PhotoDo you remember the first time you had to file a tax return? For most first-timers, it was a daunting array of too many boxes and what-exactly-are-they-asking-for numbers to track down.

Maybe -- just maybe -- the Internal Revenue Service (IRS) has turned a sympathetic ear to the demographic it’s going to have to deal with for the next 50+ years. As an entry point, the agency has upped its promotion of IRS Free File, a tax return specifically designed for first-time filers and part-time workers. 

The IRS says Free File might be the perfect thing for people looking to save money on federal tax preparation or trusting Uncle Sal to work his magic. It also means free electronic filing and free direct deposit, which the agency says is the fastest way to get a refund.

"Doing your taxes may seem a bit overwhelming, but it's not. Free File does the hard work for you. The software finds the right forms, finds any tax benefits and does all the math," said Ken Corbin, commissioner of the IRS' Wage and Investment division. "Here's a key tip: have all your income records like your Form W-2 ready before you start."

Step-by-step

Free File is best-suited to users under age of 30 with modest incomes and a limited list of deductions. For 2020, the Free File adjusted gross income limit is $69,000. Here's how it works:

  1. On a computer or mobile device (yes, the IRS has made things mobile- and tablet-friendly) go to IRS.gov/freefile to see all Free File options.

  2. You can use the Lookup Tool to help choose a Free File offer to file your taxes for free online. All that takes is a couple of minutes to answer a handful of simple questions about income, age, any applicable military pay, and state residence to find out which offers are available for you.

  3. You may notice offers from tax prep services like H&R Block or TurboTax -- partners that, according to the IRS, set their own eligibility standards generally based on income, age and state residency. As an added plus, two products are in Spanish. 

As a side note, it may be helpful to do some extra homework about the tax prep services the IRS is partnered with. A good place to start might be ConsumerAffairs “Best Tax Software and Services” guide. If you search for “free file” on each company’s listing, you might find other consumer reviews or input from ConsumerAffairs’ Tax Software team.

  1. Next, you’ll pick a provider and follow the links to their site to begin filling out your tax return.

And, like that, you’re done!

Getting ready

Yes, there’s some work involved in getting File Free-ready, but it’s generally simple stuff. Here’s what you should have ready:

  • Before anything else, check with your parents to make sure they are not claiming you as a dependent. If they are, then you can’t claim yourself as a dependent, too. 

  • Social Security number.

  • Wage and income information (i.e. Form W-2 or Form 1099.) The IRS reminds filers that parts of college scholarships or grants may be taxable income.

  • Documentation for all tax credits and deductions. That stuff is shifting sand territory at the IRS, so while some of what worked last year might be good-to-go in 2020, it would be a smart move to call the IRS and confirm what is and isn’t.

  • For any and all electronic tax returns, filers are required to use their prior-year adjusted gross income as part of their electronic signature. “If you are a first-time filer over the age of 16, simply enter 0 (zero) as your prior-year income for signature purposes. If you filed before, your prior-year tax return will show your adjusted gross income,” advises the agency.

  • And, by all means, get your bank account and routing number. The fastest way to get a refund is through direct deposit to a financial account.

And, remember…

The IRS isn’t the vulture it used to be portrayed as. It’s actually very accommodating and ready to help where it can. Consumers can get a list of phone numbers and times the IRS takes calls here

Keep in mind that the IRS has gone through a long, protracted cutback, and there’s fewer agents to help than there were in the past. Given that, there can be a wait depending on when you file, so if you’re reading this in late March, you might want to grab a snack.

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