In the past, the Internal Revenue Service has been playing a game of class warfare and only allowing families with gross adjusted incomes of less than $50,000 for year to file their taxes online (e-file) for free. For 2009 and beyond, the IRS has ended the $50,000 ceiling and is now allowing anyone, regardless of income, to e-file for free.
This is a welcome change, considering that those who earn over $50,000 pay much more in taxes than those who don’t and their taxes are likely a lot more complicated than someone who earns less than that dollar amount. This might also help the statistic that the United States has the lowest electronic filing rate of any of the developed nations.
Many of the tax preparation firms have already moved on this new opportunity and are advertising their free e-filing services to customers. For example, TaxCut by H&R Block is advertising that they will offer free federal e-filing for anyone, with any type of return, at any income level. TurboTax is offering free e-filing for those with only 1040EZ forms and other less-complicated returns. TaxACT is also offering a free preparation and e-filing service.
This change in policy will probably dramatically increase the percentage of those who file their taxes electronically, and save the IRS a lot of money because there will be less manual processing of returns and there will be fewer mistakes since all of the calculations are electronic.
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