You possibly can most likely file your taxes at no cost, however you are doing it mistaken

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WASHINGTON (NewsNation Now) – Tax season started on Friday, but many Americans are paying to file their taxes when they should be free.

According to the IRS, 70 percent of taxpayers are eligible to pay their taxes for free. However, according to NewsNation, not many use this option.

We looked at data from the IRS over the past few years and found that in fiscal year 2019 (October 2018 – September 2019) in the US, only 2.8 million returns were submitted to the Free File program. Compare that to an estimated 100 million taxpayers who are eligible. Instead, these people paid or submitted on paper.

Who is eligible and how does it work?

There are two types of free files. For those earning an adjusted gross income of $ 72,000 or less, the IRS has partnered with nine companies as part of the Free File Alliance.

What is Adjusted gross income (AGI)?

Gross income minus income adjustments. Gross income includes your wages, dividends, capital gains, business income, retirement distributions, and other income. Income adjustments include expenses for trainers, interest on student loans, alimony or contributions to a retirement account.

IRS

TurboTax, 1040Now and TaxACT are among the members.

To use IRS Free File, taxpayers need to go to IRS.gov and use a tool to find the company that best fits their tax situation. In addition to the normal documents needed for taxes, people also need an email address and a copy of last year’s tax return.

Once the taxpayers are assigned to the service, they can fill in their taxes for free. Some providers also offer state preparation free of charge.

Free File is open for the season. The IRS won’t start processing tax returns until February 12, which is later than normal due to the pandemic. The Free File platforms accept tax returns but don’t send them until February 12th.

Also this year, the IRS recommends that taxpayers file online and use direct deposit for refunds.

For those with an income over $ 72,000, there are simple forms to fill out free files. These won’t be available until February 12th.

The problems with Free File

It seems pretty simple. Taxpayers work with the tax service tailored to their needs, fill out their tax return forms and file them. There should be no costs. Why don’t many people use the program?

Reporting by the non-profit investigative news group ProPublica in 2019 revealed several issues with Intuit’s own TurboTax and its marketing.

First, the website promoted “free submission” on its home page and throughout the website. Regardless of what happened when ProPublica tried to file taxes, there will be a fee. Sometimes more than $ 200.

It turns out you can’t go to TurboTax.com directly. A note was hidden in the support area of ​​the website that it is impossible to find the latest free version on the TurboTax website. Instead, people should go to TaxFreedom.com.

ProPublica later discovered code on the website that intentionally hid Turbo Tax’s IRS Free File program from Google searches.

They also found that the company encouraged people with disabilities, the unemployed and students to pay more for their services after the new tax law was passed, and even distracted military personnel from the free version promised by the federal government.

A Senate investigative committee found in June 2020, among other things, that “until recently, the IRS had little control over the Free File program.”

When will I get my tax refund for 2021?

For taxpayers receiving a refund check, this is usually the most important question: When do I get my tax refund?

The questions will already come to a head in 2021. Here’s what we know:

  • Now: Many tax preparation companies allow people to file their taxes via email and IRS Free File is open.
  • February 12th: The IRS starts processing the returns.
  • Within 21 days: Nine out of ten taxpayers who submitted online direct deposit will receive their refund.
  • First week of March: Refunds are available to individuals who submitted an Earned Income Tax Credit (EITC) or Child Additional Tax Credit (ACTC) (PATH Act Returns).
  • April 15: Deadline for filing tax returns

Stimulus change

There is one notable change in the 2020 tax filing process. If you did not receive the stimulus payments or the incorrect payment, you may be eligible for the remaining money in your tax refund.

“Given the pandemic, this is one of the most important filing seasons in the country. This start date will ensure people get their required tax refunds quickly while also making sure they get any remaining stimulus payments they are eligible for as soon as possible, “IRS Commissioner Chuck Rettig said in a statement.

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