How Much Does it Cost to E-File?
There are several websites recommended by the Internal Revenue Service that offer free e-filing services if you qualify. Before you visit a website and pay for e-filing, determine if you qualify for free e-file service, understand what the costs are if you don't, and what additional costs may unexpectedly pop up while you are completing your returns.
Other People Are Reading
-
Adjusted Gross Income
-
Free e-filing services are generally offered only to tax payers whose Adjusted Gross Income, called AGI, is $58,000 or less for tax-year 2010 (note, a few e-filing services have more restrictive AGI limits for the free service). To calculate your annual AGI, total all of your income, including wages, salaries, tips, taxable interest, ordinary dividends, IRA distributions, pensions, annuities, alimony and so on -- any monies considered income by the IRS must be figured into this equation.
Subtract any qualified deductions from your total annual income. Qualified deductions include qualified IRA contributions (Roth excluded), student loan interest, qualified moving expenses, one-half of your self-employment tax if self-employed, self-employed health insurance contributions and any other IRS qualified deductions. The total remaining is your annual AGI for 2010. If it does not exceed $58,000, you may qualify to use a free e-file service depending on your demographics and military status.
Federal Taxes
-
If you do not qualify for the free service, e-filing federal tax returns for an individual or married couple varies for each of the websites listed on the IRS website, ranging in price from $9.95 to $69. Business tax filings are as much as $99. The type of form that you use determines the cost to e-file. Usually the standard 1040 with no itemized deductions is the cheapest, and the 1040 with itemized deductions and other credits and deductions costs the most.
-
State Taxes
-
Some states have a free e-file service for filing state taxes via their own website, or they have partnered with an online website. You must check with your resident state to see if they offer free e-file. Most state returns that are not free to file run anywhere from $9.95 to $24.95. However, some additional forms may cost more.
Additional Forms
-
With federal and state returns, some forms that are needed by individuals or married couples cost extra. Two forms that raise the cost of e-filing a state tax return in some states is the Schedule U and Schedule WD. It can cost an additional $10 to $20 to use and e-file these forms.
Payment Methods
-
How you choose to pay for e-filing determines the overall payment after you complete your tax returns. If you use a debit or credit card, you pay only the charge assessed by the software program you are using. If you pay for the e-filing with any refunds that you have coming back, it could cost another $24.95 to have the money deducted from your refund.
-
References
Resources
- Photo Credit Sxc.hu
