The Free File Alliance is a partnership between the Internal Revenue Service and twenty tax software companies. They have agreed to provide free and low cost tax software online for low income individuals.

Though the alliance has already been pared back a bit, you can still find free tax software on the internet. You only need to do a little research to find the sources to use.

Every year, members of the alliance post their free offerings on the Internal Revenue Service’s web site, www.irs.gov. In order to get the free, federal state income tax forms offers, you must link to the software company’s web site from the IRS’s site.

Some consumer advocates worry that the way this system is set up gives the government’s endorsement to companies.

When it began, participating companies had to offer free tax software program to at least ten percent of taxpayers. The idea was that they would offer the software to only low-income people, but they did not have to.

A new agreement has been implemented that requires the alliance members to offer free software to the seventy percent of taxpayers who have the lowest adjusted gross incomes. The idea was that they would offer the software to only low-income people, but they did not have to.

However, each individual company can offer free tax software to no more than fifty percent of the population, and that fifty percent must be within that seventy percent with the lowest incomes.

That means every company has to impose restrictions in addition to the income limitations. These new rules have led to a wide array of offers to be had, so even if you are making more than $50,000 per year, it may be worth it for you to check them out.

H&R Block is offering its federal income preparation tax software, as well as one state tax program and a federal e-filing to everyone, regardless of age or income. The only catch is that you have to get your refund on a prepaid Visa card.

It is still free if you won’t be getting a refund. This offer is not part of Free File. You must go to their web site to get it.

Intuit is now limiting its Free File offer to those making no more than $28,500 per year, as well as anyone eligible for the earned income tax credit and active-duty military personnel with incomes less than $50,000.

Intuit is offering a federal version of TurboTax Essentials for $9.95, which is cheaper than other versions of TurboTax, for those who don’t qualify for the other offer.

A clause in the new four-year agreement between the Internal Revenue Service and tax software companies providing free tax software is the stipulation that the IRS cannot develop its own tax software program.

Most of the software companies do charge a fee to file online, though the IRS does not charge a fee to receive it.