Don't let tax help overtax your budget
Millions of people will overpay to file their taxes this year. Don't be one of them.
This post comes from Stacy Johnson at partner site Money Talks News.
Imagine owning a business where you charge people $50 to $200 to do something they could just as easily get totally free.
You would think such a business would be bankrupt in minutes, but you'd be wrong. Tax preparation and software services rake in hundreds of millions of dollars every year for tax help that could be had for nothing.
The simple fact is that if you made less than $49,000 last year, you can have your taxes prepared and electronically filed by a trained volunteer without cost. If you made up to $57,000, you can have your taxes prepared online and filed electronically for free. And no matter how much you made, if you're willing to fill out online forms, you can also file free.
Which means millions of Americans are potentially shelling out millions of dollars needlessly every tax season.
Watch the following 90-second news story I did on this subject, then meet me on the other side for details.
Let's recap those options and provide you some links:
Inncome less than $49,000 in 2009: Free in-person help. Check with Volunteer Income Tax Assistance. There are thousands of VITA sites in places like churches, community centers, libraries, schools, malls and military bases, as well as in some IRS offices. To find one near you, just go to a search engine and type "VITA sites" along with your city or state. In my state (Florida) there are 79 pages of VITA sites. So finding one isn't tough. There are a few limitations, however, so check out this list of criteria for free preparation to make sure you qualify.
- Bing:VITA sites
Over 60: Free in-person help. If you're over 60 with low to middle income, AARP also has thousands of places you can go for free preparation and filing. You do not have to belong to AARP. To find a site, just go to this AARP Web page and put in your ZIP code.
Income less than $57,000: Free online preparation and electronic filing. If you make too much for VITA and/or aren't old enough for AARP, you can still have your taxes prepared and filed for free online. According to the IRS, 70% of American taxpayers -- 98 million people -- qualify. If you made $57,000 or less, head to this page on the IRS Web site. When you get there, you'll be asked to provide some basic information, then you can select from any number of companies that participate in the program.
Most companies will charge you to prepare your state tax return, however, and prices are all over the place. Some charge $15 and some $40. So shop around.
Special note for those who made more than $57,000 last year: While the companies you find at the free preparation and filing site won't file your taxes free, this list is a good place to comparison shop online preparation options. For example, I found several sites that claim to prepare and file your federal income taxes for less than 10 bucks. That's a lot better deal than the heavily advertised tax software you find at retailers this time of year.
Any income: Free filing with online forms. If all you need to do is fill in online forms -- in other words, you don't need any advice from either a person or an electronic preparation program -- you can prepare and electronically file your taxes absolutely free. Here's the IRS Free File Fillable Forms site. While no advice is available with this option, the forms will check your math. So is your situation hasn't changed all that much from last year, you could just pull out last year's return, input this year's numbers and be done. But be aware that there's a slew of tax changes this year.Here's a link to a recent story I did that lists them. And this option doesn't offer state tax returns.
Any income: Free help. You can always get free help from the IRS by visiting an office or calling (800) 829-1040. And while it's not the easiest reading in the world, you can also find a lot of answers by doing a search at irs.gov.
I've been doing tax stories on TV for nearly 20 years. And I've asked employees of our nation's largest tax preparation services if they feel any guilt over charging their customers for services they could be getting free elsewhere. Their response? Nope: It's the responsibility of customers to explore their options.
Now you know your options. Don't waste your money. And share this story with your friends. Let's all save some cash, use it to pay down debt and make our lives less taxing.
Related reading at Money Talks News:
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