Free tax help programs

In short

A friend of mine once paid a stranger sixty dollars to do a tax form that would have cost her nothing. You can avoid her mistake. The IRS runs a program called Volunteer Income Tax Assistance, or VITA, that prepares basic returns at no charge for people under an income limit of the current figure, which the official source publishes each year. It also runs Tax Counseling for the Elderly, or TCE, which is free help with a focus on people age the current figure, which the official source publishes each year and older. If you are not sure you qualify, start at the IRS website and look for the VITA locator. Gather your papers before you go, and bring a photo ID. Ask the volunteer to show you the credits on your return, so you understand your own return. Free is a fair price for honest work.

The whole of it

What it is

I once watched a retired schoolteacher sit at a folding table in a church basement and walk a young father through his first tax return. She had no fancy office. She had a laptop, a cup of coffee, and a patient way about her. That is a fair picture of what free tax help looks like for many folks.

You have probably heard of VITA and TCE, though you may not know what they offer. VITA stands for Volunteer Income Tax Assistance. It is run by the IRS, and trained volunteers prepare returns for people who earn under a set income, along with people with disabilities and people who speak limited English. TCE stands for Tax Counseling for the Elderly. It helps older taxpayers and puts extra weight on questions about pensions and retirement income.

There is a third path, too. If you are holding a return you want to file yourself, the IRS offers Free File, which pairs partner software with a free filing option. Whether you qualify depends on your income, and the IRS sets that limit each year at the current figure, which the official source publishes each year. All of these programs exist for one plain reason. A tax return should not cost you money you do not have.

How it works

A friend of mine told me she felt ashamed walking into a VITA site. She need not have. The people there are neighbors, and many are glad to be useful. You find a site by using the VITA locator on the IRS website, or by calling the number the IRS lists there. Many sites are in libraries, community centers, and churches. Some take walk ins, while others ask you to book a time. Call ahead, because hours change.

When you arrive, a volunteer greets you and checks your photo ID. Then you fill out an intake form that asks about your household, your income, and your bank account. The volunteer enters your numbers into tax software. A second volunteer, trained as a quality reviewer, checks the work before it is filed. That step matters. The return is filed electronically, and you can ask for your refund by direct deposit, which means the money goes straight into your bank account. The IRS says direct deposit is the fastest way to get a refund, and it spares you the cost of cashing a check.

Volunteers must pass IRS certification before they touch a return. The IRS describes this training on its VITA and TCE pages. Some tax situations are outside what these sites handle. If you own a business with many expenses or sold stock, ask the site what it can cover before you come.

The numbers, and where to find yours

You have probably wondered whether your income is low enough. The honest answer is that the limit changes by year. The VITA income limit is the current figure, which the official source publishes each year. The Free File limit is the current figure, which the official source publishes each year. The age line for TCE is the current figure, which the official source publishes each year. The live figures are on the IRS page, and the site fills in the verified number with its source and date.

The number most people need is their income for the year. You will find it on your forms. A W 2, which your employer sends, shows your wages in a box labeled for that purpose. A 1099 form shows other income, like work done as a contractor or interest from a bank. Add those up, and you have a rough picture of where you stand.

Your adjusted gross income, or AGI, is the figure Free File cares about. It is your total income, minus a few allowed adjustments. It appears on last year's return, on a line the form labels adjusted gross income. If you filed last year, pull out that return. If you did not, the site volunteer can help you figure it out.

A worked example

I want to tell you about a woman named Marisol. She works as a home health aide and earns 31,000 dollars a year. She has two children and lives in a rented apartment. Last year she paid a storefront preparer 180 dollars to file her return, and she took a quick refund loan against it. The loan carried a fee of 40 dollars. She walked away with less than she should have.

This year, a coworker told her about VITA. Marisol found a site at her public library using the IRS locator. She brought her photo ID, her Social Security card, and cards for both children. She also brought her W 2, her rent receipts, and her bank routing and account numbers.

The volunteer prepared her return and checked it for credits. Say her tax bill came to 1,100 dollars after credits were applied to her income tax, and her employer had already withheld 1,500 dollars from her pay. Here is the math with the inputs shown. Withheld amount of 1,500 dollars, minus tax owed of 1,100 dollars, equals a refund of 400 dollars. Those numbers are made up to show the steps, and your own will differ.

Now compare her two years. Last year she paid 180 dollars to the preparer and 40 dollars for the loan fee. Add those, and 180 plus 40 equals 220 dollars in costs. This year she paid nothing. The 220 dollars she saved is real money. For a family on her budget, it covers a good part of a month's groceries.

Where it goes wrong

I once watched a man show up at a free site with nothing but his name. He had left his W 2 at home and had no ID. The volunteers were kind, but they could not file his return that day. He lost a whole afternoon and had to come back. Paperwork is where many trips fall apart.

Other things can trip you up. Some sites fill up early in tax season, so a late arrival may mean a long wait or a turn away. Some sites do not handle complex returns. If you ran a business or sold property, the site may send you elsewhere. That is not a failure on your part. It is just the limit of what volunteers are trained to do.

Watch out for look alike offers, too. A storefront that advertises free filing may charge you later for add ons. The IRS says VITA and TCE sites do not charge for preparing your return. If someone asks for a fee, or asks for a cut of your refund, that is a sign you may not be at a real site, and the IRS locator lists the true ones. The IRS also says a preparer should not ask you to sign a blank return. And a return carries your name, so you are the one answering for it. Read it before it is sent.

One last snag. Free help prepares the return, but it will not pay a bill you owe. If your return shows you owe money, you still owe it by the deadline. The volunteer can explain your payment options. You can also read about them on the IRS website.

Questions to answer before you leave this page

Do you know roughly what your income was for the year, and have you checked it against the current VITA limit on the IRS site? Have you found a VITA or TCE site near you, and do you know whether it takes walk ins or needs an appointment? Do you have your photo ID, your Social Security cards, and the cards for everyone on your return? Have you gathered your W 2 or 1099 forms, plus your bank routing and account numbers for direct deposit? Do you know whether your return is simple enough for a volunteer site, or will you ask them when you call? And have you set a date on your calendar to go, so the good plan does not slip away?