IRS Free File can make tax season easier on people filing for the first time

COVID Tax Tip 2022-28, February 22, 2022

Many people will be filing federal tax returns for the first time this year. This includes people who don't normally file and now need to file a 2021 return to claim a recovery rebate credit or reconcile advance payments of the child tax credit. For these taxpayers, IRS Free File may be the perfect solution.

For eligible individuals who want to prepare their own taxes, IRS Free File features electronic tax preparation software providers. This program provides free tax preparation, free electronic filing and free direct deposit, which is the fastest way to get a refund. People can also directly access IRS Free File from their mobile device using the IRS2Go app.

The IRS Free File adjusted gross income limit for 2021 is $73,000 for families and individuals. This year, there are eight IRS Free File products in English and two in Spanish. Each provider sets additional eligibility requirements, generally based on age, state residency and income.

Taxpayers using IRS Free File for the first time will need a few things before starting:

  • Their Social Security number.
  • Their wage and income information. This is usually found on forms from their employer, such as Form W-2 and Form 1099.
  • Verification they are not claimed as a dependent on any other return. For example, taxpayers whose parents are claiming them as a dependent may still file a separate tax return, but they cannot claim themselves as a dependent.
  • Documentation for all tax credits and deductions. Keep in mind, with the current higher standard deduction, itemized deductions may not be necessary.
  • Prior year adjusted gross income or self-select PIN. They need this information to validate and sign the tax return. This is required for all electronic tax returns as part of the user's electronic signature. Taxpayers who are first-time filers over the age of 16 can simply enter "0" as their prior-year income for signature purposes. For taxpayers who have filed before, their prior-year tax return will show their adjusted gross income.
  • Bank account and routing number for direct deposit of any refund into their account. This is the fastest and safest way to get their money.

Taxpayers who must reconcile advance payments of the child tax credit or who are eligible for a recovery rebate credit will need certain letters they received from the IRS. Individuals will need to know the total amount of their third-round Economic Impact Payment, including any "plus-up" payments they received to determine their eligibility to claim a recovery rebate credit. They will also need the total amount of advance child tax credit payments they received to claim their full credit.

To find the total amounts of advance child tax credit payments and third Economic Impact Payments received, taxpayers can check:

  • Online Account: Taxpayers can create or log in to their IRS Online Account to see the total amounts for these payments. For married individuals filing a joint return with their spouse, each spouse will need to log into their own Online Account or review their own letter for their portion of the couple's total payment.
  • IRS letters: In late December 2021 and early January 2022, the IRS started sending the following letters to the address on record for applicable taxpayers:
    • Letter 6419, 2021 Advance CTC, went to individuals who received advance child tax credit payments. The letter contains the total payment amount that the individual needs to file accurately and avoid a processing delay.
    • Letter 6475, Your Third Economic Impact Payment, went to individuals who received a third Economic Impact Payment in 2021, including initial and "plus-up" payments. This letter will help them determine if they are eligible to claim the 2021 recovery rebate credit for a missing third payment. If so, they must file a 2021 tax return to claim this credit.

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