Well, it’s that time of year again: tax time. And today I have a simple tip for you: how to find the real Free File version of all the popular tax software. It’s not as easy as you’d think – and that’s no accident.
A Brief History of Free File
Back in the early 2000’s as the internet was booming, the US Government was openly considering creating a free online tax filing service via the IRS. Other tax software companies, including Intuit (maker of TurboTax) and H&R Block, saw this as an existential threat to their burgeoning online tax software business. Thanks to some Republican Congressman (led by the congressman from Intuit’s home district), they managed to convince the IRS that the US Government should not be competing against well-established private corporations with so much experience. In the end, they convinced the IRS to publicly state that it would not create its own free online tax filing system in return for the private sector offering their own Free File online tax software to most taxpayers making under a certain amount of income (at the time, around 60% of filers). This was called the Free File Alliance.
Hiding in Plain Site
But, as usual, the devil is in the details. The agreement had several loopholes which these companies exploited to keep people from finding the official Free File version of their software. Instead, filers were driven towards very similar, unofficial free versions that inevitably pushed them to the non-free “deluxe” versions. At one point, they actually used technical means to prevent search engines like Google from listing the official Free File sites in their search results.
This is just part of the long, sordid history of the Free File debacle. I strongly encourage you to read the full story here, as detailed by the wonderful reporting by ProPublica. (I had the pleasure of interviewing one of the authors on my podcast – so if you’d rather listen than read, check that out.)
How to Find the True Free File Version
There was finally a backlash against all of these “dark pattern” tactics by the private tax filing software makers and the IRS formally backed off of its pledge not to create a competing free online tax filing service. Of course, they probably don’t have the budget to do so, but this was at least a symbolic step that should put companies like Intuit under pressure to live up to their promises.
The official IRS website for all of the Free File online tax services is here:
Every product linked to from this site is guaranteed to be truly free and should never try to up-sell you or pull a bait-and-switch for a non-free version. (In theory, at least.) The site also includes the criteria for qualifying, which statistically most US taxpayers will meet. Don’t be too hung up on the $69,000 income limits – this is for adjusted gross income, so you could make more than $69k per year and still qualify.
If you find the IRS site confusing or if you think you may not qualify for Free File, check out this ProPublica website with lots of great info and tips on filing your taxes for free: