Everyone can prepare and e-file their federal tax returns for free through the IRS Free File Program. Free File is offered through a public-private partnership between the Internal Revenue Service and brand-name tax software companies. Free File can help you do your taxes fast; it’s safe and it doesn’t cost anything.

Free File offers two options: easy-to-use software or online fillable forms.

Free File software is for taxpayers who earn $58,000 or less

Nearly 100 million Americans – that’s 70 percent of the nation’s taxpayers – can use the free brand-name software and secure e-filing offered by private-sector companies. Several software products also are in Spanish. Each company sets its eligibility requirements, generally based on income, age or state residency. However, if your adjusted gross income was $58,000 or less in 2010, you will find at least one tax software product to use.

Here’s how it works: You must access Free File through the IRS website. At http://www.irs.gov/freefile, you can use an online tool which allows you to give a little information about yourself and the tool will guide you to the software for which you are eligible. Or, you can review the complete list of companies and their offerings and make a selection.

Once you select a software product, you will be directed away from the IRS website to that company’s website. There, the software generally will offer a step-by-step guide through the tax preparation process.

Free File does all the hard work. You don’t need to be a tax expert; the software will help find tax breaks, such as the Earned Income Tax Credit, that you may be due. The software asks the questions; you supply the answers. It will find the right tax forms and do the math. Free File has a high satisfaction rate among its users, 98% recommend it to others. Combine e-file and direct deposit and you get your refund in as few as 10 days.

A word about security: all Free File companies use the latest in secure technology. The safety of taxpayer information is everyone’s priority. Thirty million taxpayers have used Free File since 2003, safely and securely.

Some companies provide state tax return software – sometimes for free and sometimes for a fee. Some states also have a relationship with the Free File Alliance and those states are listed on the companies’ websites.

For people who make more than $58,000 or who are comfortable preparing their own tax return, there is Free File Fillable Forms with free e-filing.
Go to: http://www.irs.gov/freefile. There is no software assistance with Free File Fillable Forms. It does basic math calculations. It does not support state income tax returns. It is perfect for the true do-it-yourself taxpayer who has preferred paper tax returns in the past.

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Free File: Frequently Asked Questions

What is Free File?
Free File is a free, federal income tax prep and electronic filing program for eligible taxpayers, developed through a partnership between the IRS and the Free File Alliance, a group of private sector tax software companies. Taxpayers can do their federal income tax returns using commercial online software provided by the Free File Alliance companies. You must go to IRS.gov to access Free File. This year, you have until April 18, 2011 to file and pay your taxes or request an extension.

Who is eligible for Free File?
The Free File program is open only to taxpayers with a 2010 Adjusted Gross Income of $58,000 or less. Each participating company sets its own eligibility requirements and not all taxpayers will qualify for all companies. Individual company offers may be limited by AGI, geographic location, specific states and include other criteria, so it's important to review the criteria before you choose. Or use the "Help Me Select a Company" tool to help you find a program that meets your needs.

Will late tax legislation this year have an impact on Free File?
The vast majority of people who use Free File will not be affected by late legislation. Those who are affected may still be able to prepare their returns. Many Free File software providers will hold returns until we can process them in mid- to late February.

If I am filing jointly with my spouse, does the $58,000 limit apply to both me and my spouse separately or combined?
If you are fling using the Married Filing Jointly filing status, the $58,000 AGI limitation applies to the AGI for both of you combined. This is the AGI that will appear on your return.

What is my electronic signature and do I have to use it?
When you e-file, you must electronically sign your federal income tax return with either the previous year's AGI or with an electronic PIN (personal identification number). It's easy to get your e-filing PIN, a five digit number, which you choose yourself.

May I also file my state return for free?
Some participating Free File Alliance companies do offer free state tax return preparation and e-file. Check the company's Free File home page to learn if free state income tax return prep and e-file services are available for you.

AK, FL, NV, NH, SD, TN, TX, WA and WY do not have a state income tax return filng requirement for reporting W2 wage income. Two of these, NH and TN, require taxpayers to file returns for individual interest and dividend income.

Do I have to download software?
No. All of the software remains on the Free File company website and your return is filed from there. All Free File company sites are equipped with the latest encryption programs to protect your privacy.

I bought tax prep software off the shelf. Can I use that to Free File?
No. Online returns must be prepared and filed through IRS.gov from the website provided by the company.

Can I get an extension of time to file if I use Free File?
Yes. Many Free File companies offer free electronic extensions. But don't forget to pay your taxes by the deadline. Otherwise, you will have to pay interest, and possibly penalties, on any tax you owe.

Where's my refund?
If it's been more than 3 weeks since the IRS accepted your electronic return and you have not received your refund, go the the IRS.gov website and access our online tool, "Where's My Refund?"

Is customer support service available?
Yes. As part of their agreement with the IRS, the Free File companies are required to provide customer support to taxpayers on their site. If you can not resolve the issue through the Free File company's website, you may want to switch to another company. If you still need help, contact the help desk.

Get started at Free File by choosing a company or browsing the list of providers.

Additional consumer information is available at www.freefile.irs.gov.
Contact information for the IRS is available at:
http://www.irs.gov/contact/index.html