Final yr I wrote a few useful however little-known revenue tax submitting choice referred to as IRS Free File. With the 2024 tax season upon us, now is an efficient time to remind readers about this system, and share what’s new in 2025.
Right here’s a quick refresher: IRS Free File is a public-private partnership between the IRS and eight private-sector tax preparation corporations. These corporations present free, safe on-line tax preparation and digital submitting providers for eligible filers.
The capabilities of IRS Free File companions rival these of paid opponents like Intuit (TurboTax) and H&R Block. Not solely does Intuit cost for a similar providers Free File companions supply at no cost, they use bait-and-switch techniques to upcharge clients for providers they doubtless don’t want.
If you happen to’re a cost-conscious retiree like me, paying for one thing you might have gotten at no cost drives you completely loopy. Learn on to study one approach to keep away from it.
IRS Free File
After I came upon about IRS Free File in 2021, Intuit (TurboTax) had been my go-to vendor for years. I used to be hesitant to commerce the acquainted for the unknown, even with the promise of tons of in financial savings.
Then I realized that in 2022 Intuit coughed up $141M to settle a multi-state lawsuit alleging it had overcharged clients with misleading practices. My very own expertise with the product—dodging a minefield of paid extras simply to arrange and file a easy tax return—clinched the deal.
That is the third consecutive yr I’ve used Free File to file my federal and state revenue tax returns. I’ve no intention of ever going again to TurboTax, or any paid vendor for that matter.
New Companions
The IRS expanded its roster of trusted companions from six to eight in 2025. Here’s a record of this yr’s companions, and their eligibility necessities:
The accomplice I take advantage of is FreeTaxUSA, with which CanIRetireYet? has no affiliation monetary or in any other case. Any point out of it right here is incidental.
My tax state of affairs was something however easy in 2024. But for each my federal and state returns, FreeTaxUSA managed the complexity simply and precisely. Better of all, it price me nothing to arrange and file my federal revenue taxes electronically (and simply $14.99 to file a state return).
Relying in your eligibility standards, you might also be capable to file a state return at no cost.
Eligibility
IRS Free File eligibility necessities range from accomplice to accomplice, and rely on elements akin to adjusted gross revenue (AGI), your age, the state you reside in, and/or whether or not you select to file a state return.
In response to the Free File web site, the utmost AGI required for eligibility is $84K for the 2024 tax yr (up from $79K for the 2023 tax yr).
Digging Deeper
The $84K AGI most reported on the IRS web site is mistaken, albeit to the advantage of taxpayers.
For instance, regardless of my AGI being $84K in 2024, FreeTaxUSA charged me nothing to arrange and file my federal return. (The graphic above signifies a most of $48K.)
Readers of final yr’s put up reported comparable experiences with OnLine Taxes (OLT), one other of the Free File companions listed above. These readers reported paying nothing to arrange and file their federal returns utilizing OLT, though their incomes had been effectively above purported maximums.
The upshot is that what’s indicated on the Free File web site could not sq. with actuality. To see should you can file at no cost utilizing a Free File accomplice, click on by to the accomplice’s website to find out your precise eligibility.
Select a Free File Associate By way of the IRS Web site
Be sure to comply with the hyperlinks on the IRS Free File web site to decide on your most popular accomplice, as you gained’t be eligible at no cost providers should you navigate on to the companions’ web sites.
Click on the large blue Discover Free Guided Tax Software program button.
You’ll be introduced with two choices: Browse all trusted companions and Discover a trusted accomplice.
The Discover a trusted accomplice choice prompts you to enter standards akin to your age, AGI, state of residence and so forth. Based mostly in your enter, it filters the record of trusted companions to these it believes you’re eligible at no cost submitting.
Given the discrepancies with most AGI I discussed above, I like to recommend you select Browse all trusted companions. Utilizing the filtered record generated by the Discover a trusted accomplice choice would possibly omit equally good, free choices.
A Nitpick
One reader complained final yr that the Free File accomplice she used (unspecified) didn’t help importing 1099s from 3rd social gathering brokerage corporations. As an alternative, she was required to switch info manually from her 1099s.
Computerized information import is a handy characteristic; one which I admittedly misplaced once I switched to FreeTaxUSA. However this was largely a one-time, upfront price. FreeTaxUSA saves all my brokerage (and different) info from one yr to the subsequent. So all I’ve to do is enter the present yr’s figures when making ready my return.
As well as, in line with their web sites, at the very least two Free File companions—TaxAct and TaxSlayer—help automated, 3rd social gathering information import.
IRS Direct File
The IRS rolled out its personal free submitting choice final yr referred to as IRS Direct File. Nonetheless in its infancy, Direct File’s capabilities are much more restricted, and its eligibility necessities extra restrictive, than these of Free File.
Direct File is at the moment out there to residents of 25 states (up from 12 in 2024). Even should you reside in a taking part state, chances are you’ll not qualify beneath sure circumstances.
For instance, taxpayers who made deposits to, or withdrawals from, an IRA and/or a Medical Financial savings Account (MSA), or who acquired distributions from an employee-sponsored retirement plan like a 401(ok), are at the moment ineligible.
Given these restrictions, I believe nearly all of this weblog’s readers can be unable or unwilling to make use of IRS Direct File. I solely point out it right here as a result of it’s price maintaining a tally of as this system continues to mature.
Don’t Overlook to Get an Id Safety PIN
Armed together with your social safety quantity and different publicly out there info, scammers can file a fraudulent return claiming refunds or credit in your behalf.
In response to the Taxpayer Advocate Service, the IRS suspended processing of practically 2 million returns pending identification verification in 2024, signaling an enormous improve in this sort of fraud. Securing an Id Safety (IP) PIN from the IRS can forestall it taking place to you.
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Worthwhile Sources
- The Finest Retirement Calculators will help you carry out detailed retirement simulations together with modeling withdrawal methods, federal and state revenue taxes, healthcare bills, and extra. Can I Retire But? companions with two of the perfect.
- Monitor Your Funding Portfolio
- Join a free Empower account to achieve entry to trace your asset allocation, funding efficiency, particular person account balances, web price, money move, and funding bills.
- Our Books
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[I’m David Champion. I retired from a career in software development in March 2019, just shy of my 53rd birthday. To position myself for 40+ years of worry-free retirement, I consumed all manner of early-retirement resources. Notable among these was CanIRetireYet?, whose newsletters I have received in my inbox every Monday morning for the last ten years. CanIRetireYet? is one of exactly two personal finance newsletters I subscribe to. Why? Because of the practical, no-nonsense advice I find here. I attribute my financial success in no small part to what I have learned from Darrow and Chris. In sharing some of my own observations on the early-retirement journey, I aim to maintain the high standard of value readers of CanIRetireYet? have come to expect.]
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