Factors that Affect Your Ability to File Your Taxes for Free



Like many taxpayers, you may wonder what it is going to cost you to file your taxes this year. The expense associated with filing a return can depend on a number of different factors. You may be able to anticipate your own expenses by knowing what circumstances most commonly affect taxpayers' tax filing costs.


Filing for Free

If you are filing a relatively straightforward 1040A return, you may not have to pay very much, if anything at all. People who make less than $40,000 a year, are unmarried, and have no dependents or deductions to claim can typically use on the filing programs found online to file their returns for free.

Some of the more popular tax filing programs found on the Internet include:

  • IRS Free File
  • Tax Act
  • H&R Block
  • Turbo Tax
These programs all allow people with simple returns to file their federal taxes for free. You may have to pay a minimal cost to file your state taxes, however. The cost for state returns varies per state.

If your return is a bit more complex, you may want to use an upgraded version of one of these online programs. You also can purchase these programs' software in stores, which can be helpful if you:

  • Are married
  • Plan to claim deductions
  • Are eligible for the Earned Income Tax Credit
  • Have investments, mortgage interest, retirement contributions, and other expenses to claim

The programs that you can find online or in stores are simple to use and allow you to file your taxes for very little, if any expense at all.


Factors that Impact Filing Costs

While people with simple, straightforward returns enjoy filing for free, other people who experience more complicated tax filing situations may face paying higher costs to submit their taxes to the IRS. People who freelance, for example, typically cannot file for free because they must submit a Schedule C to claim their income.

Freelancers also routinely claim expenses that relate to running their own businesses. Because their returns are more in-depth and complicated, they are not eligible to use the free filing programs on the market.

Likewise, returns that require extensive collection of paperwork and receipts often cost more to file than simple returns. If you must compile and submit dozens of receipts and other documentation, your CPA or tax filing company may charge you more because of the work involved with submitting your return.

Another factor that can impact your final filing cost involves where you live. CPAs and tax filing services in some parts of the country charge more than accountants and tax companies on other parts of the U.S. If you live in a major metro area, for example, you may pay more than someone who lives in a smaller, more rural town.

Finally, filing late can raise the cost of submitting your returns to the IRS. CPAs and tax preparers experience a rush in customers during mid to late-March and early April. If you wait to file your taxes until the last minute, you can expect to be charged more for a tax preparer's services, particularly if your return is lengthy and complicated.

Given that, you may find it best to file your taxes early and use one of the tax filing programs found online. If your return does require more review and effort, you likewise can keep your costs low by allowing a tax professional to help you compile and submit your taxes. Using a professional tax service can be especially important if you must file a Schedule C or if you plan on claiming deductions and exemptions on your return.

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