Last year I wrote about a valuable but little-known income tax filing option called IRS Free File. With the 2024 tax season upon us, now is a good time to remind readers about the program, and share what’s new in 2025.
Here’s a brief refresher: IRS Free File is a public-private partnership between the IRS and eight private-sector tax preparation companies. These companies provide free, secure online tax preparation and electronic filing services for eligible filers.
The capabilities of IRS Free File partners rival those of paid competitors like Intuit (TurboTax) and H&R Block. Not only does Intuit charge for the same services Free File partners offer for free, they use bait-and-switch tactics to upcharge customers for services they likely don’t need.
If you’re a cost-conscious retiree like me, paying for something you could have gotten for free drives you absolutely crazy. Read on to learn one way to avoid it.
IRS Free File
When I found out about IRS Free File in 2021, Intuit (TurboTax) had been my go-to vendor for years. I was hesitant to trade the familiar for the unknown, even with the promise of hundreds in savings.
Then I learned that in 2022 Intuit coughed up $141M to settle a multi-state lawsuit alleging it had overcharged customers with deceptive practices. My own experience with the product—dodging a minefield of paid extras just to prepare and file a simple tax return—clinched the deal.
This is the third consecutive year I’ve used Free File to file my federal and state income tax returns. I have no intention of ever going back to TurboTax, or any paid vendor for that matter.
New Partners
The IRS expanded its roster of trusted partners from six to eight in 2025. Here is a list of this year’s partners, and their eligibility requirements:
The partner I use is FreeTaxUSA, with which CanIRetireYet? has no affiliation financial or otherwise. Any mention of it here is incidental.
My tax situation was anything but simple in 2024. Yet for both my federal and state returns, FreeTaxUSA managed the complexity easily and accurately. Best of all, it cost me nothing to prepare and file my federal income taxes electronically (and just $14.99 to file a state return).
Depending on your eligibility criteria, you may also be able to file a state return for free.
Eligibility
IRS Free File eligibility requirements vary from partner to partner, and depend on factors such as adjusted gross income (AGI), your age, the state you live in, and/or whether you choose to file a state return.
According to the Free File website, the maximum AGI required for eligibility is $84K for the 2024 tax year (up from $79K for the 2023 tax year).
Digging Deeper
The $84K AGI maximum reported on the IRS website is wrong, albeit to the benefit of taxpayers.
For example, despite my AGI being $84K in 2024, FreeTaxUSA charged me nothing to prepare and file my federal return. (The graphic above indicates a maximum of $48K.)
Readers of last year’s post reported similar experiences with OnLine Taxes (OLT), another of the Free File partners listed above. These readers reported paying nothing to prepare and file their federal returns using OLT, even though their incomes were well above purported maximums.
The upshot is that what’s indicated on the Free File website may not square with reality. To see if you can file for free using a Free File partner, click through to the partner’s site to determine your actual eligibility.
Choose a Free File Partner Via the IRS Website
Make sure to follow the links on the IRS Free File website to choose your preferred partner, as you won’t be eligible for free services if you navigate directly to the partners’ websites.
Click the big blue Explore Free Guided Tax Software button.
You’ll be presented with two options: Browse all trusted partners and Find a trusted partner.
The Find a trusted partner option prompts you to enter criteria such as your age, AGI, state of residence and so on. Based on your input, it filters the list of trusted partners to those it believes you are eligible for free filing.
Given the discrepancies with maximum AGI I mentioned above, I recommend you choose Browse all trusted partners. Using the filtered list generated by the Find a trusted partner option might omit equally good, free options.
A Nitpick
One reader complained last year that the Free File partner she used (unspecified) didn’t support importing 1099s from 3rd party brokerage firms. Instead, she was required to transfer information manually from her 1099s.
Automatic data import is a convenient feature; one that I admittedly lost when I switched to FreeTaxUSA. But this was largely a one-time, upfront cost. FreeTaxUSA saves all my brokerage (and other) information from one year to the next. So all I have to do is enter the current year’s figures when preparing my return.
In addition, according to their websites, at least two Free File partners—TaxAct and TaxSlayer—support automated, 3rd party data import.
IRS Direct File
The IRS rolled out its own free filing option last year called IRS Direct File. Still in its infancy, Direct File’s capabilities are a lot more limited, and its eligibility requirements more restrictive, than those of Free File.
Direct File is currently available to residents of 25 states (up from 12 in 2024). Even if you reside in a participating state, you may not qualify under certain circumstances.
For example, taxpayers who made deposits to, or withdrawals from, an IRA and/or a Medical Savings Account (MSA), or who received distributions from an employee-sponsored retirement plan like a 401(k), are currently ineligible.
Given these restrictions, I suspect the majority of this blog’s readers will be unable or unwilling to use IRS Direct File. I only mention it here because it is worth keeping an eye on as the program continues to mature.
Don’t Forget to Get an Identity Protection PIN
Armed with your social security number and other publicly available information, scammers can file a fraudulent return claiming refunds or credits on your behalf.
According to the Taxpayer Advocate Service, the IRS suspended processing of nearly 2 million returns pending identity verification in 2024, signaling a huge increase in this type of fraud. Securing an Identity Protection (IP) PIN from the IRS can prevent it happening to you.
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Valuable Resources
- The Best Retirement Calculators can help you perform detailed retirement simulations including modeling withdrawal strategies, federal and state income taxes, healthcare expenses, and more. Can I Retire Yet? partners with two of the best.
- Monitor Your Investment Portfolio
- Sign up for a free Empower account to gain access to track your asset allocation, investment performance, individual account balances, net worth, cash flow, and investment expenses.
- Our Books
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[I’m David Champion. I retired from a career in software development in March 2019, just shy of my 53rd birthday. To position myself for 40+ years of worry-free retirement, I consumed all manner of early-retirement resources. Notable among these was CanIRetireYet?, whose newsletters I have received in my inbox every Monday morning since 2015. CanIRetireYet? is one of exactly two personal finance newsletters I subscribe to. Why? Because of the practical, no-nonsense advice I find here. I attribute my financial success in no small part to what I have learned from Darrow and Chris. In sharing some of my own observations on the early-retirement journey, I aim to maintain the high standard of value readers of CanIRetireYet? have come to expect.]
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