Doing Taxes for Free: How to Navigate the Process

The thought of doing your taxes can feel overwhelming, especially if you’re not familiar with IRS tax code. You might be tempted to hire an accountant or a tax professional to help you out. But if you’re looking for a way to save your hard-earned money, you might be wondering – can I really do my taxes for free? The answer is yes, you absolutely can. Here’s everything you need to know about doing your taxes without spending a dime.

Free Tax Software Options

There are several tax software options that provide free federal and state tax returns for eligible taxpayers. These programs generally work best for straightforward tax situations, such as those of wage earners, students or unemployed individuals. The software guides you through each section of your tax return, and some even offer free customer support if you have any questions.

IRS Free File Program

The IRS Free File program works in partnership with leading tax software providers to offer free tax preparation services to taxpayers. To qualify for the Free File program, you need to have an adjusted gross income of $72,000 or less. Each partner company sets its own eligibility requirements, so it’s essential to review them before you begin working on your taxes.

The IRS also offers Free File Fillable Forms, which are electronic versions of their paper forms. These are perfect for people who are comfortable preparing their own tax returns, but want an easier way to do the math and submit their forms electronically.

VITA Program

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who make $57,000 or less, persons with disabilities, and limited English speaking taxpayers. IRS-certified volunteers at VITA sites will help you prepare and file your taxes completely for free.

Understanding Tax Laws

Part of doing your taxes involves understanding tax laws and how they apply to your situation. One tax law that often comes up in international taxation is controlled foreign corporations. What exactly is this?

What is a controlled foreign corporation, you may ask? A controlled foreign corporation (CFC) is a corporate entity that is registered and conducts business in a different jurisdiction or country than the residency of the controlling owners. Control is determined by the percentage of ownership by U.S. shareholders. U.S. tax law requires that a CFC’s “Subpart F” income and, as introduced by tax reform enacted in 2017, global intangible low-taxed income (GILTI) to be reported on the U.S. shareholder’s tax return, hence subject to U.S. tax.

Conclusion

While doing your taxes for free might require some time and effort, it can be a great way to save money. By taking advantage of free tax software options, the IRS Free File program, and the VITA program, you can easily and efficiently file your taxes. Additionally, understanding complex tax laws, such as what a controlled foreign corporation is, can help you better navigate your tax situation and ensure you’re not paying more than you need to.