It’s never been easier to file your taxes online. Gone are the days of slaving over handwritten numbers on tax forms and then mailing those at the post office. There are now multiple ways to e-file your taxes, whether it’s through one of the best tax software services, or by going straight to the IRS itself. We’ll walk you through each method of how to file your taxes online, and how to know which is the best option for you.
Tax software
One of the more popular options is to simply use one of the best tax software services. We reviewed six services, evaluating what they get right and where they stumble. The benefit to using these services is they not only guide you through the process of filling out your tax forms, but they also file the taxes for you. Five of the six services have some degree of tax pro assistance available.
And some do a good job of obscuring the actual tax forms and treating your taxes like an interactive conversation – a less daunting approach than seeing a digital version of a tax form. Ultimately, if your taxes are complex and you appreciate the thought of having a tax professional available to answer your questions, then it makes sense to use a tax prep service.
After reviewing half a dozen of them, our two favorite services are TurboTax and H&R Block. Both TurboTax and H&R Block have ample guidance for self-employed scenarios (they’ll even find deductions for you). They also have integrations with financial institutions to make it easier to import investment and crypto transaction data. If you’re having trouble deciding between the two, be sure to read our H&R Block vs. TurboTax comparison.
If you want to file your taxes for free, four of the services in our roundup have a free tier, for those with simple tax returns who qualify. And two – CashApp Taxes and FreeTaxUSA – are completely free. Both services have less guidance and live assistance than their competitors with free and paid offerings (although FreeTaxUSA this year adds a low-cost upgrade for priority phone and chat support). But each offers a free solution for filing both a Federal and a State return. And each can handle more complex returns, including self-employed scenarios, investments, and crypto.
IRS Free File
The aforementioned services are not the only way to file your taxes online. The IRS offers its own do-it-yourself path for filing online. Its IRS Free File service lets taxpayers file online. The service has two tiers: Guided Tax Preparation, for those with an adjusted gross income of less than $73,000, and Free File Fillable Forms, which anyone can use to prepare and file their taxes
The IRS’s Guided Tax Preparation is a bit of a misnomer, since all the IRS does is point you to third-party services the government partners with to help taxpayers file online. Set up an account set with the provider, and then follow the instructions set forth by that provider from there.
If you choose Fillable Forms, you’re taken to a page that explains how it works and points you to open an account with the IRS.
Guided tax preparation
If your adjusted gross income doesn’t exceed $73,000, you’re eligible to use the IRS’ Guide Tax Preparation. This option lets you choose one of seven online tax preparation services, each of whom is a partner with the IRS as part of the Free File Alliance, a non-profit, public-private partnership. Three of the providers have familiar names as part of our best tax preparation software roundup: FreeTaxUSA, TaxSlayer, and TaxAct.
Several providers have two offers for filing your taxes, each with a different set of criteria.
Start by reviewing the 11 offers at IRS Free File Online providers to find the best match. The fine print matters here. For example, some services limit your adjusted gross income — TaxSlayer allows only $60,000, for example. Some services are only available in certain states, while others are limited by residence or age of the filer (IRS Free Tax File Program delivered by Tax Slayer has the max age set to 57, while TaxAct has two offers this year, one for filers aged 20-58 and another for those aged 67 and up).
All offers can handle active military pay and the earned income tax credit. All but 1040Now and EzTaxReturn support for e-filing a state return in some or all states. Only FreeTaxUSA provides free federal and state filing for all states. And, only OLT and Tax Act let you file with the maximum allowable AGI of $73,000.
If you’re surprised that the government’s own free e-file services are fulfilled by third-party tax prep services with their own free versions, it does raise a question: Why bother with the IRS Free Tax File Program? Well,one benefit to using IRS Free File is some of these services include state filing for free. If eligible, the free state filing is a money-saving bonus over third-party service providers’ own free tier of service.
The flipside? You may not get all the features and help available if you went directly to that services’ site to file. Let’s take the example of TaxAct. What’s covered in the IRS Free File version of TaxAct and the service’s own free tier is the same, in terms of forms supported. But the free tier of TaxAct includes its TaxAssist tax pro assistance and charges $39.99 to file your state taxes, while the IRS Free File version includes a free state file for “some states,” and it lacks TaxAssist support.
In order to qualify for IRS Free File, you have to go through the IRS’ site. You won’t receive the same Free File benefits directly from a company’s website.
Once you complete your taxes, follow the service’s instructions to complete the last mile and E-File your taxes.
If the service doesn’t include the state return through the IRS Free File offer, you can either try to file the state return using that service separately,, or you can go to your state’s tax board and follow the instructions to file a state return directly through your state.
Free Fillable Forms
If you don’t want to use one of the Free File partner services, or your adjusted gross income is higher than $73,000, then the IRS’ Free File Fillable Forms are for you. Think of this as a truly do-it-yourself approach to getting your taxes done. Unlike the best tax preparation services that give you at least some prompts to nudge you in the right direction, the Free File Fillable Forms are simply electronic versions of the tax forms that you can fill out online.
You’ll start by going to IRS.gov and setting up an account. Don’t worry about the IRS holding your info indefinitely – all accounts and associated data are deleted shortly after the final filing deadline for a given tax year in October, and you need to open a new IRS account the next year.
Free Fillable Forms starts out with the digital version of the 1040 tax form, and then need to add forms at will to the return. Unlike paid tax prep services, you won’t get much in the way of friendly help, calculations, or explanations at IRS.gov. The only help available is a useful 25-page PDF that walks you through the process of using Free File Fillable Forms, line-by-line instructions for each form, and the IRS’ tax bulletins and other documents written in tax jargon.
Even the IRS states up front “you should know how to prepare your own tax return” if you use this service. Some forms have limitations and quirks that, depending on your tax situation, could make it harder to use the service.. Fortunately, the IRS outlines its known limitations.
Once you’re confident you have all the forms you need completed, you can start the process of preparing to E-File. This is a six step process unto itself. Begin with adding your W-2, 1099-R and/or W-2G information (but not 1099-MISC and other 1099 forms). Then you’ll add your withholding information, verify your identity (either with your previous year’s AGI or with last year’s five-digit self-selected signature PIN).
Next up is your electronic signature, creating a new five-digit Signature PIN, and verifying how you will pay your taxes due. After that, you can confirm your email, review the return — either electronically or by printing it — and then complete your E-File by transmitting your return to the IRS.
More from Tom's Guide
- Best tax software for 2023
- Tax deadlines — when you need to file
- H&R Block vs. TurboTax: Which is best for you?
