IRS, Free File Alliance launch ‘Free File’


Erin E. Arvedlund - Guest Columnist



Yay, it’s tax season.

The IRS and Free File Alliance on Friday launched “Free File” — a free way to file your income tax returns.

For 2016, there are updates to Free File, including more free state tax returns, and this year, the alliance includes 13 tax-software providers.

Taxpayers with $62,000 or less in adjusted gross income during 2015 are eligible for Free File. That’s $2,000 more in earnings than the previous year. More than 70 percent of all taxpayers — 100 million people — fall into this category.

You can use Free File software immediately, but the e-filed returns won’t be transmitted to the IRS until Tuesday, when the filing period officially begins.

Taxpayers who earned more than $62,000 can still access Free File Fillable forms, the electronic version of the IRS’s paper forms. Those also should be available Tuesday.

“Free File software can help walk you through the steps and help you get it right,” IRS Commissioner John Koskinen said in a statement.

Tim Hugo, executive director of the Free File Alliance, said the online site IRS.gov/FreeFile “is the one place where taxpayers can choose from a variety of industry-leading tax software options in order to prepare and e-file their federal tax returns at absolutely no cost.”

This year’s tax deadline is Monday, April 18. Taxpayers who can’t meet that filing deadline can use Free File to request a six-month extension.

Each of the 13 participating tax-preparation software companies has its own offers, based on age, income, or state of residency.

There’s also a “Help Me” tool that will find software for which you are eligible, including which companies offer free returns in your state.

You can use Free File in conjunction with myRA — the new, free retirement savings account from the Treasury Department.

Taxpayers who have myRA accounts may use Free File to deposit their tax refunds or a portion of them. Just use Form 8888 or follow your software product’s instructions.

Health-care forms

Most people will simply have to check a box on their 2015 tax returns to report health-care coverage for the entire year.

But other taxpayers may have to claim exemptions from coverage or make “shared responsibility” payments with their tax returns. Ouch!

If you or anyone on your tax return purchased coverage from the federal government’s health-insurance marketplace, you may be eligible for the premium tax credit.

If you opted for advance payments of the premium tax credit to help with monthly insurance-premium payments, you must file a tax return, even if you were not required to file based on income.

“This year, there is a new requirement that health-care coverage providers furnish taxpayers with a form listing those who are covered,” Koskinen said in a conference call. (Your company should be sending those in the mail this month.)

“I also have an important message for people who received advance payments of the premium tax credit in 2015. They will need information from Form 1095-A that they receive from the Health Insurance Marketplace, so those people need to wait for the Form 1095-A before filing their tax return,” he added.

“The form will help them reconcile their advance payments and file an accurate return,” he said.

Everyone who received advance payments of the premium tax credit must reconcile those payments on Form 8962 and include the 8962 with their return.

Those who fail to do so may not be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for insurance.

Learn more at IRS.gov/aca.

A must to avoid

That would be tax-season scam artists — telephone scammers in particular. Callers pretending to be from the IRS aim to steal money or identities from their victims.

There are a lot of variations on this theme: The caller may say, “You’re entitled to a huge refund,” or threaten to induce you to give bank account numbers or other personal information.

Don’t do it.

“The IRS will not make angry calls to demand immediate payment, nor will the agency call about taxes owed without first having mailed out a bill,” Koskinen said.

“We will not demand that someone pay taxes without giving them the opportunity to question or appeal the amount owed,” he said.

“And we won’t ask for credit- or debit-card numbers over the phone. We also will never threaten to bring in local police or other law enforcement groups to have someone arrested for not paying.”

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Erin E. Arvedlund

Guest Columnist

[email protected], 215-854-2808 or @erinarvedlund

[email protected], 215-854-2808 or @erinarvedlund

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