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5 Warnings About Using IRS Free File for Your Taxes, According to Finance Experts

There are a few things you should know before filing with the agency's program.

Even though there's no shortage of options for different types of services to help organize your taxes each year, IRS Free File stands out as a relatively unique tool. The agency's program allows qualifying users to file with a partnering software company's product free of charge, fulfilling your annual obligation and keeping cash in your pocket. But while the service can be particularly helpful for anyone looking to stay within their budget, there are a few things taxpayers should know before they use it. Read on for warnings about using IRS Free File for your taxes, according to finance experts.

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Not everyone is eligible to use it.

Shot of a young couple looking stressed while going over their finances at home

Naturally, any free tax filing option will appeal to most people if only because you don't have to pay for it. But even though the program seems like a simple solution, not everyone can use it.

"The very first warning should be that your Adjusted Gross Income (AGI) has to be under $73,000 to use it," says Elizabeth Buffardi, a certified public accountant and president at Crescendo Financial Planning. If your income exceeds this, she suggests considering another type of software before starting the process.

It's not the best fit for everyone's circumstances.

woman working from home with taxes

Part of the reason that IRS Free File doesn't cost anything is that it's a relatively stripped-down process that focuses on the critical information most people need to supply to the government. So if you're coming to the table with a more complicated set of finances, experts warn it might not be the best option for you.

"For more complex returns—such as when there's the sale of investments, the sale of a house, job changes, or ownership of a small business involved—using the IRS' free online program is not intuitive and can miss some vital information relating to the calculation of tax liabilities," Moira Corcoran, a certified public accountant and tax expert at JustAnswer, tells Best Life. This could lead to misreporting and other issues down the line.

READ THIS NEXT: IRS Warns Taxpayers About "Deeply Troubling" Credits That Could Get Them Audited.

You may have to restart the filing process if it doesn't work for you.


Preparing your taxes once a year is enough for most people. But if you've been shopping around for the right software and are opting for the simplicity of IRS Free File, you may end up having to repeat yourself if you're not careful.

"If you use a program within the Free File Alliance, you cannot upgrade to a paid tier later on at these various software companies," says Robert Farrington, founder and CEO of The College Investor. "Be careful where you start filing your taxes so you don't get stuck and end up having to start over at a different company later."

You're on your own when it comes to figuring out the process.

A young woman sits at a desk late at night and tries to work on her taxes. She looks discouraged as she reads a W-9 and other paperwork. Her laptop is open in the background.

Many people ultimately choose to pay for tax software or hire an outside professional simply because it can help remove some of the stress and confusion from the process. Unfortunately, there's no lifeline available if you get stuck while using the agency's free option.

"There's no additional assistance if you run into trouble or have tax questions," says Corcoran. "And it does not offer in-person help or have brick-and-mortar stores for additional assistance, either." She adds that this can be problematic because "some of the user interfaces are clunky or confusing."

This can be especially difficult if you're even vaguely unfamiliar with what needs to get reported and what doesn't. "If you don't exactly understand the questions, then you can get yourself in trouble," warns Buffardi, adding that she's had to help clients who've mistakenly entered and omitted information when using free software and weren't aware of the consequences.

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All the pressure is on you to get it right.

I've got all the paperwork here

Most people turn to sophisticated tax software to make the process easier overall, but the more robust programs can also provide extra assurance that you're doing everything right. And as a bare-bones option, Buffardi warns that this puts extra pressure on users to avoid errors and include all the necessary information.

"There's an old saying about online software: 'Garbage in equals garbage out.' This is very true," says Buffardi. "For example, I have met several clients who bought rental properties and then never depreciated them. We then had to go back and clean up the mess after the fact."

Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.

Zachary Mack
Zach is a freelance writer specializing in beer, wine, food, spirits, and travel. He is based in Manhattan. Read more
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