Tax time is double trouble for residents of 43 states. Most of them must file a state tax return in addition to a federal 1040.
That means twice the hassle, time and costs, not only in what’s owed the state tax collectors, but also the added price for state tax preparation and e-filing.
State taxpayers, however, do have an option.
MyFreeTaxes.com offers eligible individuals free state return preparation and filing alongside their federal forms.
Another free filing option
This nationwide tax filing program, which has been in operation since 2009, is a partnership of Goodwill Industries International, the National Disability Institute and United Way. It is funded by the Walmart Foundation.
In many ways the program is identical to two widely used tax filing programs, the Internal Revenue Service’s online Free Filing option and the agency-sponsored Volunteer Income Tax Assistance, or VITA, that offers in-person tax help.
In fact, H&R Block, one of the mainstays of Free File, provides a version of its software to MyFreeTaxes participants.
But where state tax filing help and free electronic filing usually carries an added cost under most tax filing programs, it’s totally free for qualified MyFreeTaxes filers.
Same general requirements
First, the similarities. Like Free File, a MyFreeTaxes filer must have an adjusted gross income of $60,000 or less.
MyFreeTaxes also uses the already established VITA program, offering help to filers who want face-to-face tax help. That means it follows VITA’s eligibility rules, which make the service available to individuals who make $53,000 or less.
The hundreds of branches of MyFreeTaxes’ nonprofit partners already see many of such qualifying taxpayers through the other services they provide nationwide. That makes the network a prime source of individuals and families who could benefit from free tax filing.
How large a free filing customer pool? More than 200,000 filers used MyFreeTaxes’ online version last filing season, according to Laura Scherler, director of Financial Stability & Success at United Way Worldwide. Around 1.6 million took advantage of the program’s VITA services.
Free state help
What makes MyFreeTaxes more appealing than other free tax services? Free state tax help.
“Free File is free for federal filing, but not always free for state returns. Most programs that offer state return filing on Free File have lower income thresholds and some charge fees,” says Scherler. “We have no filing fees for either.”
In addition, MyFreeTaxes offers multiple free state tax returns.
“You can file up to three state returns,” says Scherler. This is a welcome option for the many filers who are cross-border workers. Just ask Washington, D.C., residents who work in Virginia or Maryland, or taxpayers and residents of Kansas City, Kansas, and Kansas City, Missouri, or Omaha, Nebraska, and Council Bluffs, Iowa, about their multistate filing issues.
Welcome by IRS
You might think that the IRS would not be pleased with competition for its Free File services.
You’d be wrong. The agency’s main goal is to get every taxpayer to file electronically, in large part because it’s more cost effective for the IRS. So it has no problem with other qualified e-filing programs.
“Making sure that free tax preparation assistance is available to everyone who qualifies provides a valuable service to the taxpayers who need it. These free tax education and assistance programs can also help to ensure that people get the tax credits they qualify for, such as the Earned Income Tax Credit. We certainly appreciate our partners who offer these services to taxpayers,” says Dietra Grant, director of Stakeholder Partnerships, Education and Communication at the IRS’ Wage & Investment Division.
Have you used a free tax preparation and e-filing program? Let us know which one and how it worked.
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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”