help preparing their taxes, according to Nerd Wallet. Tax software is designed to ask you easy-to-answer questions, facilitate more accurate returns and simplify the process altogether.
Free tax software: 5 popular options
Getting extra help from tax preparation software doesn’t need to cost you any money. There are several popular software options that are completely free; however, not all filers are eligible for the free versions. If you’re self-employed or have income from a rental property, for example, you’ll likely have to pay for a software package.
Check out these 5 great options for free tax filing software:
Bonus tip: Free budget tools
Whether you’re expecting to receive a refund or planning to make a payment, free budget tools can be an important part of your tax preparation toolkit. Check out this rundown of the best financial apps—including PocketGuard and Prism—and this compilation of free budget spreadsheets from Vertex42 and PearBudget.
RISE is also here to help you build better money habits. Check out our collection of free, interactive tools for setting savings goals and managing debt.
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