Free File Alliance
The Free File Alliance is a group of tax preparation companies that have partnered with the Internal Revenue Service to provide free electronic tax filing services to U.S tax payers meeting certain guidelines. The IRS stipulates filers must have an adjusted gross income (AGI) of $58,000 or less for tax year 2010, but participating companies have their own requirements and restrictions.
In 2007, Alliance members agreed to remove controversial ancillary offerings such as refund anticipation loans from the program.
The free services often limit their software's ability to handle complex tax situations. Some of the Free File Alliance tax sites and their limitations are (in addition to those listed at the IRS website):
- CompleteTax (interview style)
- No RALs or other add-on products.
- FreeTaxUSA (interview style)
- No 1099-MISC forms.
- TurboTax Freedom Edition (interview style)
- No 1099-B forms - sale of stock, mutual funds, etc.
- Liberty Tax Service (line-by-line style)
- No Form 8824 - Like kind exchanges and section 1043 conflict of interest sales.
- No Form 2439 - Notice to shareholder of undistributed long-term capital gains.
- No non-resident or part-year resident state; only one state as full-year resident. Free up to AGI of $20,000; includes all states.
- HR Block
- Free state return up to $55,000; not all states included.
- TaxACT (interview style)
- Adjusted Gross Income: $51,000 or less, and
- Age: between 18 and 57, and
- Live in any state or U.S. Citizens and resident aliens with foreign addresses
- Free Extensions