Welcome to the official start of the 2014 tax filing season, part one.
Although some software companies and tax professionals have been completing 2013 tax returns for the last couple of weeks, the official e-filing of these 1040s won't happen until Jan. 31. That's the day the Internal Revenue Service will start processing all tax returns.
One part of IRS filing operations, however, did officially open its electronic doors today, Friday, Jan. 17. Free File is now up and running.
The Free File program has been handling returns since 2003. Since then, the partnership between the IRS and tax preparation software manufacturers has accounted more than 40 million federal returns, including around 3 million last year.
The program is very popular among its users. The IRS and Free File Alliance, the nonprofit coalition of tax software companies that are part of the no-cost e-filing operation, are pretty happy with the endeavor, too.
So will you join this merry band of fee-free electronic tax return filers this year? To help you decide, here are a few things to keep in mind about Free File 2014.
1. You won't get your refund any quicker.
Sorry, but while Free File is accepting returns starting today, these filings will simply be placed in the IRS' processing queue.
IRS employees won't be dealing with Free File returns until the official start of the filing season on Jan. 31. But at least your taxes are off your desk and in line for processing.
2. You can't make too much money.
The goal of the IRS and the Free File Alliance is to get as many people using the program as it can. But Free File also is designed to help folks who might not have money to spare for tax preparation. So there's an income limit for Free File uses.
This filing season that threshold has been bumped up a bit (thank you, inflation) from $57,000 to $58,000. If your adjusted gross income (AGI) was $58,000 or less in 2013, you can use Free File.
A quick way to determine your AGI is to look at your 2012 federal income tax return. On that old return you'll find AGI on
- Line 4 if you filed a Form 1040EZ,
- Line 21 if you filed a Form 1040A, or
- Line 37 if you filed a Form 1040.
If things were about the same for you in 2013, your AGI is likely to be close to that 2012 amount.
Also note that the $58,000 limit applies to all filing statuses. It's $58K for a single taxpayer as well as for the combined earnings of a married couple filing jointly.
3. Your state return might not be free.
Some of the participating tax software companies -- there are 14 this year -- throw in free state return preparation and e-filing. Some don't. And even where this option is available, the companies might set other eligibility requirements for state returns.
If getting your state taxes filed for free is important to you, carefully check out the possibilities offered by Free File companies before making a choice.
If the company you want to use to file your federal tax return won't help you file your state return for free, check out your state's tax department website. Many states have their own free e-filing option for residents. Yeah, it's not quite as easy as doing it all at once at the same site, but it's free!
4. Fillable Forms return, too.
You made more than $58,000 last year. Don't despair. Free File has an offer for you, too.
Math calculations are completed on the forms, but that's as technical as it gets. These are just the forms, not interactive software. You must have some grasp of how to do your taxes yourself.
And since this is offered by the IRS there are no state tax forms available.
But if you're comfortable doing your federal tax return on paper, Fillable Forms should be a breeze for you.
Once you enter all your tax info onto the computerized forms, then you can e-file your return at no cost.
You can't start work on this option, however, until Jan. 31.
So what do you think? Are you going to Free File or use Fillable Forms this year?
Since Free File is now open, fiddle around with it this weekend before you decide.
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