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Free e-filing for 2001 Taxes?
chipperdog asks: "I know this gets asked every year about this time, but
are there any free alternatives for e-filing tax returns? In previous years,
HD Vest offered free filing, but has
discontinued it this year. I can't justify spending more than $10 for filing a
return that I can send through the post office and IRS data entry people for
approx $0.50-0.75. It would be nice if the IRS would just publish a standard
submission format, so open source developers can work with it.."
Nonetheless, what is proposed might be possible. I worked at an govt. agency in 1995/6 that developed a web interface to allow filing of EZ1040's and 1040a's and from some popular tax programs. We tested end-to-end - from a browser and a tax product into IRS's mainframe systems. Total cost was something like $30 million.
The project was killed by Congress, specifically by Congressman Ted Stevens. He used GAO to nitpik the system to dealth on technical details (PKI wasn't really around back then) and rapid development/procurement practices used by the project. The GAO Report is here. But hell, we did it in six months!
I think IRS is still gun shy on the issue.
Here is the IRS's "IRS e-file For Tax Professionals, Software Developers and Transmitters" page.
and here is the "IRS e-file Technical Publications" page which has the e-file file layout spec.
For people whose AGI was under 25000 here. I used it last year and it was great, but it is a large web app so doing it over a 56k could mean a long night downloading instead of looking at tax tables and reciepts.
Read my plan to save the Bengals
This way, whether one prepares his taxes using a software program which then prints out the relevant forms or by filling out forms manually, filing is a simple matter of going to the website, logging in, and typing the data into the forms.
The IRS could then perform a quick check for math errors or other booboos and let the person correct them immediately. If a person is not ready to submit the forms, his information is saved, and the next time he logs in, the forms are restored to the way they were when he was last there. Clicking on the final submit button is equivalent to signing the form and sticking it in the mail.
Seriously, this seems all very do-able to me. The current efiling system where you have to pay someone $50 to do basically the same thing you could do on the web yourself sounds like a scam and a political payoff to the tax accountants.
Sig (appended to the end of comments you post, 120 chars)
I think the nitpicking might have had something to do with the fact that the IRS and the tax preparation and electronic filing/refund anticipation loan people have a symbiotic relationship. And the industry has lobbyists on the hill. A Federal representative at a PKI briefing (back when the Federal government was a bit hotter on the idea) had said that there will never be free electronic filing available to the public, because they are reluctant to put Intuit, HRB, et al, out of business--and that if they feared being put out of business, they would be reluctant to innvotate with Treasury.
Another proud carrier of the $rtbl flag
I found out about itax.com through godaddy, my domain name registrar. I haven't tried the service, but it says "100% free, no gimmicks" on their web site. I've been happy with their domain services so far so you might want to check it out.
Brandon Tallent
Last year, CCRA (Canada Customs and Revenue Agency) allowed all Canadians to file online, or even over the telephone. There was only 1 catch, and that was you needed to use software approved by CCRA.
If I recall, there were a few online offerings that were free for personal use.
Of course, this doesn't really answer your question though. Perhaps I am just bragging? It is actually a pleasant surprise to see our government do something right!
Is that a real poncho? I mean, is that a Mexican poncho or is that a Sears poncho?
E-File is $7.95, paper return is free. Used them this year and they worked ok. Not quite as much hand-holding as you'd get with Tax Act or Turbo Tax, but fine for most tax returns if you're used to filing your own taxes.
But you have to send them your fingerprints to be able to use it. I'm working on an open-source (QingPL) e-filing program. It probably won't be finished until next year without help, but it is available for your examination at http://sourceforge.net/projects/tax/.
is free for ppl under 25k income
You have to adhere to all of the state (and municipal) standards for e-filing. And each one is different. Pathetically, wretchedly different. Some require piggy-backing of the state return to the federal return, some require fed ack before allowing state filing. Some even require ritual sacrifice (maryland).
I work at Intuit, in the back-end e-filing group, not in the consumer division (TurboTax) but for one of the CPA-grade tax products we produce (Lacerte). The stacks of IRS and state reg manuals we implement each year is enough to make you want to...
...charge people for letting them use the system you implemented.
I do believe that there's a web version of TurboTax that lets you skip the software purchase (but still requires the e-file fee). Or you can buy the software (windoze) and get a voucher for a free e-filing). Or you could STEAL the software and use the voucher!
For the last couple of years, I've watched until TaxCut went on a special discount -- you know, the 100% rebate. It's for Windows, but then you get a coupon inside to have your first e-file charge rebated as well...
UserAdvocate: The voice of the user
The software can be downloaded or used over the web.
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If you have just one employeer and no interest or less than 400 in interest and no stocks or bonds or investments, you could probably use a 1040EZ. Other wise you may need a 1040.
Even if you did use turbo tax or one of the other programs you'd have to fill out your w2 forms, and 1099 and any other forms. I'd recomend breaking down and spending the 20 or 30 for Turbo Tax if you have lots of forms especially if you recieved some of those 4000 series forms.
Personally I think the goverment and states should be required at this time to send people forms that do the computations for you. There is no reason that they cannot.
Only 'flamers' flame!
Missouri, the state I live in, has free web filing. The only restriction is that you can't itemize your deductions. I used it last year and it couldn't have been easier.
This is definitely a step in the right direction. If enough states do this, Uncle Sam probably would be more apt to do free filing.
Ian
It just gives them more ability to make sure you did everything wrong. In the past this was a manual process and so many returns were skipped. If all returns were e-filed then they could just let the computer get to work.
They like to very tightly control who has access (for good reason) to send them data, both for quality control and security.
That actually makes it the perfect place for open source software, because you don't have to worry about massive numbers of people downloading and using your software for free. Tax preparation and e-filing is a service, and selling services is exactly how you make money with open source software.
I used www.hrblock.com last year. No software, it's all done online (a little sludgy in some spots if using dial-up), and the total fee for e-filing 1 federal and 1 state (regardless of # of employers) was $14.95. I found it to be beyond easy and extremely helpful. They'll hold your hand all you want, just click on the icons for explanations of the data they're asking for. They even give you hints on when to and not to enter certain info, depending on your situation, to help you gain the largest return. Also, you can prepare as many returns as you want (say, married filing jointly and married filing separately to see which gets the biggest return) and there's no fee, and after you've finished them all, you can select which one to actually file. If you get interrupted, you can save where you are and come back to finish it later. Finally, they save the filed return for you online for you to access for years to come. I haven't checked them out yet this year, but if nothing's changed I definitely plan to use them again. Good luck.