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April 7, 2012

Don't forget: You can file your taxes for free

By Ed Black ----

As the income tax deadline approaches, you may be ... rushing to collect documents and file on time. This year, you have two reasons to breathe more easily: There are two extra days to file, since the deadline was moved to April 17; and you are probably eligible to submit both your federal and state taxes for free, thanks to the Free File program.

The IRS Free File Alliance (freefile.irs.gov) is an innovative public-private partnership between the IRS and multiple private companies that lets people across the country prepare and file their taxes for free, using brand-name software. Michigan is one of 22 states that also offers a state Free File program, mirrored on the federal effort. ...

... (T)he software companies that participate in Free File determine the criteria for who can use their product for free. Generally it's lower- and moderate-income taxpayers, young people and seniors, those eligible for the Earned Income Tax Credit, and active-duty military. Most taxpayers with an adjusted gross income of $57,000 or less qualify to file their taxes through Free File.

Free File is a win-win for citizens' pocketbooks and cash-strapped governments. By using Free File, people can be sure that they have identified and claimed all the tax credits and deductions that they deserve, especially the EITC. As many as one in four people who qualify for the EITC don't claim the money they deserve, just leaving it in IRS' bank account. ...

In addition, Free File makes electronic tax filing easy, which saves money, reduces errors and speeds up refunds. Brand-name companies donate their software through Free File so it doesn't cost the government a dime. And because it encourages online filing, which is cheaper and quicker for the government to process than paper returns and reduces the number of errors, Free File has actually saved the Internal Revenue Service more than $104.8 million in processing costs, according to the U.S. Government Accountability Office (GAO). In Free File states like Michigan, state governments also see these cost-saving benefits.

That's why Free File is a win-win; it gives a helping hand to hard-working families without harming the nation's economic health. ...

(I)f you can use a computer, then preparing your own taxes with Free File is easy and quick. Just gather the tax forms sent to you by your employer (like a W-2) and your bank (IRS Form 1099). The software will walk you through a series of questions like "Are you married?" and "Do you support any children?" to collect the information necessary to prepare your return. While it may seem daunting at first, you could be finished in as little as 15 minutes and save hundreds of dollars.

With Free File, the tax software industry has prepared more than 33 million free tax returns over the past 10 years.

Of the 138 million taxpaying households in the U.S., 70 percent are eligible to save money with Free File.

Visit freefile.irs.gov and click on "get started" to see if you qualify.

About the author: Ed Black is president and CEO of the Computer & Communications Industry Association (www.ccianet.org).

About the forum: The forum is a periodic column of opinion written by Record-Eagle readers in their areas of interest or expertise. Submissions of 500 words or less may be made by e-mailing letters@record-eagle.com. Please include biographical information and a photo.

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