How to Do Taxes Free Online

Filing Taxes Online for Free

Each year, we do the dance with the IRS to file our income taxes. You can go old school by going the pen and paper route, or you can file your federal and state taxes online where much of the process has been streamlined to minimize errors. For the 2008 tax year, the IRS has partnered with 20 or more tax preparation firms to make it easier to file your taxes online for free.

Instructions

1. 

   Gather all relevant documentation to complete your taxes.

2. Go to the official IRS Website to select a free online tax preparation service or tax software that you require. You'll find the link in our Resources section. There are 20 companies offering free tax preparation for the 2008 tax season (more to come in the future), so take some time. Find one you are comfortable using since you will likely use it again in the future.

3. Check to make sure that you qualify for free tax services. There are income restrictions with preference given to lower income individuals.

4. 

   Download and install the necessary software once you choose a tax service that meets your needs. If you are only required to use a web browser, make sure it's up to date and all security patches are installed.

5. Enter your personal information and carefully answer all survey like questions the tax software provides. This is important in identifying the deductions you can claim and what expenses you can itemize.

6. Enter your financial information from W-2, 1099, interest from savings accounts, and other necessary financial information. Make sure to double check this information once entered into the system.

7. Submit your completed income tax forms electronically (e.g. the "E-File" system) or print them out to mail them in the physical form.

8. Mail any completed documentation and copies of important deductions to the address given by the tax software. If you want additional peace of mind, send your tax returns by certified mail. Rush mail is available for those who wait until the last minute.

Tips & Warnings

• If problems arise, consider hiring a CPA or doing your taxes the old fashioned way by downloading the necessary forms from the IRS. If you have filed your tax returns in the past--or have few deductions to claim or income to declare--doing them yourself without the help of tax software or excess advice could be your best solution. Be sure to make copies of all relevant paperwork for future documentation.

• Check the IRS Website for assistance if you run into trouble. The IRS could even steer you to various advisory groups who provide free assistance. Since this is a free tax service, any unusual deductions or expenses you wish to itemize may not be available. Choose your tax program wisely to avoid being hit with hidden fees.

Resources

• IRS Website - Free File Alliance Online Tax Preparation Companies