It’s a day that is probably of great concern and can be a source of anxiety: the deadline for filing this year’s federal income tax returns falls on Monday, April 18.
Before that, taxpayers see dozens of advertisements promising “free tax filing” services.
Is there such a thing? Chicagoans are asking this exact question.
He is also at the heart of a trial currently unfolding in a San Francisco District courtroom.
The Federal Trade Commission recently filed a lawsuit against one of the largest and most popular tax preparers in the country: Intuit, the parent company of TurboTax.
In ad after ad — featuring barking auctioneers and bloated exercise instructors — the FTC alleges that Intuit “engages in deceptive acts” by claiming its services are free when “in many case [Intuit] does not allow consumers to file their taxes for free using TurboTax. »
Once taxpayers have invested their time and shared personal and financial information with the company, “Intuit tells them… they can’t go on for free; they will have to switch to a paid service to complete and file their taxes,” according to the FTC’s civil complaint.
Regulators have gone so far as to ask a judge for a temporary restraining order on the company’s advertising while the case continues in court. A hearing on that issue is scheduled for April 21 – three days after the tax deadline.
In a prepared statement, Intuit said the company will “vigorously contest” the lawsuit, saying the “FTC’s arguments are simply not credible.”
Intuit said that over the past eight years, the tax giant has “helped nearly 100 million Americans file their taxes for free.”
IRS Free Files Program
That word “free” is at the heart of an increasingly common question that many Chicago-area consumers are asking as they begin to prepare their taxes. Google Trends shows hundreds of local searches on this same question, every day.
A surprising source – the Internal Revenue Service itself – said the answer is yes, many can find a way to file for free.
“If you won less than $73,000, you’re likely eligible to use ‘Free File,'” IRS spokesman Michael Devine told NBC’s 5 Responds.
The IRS estimates that 70% of taxpayers are eligible to use its “Free File” program here, which has been around for nearly two decades.
If this is your first time learning it, you’re not alone. The “Free File” option has recently come under scrutiny because so few taxpayers are aware of it.
An audit by the Inspector General of the Treasury found in 2019 that only 2% of people eligible for the free program used it. And even worse, the audit found that millions of people eligible to file for free ended up paying for a commercial tax filing service.
The audit blamed this on “complexity, confusion and lack of taxpayer awareness of the…free files program.”
Taxpayers should be prepared for increased delays this filing season as the Internal Revenue Service (IRS) continues to process a backlog of returns from previous years.
Volunteer income tax assistance or VITA sites
There are other free options if you know where to look and who to turn to.
“There’s a free option for just about everyone,” Devine said. “If you make less than $58,000, you can go to a volunteer site.”
Volunteer Income Tax Assistance or VITA sites are found throughout the Chicago area, including one of the largest sites on the seventh floor of the Harold Washington Library.
You’ll find volunteers from Ladder Up, an organization that offers tax assistance to anyone earning less than $58,000 a year.
And it’s totally free.
As of April 3, Ladder Up told NBC 5 Responds it has processed more than 8,500 tax returns, totaling more than $17.3 million in refunds to local taxpayers.
This year alone, accountants, lawyers and students contributed over 18,000 volunteer hours to tax relief, all eager to give back.
“We actually want to reach more people,” said Phyllis Cavallone-Jurek, executive director of Ladder Up. “We don’t want to turn away anyone who thinks they qualify and would like to get our services. We want to grow and serve as many people as possible.
Ladder Up’s chief operating officer, Hedi Belkaoui, said the volunteers understand that the subject of tax filing can often be tense, and that’s why they want to publicize their free services.
“Taxes scare people,” Belkaoui said. “To me, that’s what we should be doing. That’s exactly what should be happening to these people. And not just some people who can afford a paid picker.”
To find a VITA center near you, click here.
Red flags and other free services
Finding free tax filing services can be tricky ground. Here are some red flags you can watch out for:
- No service or tax preparer should base their fees on the amount of your return, according to the IRS.
- If a service claims to be able to file your taxes for free, make sure your tax situation doesn’t need to be upgraded. Often the services will say that the free services are only available for “simple returns”
- Be on the lookout for tax services offering upgrades that cost more
For more red flags and an IRS checklist of things to look out for when selecting a tax return provider, Click here.
The IRS said that in 2022, the following service providers participate in its “Free File” program:
- ezTaxReturn.com (available in Spanish)
- FreeTaxReturn.com INC
- Taxes online at OLT.com
- TaxSlayer (coming soon in Spanish)
Another free tax resource available to the military community is MilTax – offered by the Department of Defense.