IRS Free File to make taxes less taxing for students

The IRS has partnered with numerous tax software companies to provide Free File, name-brand software that allows students, as well as those with an income of less than $58,000 a year, to file their taxes for free. “Take advantage of the Free File program,” said Dan Boone, IRS media specialist. “It’s definitely an easy and secure way to file your tax returns.”

When using Free File, filers can have the system choose a company that is on the list for them, or they can choose a company on the list themselves.

There are 17 Free File companies to choose from, including H&R Block, FreeTaxACT, Turbotax Freedom Edition, and TaxSimple.

Filers have the option to either e-file or print their return and mail it in to the IRS. Free File consists of questions and answers about the filer’s life and work.

According to Boone, e-filing is the quickest method of filing taxes. When e-filing, the tax return is directly deposited into your bank account within 10 days. Electronic receipts are also given with e-filing.

When mailing in a paper return, the error rate is 20 percent. A check will be mailed to the filer, but it could take several weeks to receive it. With a paper return, there is no confirmation from the IRS.

“As long as you type in the correct numbers that it asks for,” Boone said, “you should get an error-free return.”

When filing, students should be aware that some scholarship income, ROTC funding and payments made to Tech may or may not be taxable. If it’s used for tuition and fees, then it’s not taxable. If it’s used for room and board, then it does become taxable.

“Students or parents should get a form 1098T from the University that will show both their expenses for college,” Boone said, “some of which may be deductible. It should also show any scholarship income.”

According to Boone, there are different tax credits for college tuition and fees. One is called the American Opportunity Credit, which is worth up to $2,500 in tax credits. It’s available to some completing extensive undergraduate work. The other is called the Lifetime Learning Credit and is offered to graduate students.

When filing, you have a choice of taking a credit or a deduction-but not both. There is a deduction for up to $4,000 in tuition fees available on the front of the tax return. A tax credit reduces how much you owe to the IRS.

“It’s important for anybody who has a taxable income to report their income and file a tax return,,” Boone said, “if they are required to legally. And of course in some cases, it will be important to file a tax return because you might get money back from the government that you didn’t expect.”

Those who are filing should have their W-2 forms from their job and any income records for self-employment. Boone recommends filers to keep a copy of all tax records.

“When preparing your return,” Boone said, “print off a copy of Free File, and staple your W-2 and other tax documents to that. Keep it in a file where you’ll know where it is, in case a question comes up.”

Those who make more than $58,000 a year still have the option to use Free File. They go to the form, which is set up much like a tax form on the computer screen. The filers have to plug-in numbers on the on-screen form. The computer will do the math, and it’s still free.

“I would highly recommend using the software,” continued Boone. “And there are companies out there that will offer free e-filing for anybody at any income level, not through the Free File program but on their own.”

When filing taxes, filers should be aware of phishing scams, which send an e-mail claiming to be a company in an attempt to obtain the receivers’ private information in order to steal their identities.

“There are scammers out there who send e-mails out that are apparently from the IRS,” Boone said, “and the IRS will never e-mail you about your taxes.”

The deadline to file taxes this year is April 18, instead of April 15, due to Emancipation Day in Washington D.C.

“We highly recommend not waiting until the very last minute,” Boone said, “because typically, people who wait until the last minute makes the most mistakes.”

Filers can now check their refund status by downloading IRS2Go, a free application for the Droid and iPhone. Enhancements are expected in the future.

For more information, call 1-800-829-1040, or visit www.irs.gov.