Millions of American households pay to prepare and file their federal income tax returns, yet many might qualify to do it for free via an IRS-approved initiative.
So, what’s stopping them?
One factor could be the intricacies of tax laws.
“Our own study suggests that this complexity matters for households, particularly those with lower incomes, opting for paid tax preparation services,” shared Margot Crandall-Hollick from the Urban-Brookings Tax Policy Center in an email.
According to the Tax Policy Center, using IRS data, around 85.4 million tax returns were managed by professionals in fiscal year 2024. On top of that, 61.7 million returns were submitted using commercial software, with an estimated 26 million of those filed at no cost.
Individuals looking into free options might find them challenging to understand. The U.S. Treasury indicated that these services provide varying forms of help—from in-person support to user-friendly online tools—and differ in eligibility and the availability of state return preparation in their report.
In that same report, the Treasury Department revealed its decision to halt the Direct File program, which aimed to introduce free tax preparation directly through the IRS. This suspension is primarily due to federal program costs, as the initiative was still in a trial phase.
Even though Direct File has been put on hold, several IRS-approved free options remain accessible for individuals this tax season.
This involves a long-standing partnership between the IRS and a reliable partner in the private tax preparation software sector.
Those with a 2025 adjusted gross income of $89,000 or less may qualify for these services.
The IRS has an interactive survey that can assist in determining eligibility for free filing options, along with identifying suitable services available through various partners. It’s worth noting that, depending on the chosen partner, state income tax returns might also be filed for free.
The Free File Fillable Forms program allows taxpayers to fill out certain fields for federal tax returns directly on the IRS website. Interestingly, there are no restrictions based on income, age, or residence.
“Since these forms mimic the traditional IRS paper forms, using this option is akin to the old ‘pencil and calculator’ method,” explains a representative. Although, he adds, these forms don’t provide additional guidance, so familiarity with the tax return process is beneficial.
According to estimates from the Treasury Department, only about 400,000 out of roughly 161 million tax returns for 2024 were completed using free fillable forms.
VITA and TCE Programs
The Voluntary Income Tax Assistance (VITA) program mainly aids taxpayers with incomes below $69,000, along with individuals with disabilities and non-native English speakers.
The Tax Counseling for the Elderly (TCE) program operates alongside VITA and focuses on older adults, but doesn’t have formal income limits set by the IRS.
As noted by the Taxpayer Advocate Service, TCE sites provide complimentary federal and state tax preparation aid to individuals aged 60 and above, tackling specific issues like pensions and retirement.
The Treasury Department has approximated that around 67 million filers will qualify for VITA in the 2024 tax year; however, just 1.6 million filings were completed through this program. For the TCE program, only 1.2 million returns were filed of the 22 million eligible.
VITA and TCE services are delivered through about 3,100 partner organizations, including the AARP Foundation, across the country, according to the national tax advocate.
These organizations typically provide lists of available return types, although specific organizations might have limited options.
Additionally, military personnel and qualifying veterans, along with their families, are entitled to free tax preparation and filing services—both federal and state—through the Department of Defense’s Miltax program.
Notably, there are no income limits for using this service.
The MilTax software is specifically designed to cater to the unique challenges faced by military families, such as addressing combat pay and managing multiple relocations within the same tax year.
