More about free e-filing


When I posted about Schumer’s stupidity on offering something free that we already got for free, I got this comment in response:
 
While I appreciate your enthusiasm greg, I’ve got to burst your bubble. Senator Schumer did indeed make e-filing free. Sure, you have always been able to file for free if you purchased software like TurboTax – because the filing fee is calculated into the price of the software (which by the way can be very expensive!). Now, you can file for free without a paid preparer or expensive software by going to irs.gov. This is definitely a smart move.
 
I am a curious person and very careful about what I post, but I have been wrong. So, I decided to examine the claims posted.
 
First, the irs.gov site claim that you can only now go to irs.gov and file for free, ala Schumer. I decided to go to the wayback machine again for the page: http://www.irs.gov/efile/article/0,,id=118986,00.html. This yields the results shown on this page: http://web.archive.org/web/*/http://www.irs.gov/efile/article/0,,id=118986,00.html.
 
I found that Jane was partially correct. As far back as 2006, those making under $50,000 were allowed to free e-file, while those making more were not. This year it was $54,000. It is now free for everyone through irs.gov. The question, however, is how many utilize irs.gov to e-file?
 
The next claim is tax software can be very expensive. Considering the top package, which is a bazooka for most people, is less than $100, I do not consider the software very expensive. For most, the packages at $45 or less are more than adequate. In comparison of a CPA, this is quite reasonable. But, the basic level for Turbo Tax has been less than $20 for years, and even cheaper online. TaxACT has offered free e-file with most, if not all, of it products for many years; TurboTax just joined this bandwagon last year, as far as I can tell. Prior to this, the cost was less than $10 to e-file.
 
The question at hand is whether or not I was overly enthusiastic? Perhaps, but I feel the bulk of the evidence weighs in my favor. The software is no prohibitive and the companies were already offering free e-file before Schumer stepped in. I have not yet investigated whether or not Schumer’s reduction at irs.gov has made a big difference, but I have my doubts that many making more than $50,000 were plunking down money for e-file without buying software.
 
One thing I will agree with my commentor on is the fact that e-file is included in the price of the boxed ware. THe price of TurboTax went up to about the same price as TurboTax plus efile last year, unless you do your return online. There it is all free.
 
Peace and Grace,
Greg
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