Last year, I took the time to shed some light on a fantastic yet underutilized income tax filing option: IRS Free File. With the 2024 tax season dawning upon us, it’s an opportune moment to revisit this program and also hint at what’s coming in 2025.
Let’s recap briefly: IRS Free File is a collaboration between the IRS and eight private tax preparation companies. These firms offer free and secure online tax preparation services for eligible individuals, rivalling paid services like Intuit’s TurboTax or H&R Block. While these companies charge for what the Free File partners provide for free, Intuit is known for using sneaky tactics to sell unnecessary services.
As someone who watches their budget closely, the thought of paying for something I could have gotten for free is infuriating. Stick around to find out how you can avoid it.
IRS Free File
Back in 2021, IRS Free File was new to me, and I’d been loyal to Intuit (TurboTax) for years. Leaving the familiar for a promise of savings seemed daunting until I discovered that Intuit settled a multi-state lawsuit for $141 million in 2022 over deceptive practices. My own frustrating experience dodging extra fees to file a simple return further motivated the switch.
For the third year in a row, I’ve chosen Free File for both my federal and state taxes, with no desire to return to TurboTax or other paid services.
New Partners
In 2025, the IRS has grown its list of trusted partners from six to eight. Here’s who you can work with this year, including their eligibility details.
My go-to is FreeTaxUSA, and that’s purely coincidental with no financial ties to CanIRetireYet?. Though my 2024 taxes were anything but straightforward, FreeTaxUSA handled both my federal and state returns with ease and accuracy, all for free (with a mere $14.99 for state filing).
Eligibility for free state filing might also be possible depending on your situation.
Eligibility
Each IRS Free File partner has its own eligibility criteria, mainly based on your adjusted gross income (AGI), age, state of residence, and whether you file a state return. The 2024 tax year sees the AGI cap rise to $84,000 from $79,000 in 2023.
Digging Deeper
The IRS lists $84,000 as the AGI cap, but this figure can be misleading in a good way. For instance, my AGI was $84,000 in 2024, yet FreeTaxUSA didn’t charge me for my federal return, and the graphic indicates a $48,000 max. Similarly, some readers using OnLine Taxes (OLT) also reported free filings well above the supposed income limits.
The lesson here is that reality can diverge from the official details on the Free File site, so explore the partners to see where you actually stand.
Choose a Free File Partner Via the IRS Website
Always start at the IRS Free File website to pick your partner, as directly visiting a provider’s site might disqualify you for free services. Click on the "Explore Free Guided Tax Software" button and choose between browsing all partners or finding a trusted one that matches your criteria. Given the discrepancies in AGI limits, browsing all options might be best to ensure you don’t miss a good deal.
A Small Complaint
One reader had issues importing 1099s from third parties with their Free File partner. While automatic importing is convenient, switching to FreeTaxUSA meant entering some data manually—a one-time hassle, since it saves my info for future use. Other partners like TaxAct and TaxSlayer offer third-party data imports, according to their sites.
IRS Direct File
The IRS launched its free Direct File service last year, though it’s limited compared to Free File in features and eligibility. Currently available in 25 states, Direct File restricts those with IRA or retirement plan transactions. Hence, it’s likely not for everyone, but worth watching as it evolves.
Get an Identity Protection PIN
Protect yourself from identity theft. In 2024, the IRS held nearly 2 million suspicious returns, highlighting the rise in such fraud. An Identity Protection PIN can safeguard you against fraudulent claims.
Valuable Resources
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I’m David Champion, and here’s my story: I retired from software development in March 2019, just shy of 53. To secure a long retirement, I consumed every early-retirement resource, including Can I Retire Yet?, which I’ve relied on for practical advice. Sharing my insights aims to match the high standard of Can I Retire Yet?’s content.
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