Q. It’s tax time again and I hear that the IRS may offer free tax preparation services to seniors. Do you know anything about this?
A. Yes. The IRS offers information on its site about free tax preparation software, fillable forms, and free taxpayer assistance, all available in an effort to make tax compliance easier, especially for seniors, those with a disability and those whose primary language is not English.
The free tax software is actually available from private vendors, but studies find that the availability of the free software is not well known and, in fact, is not easy to find on an Internet Search. It seems that, some years back, in an effort to increase the number of electronically filed returns, the IRS decided to encourage the use of tax preparation software. In aid of that goal, the IRS entered into an agreement with private software vendors whereby the latter agreed to make their software available for free to low income persons, especially seniors, and in exchange the IRS agreed not to design its own free software to compete with those private companies.
Unfortunately, it seems that some of these companies have initiated computer code so that their free software is not easily “findable” on an internet search and the searches direct the user to software for purchase. As a result, the number of taxpayers actually using the free software is relatively tiny. For more, click on the following link. The IRS has now amended its agreement with the software industry to bar the companies from hiding their free products.
That said, seniors and retirees should know that they can take advantage of free help to file their tax returns. There are basically four (4) categories of free assistance, depending upon income, age, disability and facility with English, as noted below. In each case, seniors can go to the IRS website [IRS.gov] and type in the following words in the search bar: “Free File: Do Your Federal Taxes for Free”. A screen will then pop up to give you choices, as follows:
1) Free Tax Preparation Software: This option is for seniors whose Adjusted Gross Income (“AGI”) is less than $69,000. Seniors who qualify can peruse the IRS site, choose their favorite vendor, and download free federal and state tax preparation software from vendors with such familiar names as Turbo Tax and H&R Block.
2) Free Fillable Forms: Seniors whose income is above $69,000 for the year can opt for Free Fillable Forms, but must have a basic understanding as to how to do their own taxes.
3) Free Voluntary Assistance: The Volunteer Income Tax Assistance (“VITA”) program offers free tax help to people who earn $56,000 or less, persons with disabilities and taxpayers with limited English speaking skills. IRS-certified volunteers provide free basic tax return preparation with electronic filing for qualified individuals.
4) Tax Counseling for the Elderly (“TCE”) program: The TCE offers free tax help for all taxpayers, particularly those who are 60 years of age and older, and specialize in dealing with pensions and retirement-related issues unique to seniors. The IRS-certified volunteers are often retired individuals associated with non-profit organizations.
You can find a location near you to obtain free assistance in any one of the following ways:
a) Call the VITA locator phone number at 1-800-906-9887; b) Call the AARP Foundation’s Tax Aid Program at 1-888-227-7669; c) Go to the gov web page, type the following into the search bar: “Free Tax Return Preparation for Qualifying Taxpayers”. Then Click on one of the two Locator Tools. Alternatively, you can just call one of these nearby locations: Hayward Area Seniors Center, Hayward: (510-881-6766); Eden Social Services Agency, Hayward: (510)271-9141; Laney College Ad Hoc, Oakland: (510-986-6947).
Of note, also, is that the IRS now also offers a simplified two page tax form designed especially for seniors. It is called the Form 1040-SR “US Tax Return For Seniors” and is designed to simplify the process for retirees.