IRS Free File Update for 2025
Last year I wrote about a valuable but little-known income tax filing option called IRS Free File. With the 2024 tax season upon us, now is a good time to remind readers about the program, and share what’s new in 2025.
Here’s a brief refresher: IRS Free File is a public-private partnership between the IRS and eight private-sector tax preparation companies. These companies provide free, secure online tax preparation and electronic filing services for eligible filers.
The capabilities of IRS Free File partners rival those of paid competitors like Intuit (TurboTax) and H&R Block. Not only does Intuit charge for the same services Free File partners offer for free, they use bait-and-switch tactics to upcharge customers for services they likely don’t need.
If you’re a cost-conscious retiree like me, paying for something you could have gotten for free drives you absolutely crazy. Read on to learn one way to avoid it.
IRS Free File
When I found out about IRS Free File in 2021, Intuit (TurboTax) had been my go-to vendor for years. I was hesitant to trade the familiar for the unknown, even with the promise of hundreds in savings.
Then I learned that in 2022 Intuit coughed up $141M to settle a multi-state lawsuit alleging it had overcharged customers with deceptive practices. My own experience with the product—dodging a minefield of paid extras just to prepare and file a simple tax return—clinched the deal.
This is the third consecutive year I’ve used Free File to file my federal and state income tax returns. I have no intention of ever going back to TurboTax, or any paid vendor for that matter.
New Partners
The IRS expanded its roster of trusted partners from six to eight in 2025. Here is a list of this year’s partners, and their eligibility requirements:
The partner I use is FreeTaxUSA, with which CanIRetireYet? has no affiliation financial or otherwise. Any mention of it here is incidental.
My tax situation was anything but simple in 2024. Yet for both my federal and state returns, FreeTaxUSA managed the complexity easily and accurately. Best of all, it cost me nothing to prepare and file my federal income taxes electronically (and just $14.99 to file a state return).
Depending on your eligibility criteria, you may also be able to file a state return for free.
Eligibility
IRS Free File eligibility requirements vary from partner to partner, and depend on factors such as adjusted gross income (AGI), your age, the state you live in, and/or whether you choose to file a state return.
According to the Free File website, the maximum AGI required for eligibility is $84K for the 2024 tax year (up from $79K for the 2023 tax year).
Digging Deeper
The $84K AGI maximum reported on the IRS website is wrong, albeit to the benefit of taxpayers.
For example, despite my AGI being $84K in 2024, FreeTaxUSA charged me nothing to prepare and file my federal return. (The graphic above indicates a maximum of $48K.)
Readers of last year’s post reported similar experiences with OnLine Taxes (OLT), another of the Free File partners listed above. These readers reported paying nothing to prepare and file their federal returns using OLT, even though their incomes were well above purported maximums.
The upshot is that what’s indicated on the Free File website may not square with reality. To see if you can file for free using a Free File partner, click through to the partner’s site to determine your actual eligibility.
Choose a Free File Partner Via the IRS Website
Make sure to follow the links on the IRS Free File website to choose your preferred partner, as you won’t be eligible for free services if you navigate directly to the partners’ websites.
Click the big blue Explore Free Guided Tax Software button.
You’ll be presented with two options: Browse all trusted partners and Find a trusted partner.
The Find a trusted partner option prompts you to enter criteria such as your age, AGI, state of residence and so on. Based on your input, it filters the list of trusted partners to those it believes you are eligible for free filing.
Given the discrepancies with maximum AGI I mentioned above, I recommend you choose Browse all trusted partners. Using the filtered list generated by the Find a trusted partner option might omit equally good, free options.
A Nitpick
One reader complained last year that the Free File partner she used (unspecified) didn’t support importing 1099s from 3rd party brokerage firms. Instead, she was required to transfer information manually from her 1099s.
Automatic data import is a convenient feature; one that I admittedly lost when I switched to FreeTaxUSA. But this was largely a one-time, upfront cost. FreeTaxUSA saves all my brokerage (and other) information from one year to the next. So all I have to do is enter the current year’s figures when preparing my return.
In addition, according to their websites, at least two Free File partners—TaxAct and TaxSlayer—support automated, 3rd party data import.
IRS Direct File
The IRS rolled out its own free filing option last year called IRS Direct File. Still in its infancy, Direct File’s capabilities are a lot more limited, and its eligibility requirements more restrictive, than those of Free File.
Direct File is currently available to residents of 25 states (up from 12 in 2024). Even if you reside in a participating state, you may not qualify under certain circumstances.
For example, taxpayers who made deposits to, or withdrawals from, an IRA and/or a Medical Savings Account (MSA), or who received distributions from an employee-sponsored retirement plan like a 401(k), are currently ineligible.
Given these restrictions, I suspect the majority of this blog’s readers will be unable or unwilling to use IRS Direct File. I only mention it here because it is worth keeping an eye on as the program continues to mature.
Don’t Forget to Get an Identity Protection PIN
Armed with your social security number and other publicly available information, scammers can file a fraudulent return claiming refunds or credits on your behalf.
According to the Taxpayer Advocate Service, the IRS suspended processing of nearly 2 million returns pending identity verification in 2024, signaling a huge increase in this type of fraud. Securing an Identity Protection (IP) PIN from the IRS can prevent it happening to you.
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[I’m David Champion. I retired from a career in software development in March 2019, just shy of my 53rd birthday. To position myself for 40+ years of worry-free retirement, I consumed all manner of early-retirement resources. Notable among these was CanIRetireYet?, whose newsletters I have received in my inbox every Monday morning since 2015. CanIRetireYet? is one of exactly two personal finance newsletters I subscribe to. Why? Because of the practical, no-nonsense advice I find here. I attribute my financial success in no small part to what I have learned from Darrow and Chris. In sharing some of my own observations on the early-retirement journey, I aim to maintain the high standard of value readers of CanIRetireYet? have come to expect.]
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I tried to create a pin through IRS.gov. I already have a login.gov account that I use to sign in to Social Security. The home page on SSA.gov states that I only need a Login.gov OR an ID.me account. Do I now need to also create and ID.me account just for creating a pin?
I used one of the IRS free file options this year and found it easy to use and filed my federal and state taxes for free. It was just as easy as TurboTax, which I had used for years and became frustrated with the constant badgering to pay more for extras. I also help a low income relative with taxes, and we were have used a free file option for 2 years. Low income taxpayers are particularly susceptible to the TurboTax “pay more and get more” pressures.
Hi Clare,
The short answer is no, you do not need to create an ID.me account to get an IP PIN. If you scroll down on the website I linked in the article, you’ll see a section titled Alternatives to online enrollment. One of these is to fill out/mail a paper form to the IRS, and the other is to set up an in-person appointment at a taxpayer assistance center.
Not super convenient, but if you want to secure an IP PIN without an ID.me account, it appears that is what you’ll have to do.
Hope this helps,
Dave
Helpful article! I’ve also used both TurboTax and FreeTax USA. They are both easy to use for my relatively straight forward tax situation. I agree that FreeTax USA has FAR fewer pop-ups selling additional services and costs MUCH less. Just like Turbotax, it remembers your info from the previous year which is really convenient.
I have been using FreeTaxUSA for a few years and have been happy with it. Federal returns are free for anyone, regardless of income, and state returns are $14.99.
Thanks for the informative article. Couple of things to comment on:
1. OLT & Freetax USA are *always* free (and always have been free) to file federal taxes for anyone, regardless of AGI. I think the only thing extra you get with these two if you qualify for IRS free is you also get free state filing, whereas normally there is a nominal fee with both of these to file a state tax return. So in some ways I’m surprised to see them as part of the Free File program as they have been free to everyone for years.
2. IMHO, the ability to import tax records from brokerages & banks can be a huge timesaver in many cases and shouldn’t be so easily handwaved away. Obviously for day traders this is important. Or, if you are using a robo advisor & you generate lots of tax loss harvesting transactions. I’m neither of these, but in my case, I sold a bunch of VTI last year that I had held for a while. Due reinvesting dividends, there were almost two dozen different lots that had to be accounted for, and these had to be individually entered as they were uncovered lots (for which the IRS doesn’t let you aggregate together). It was a huge timesaver (and accuracy saver) to be able to simply import these transactions into H&R Block tax software.
techbud,
Re: point 1, thanks to you (and others) for corroborating my findings on FreeTaxUSA and OLT. Bottom line: these services are free for federal returns regardless of AGI.
Re: point 2, even though your particular situation precluded it, I’m glad you mentioned the ability to aggregate stock/bond sales into short- and long-term lump sums. This saved me what would otherwise have been a lot of data entry on my 2024 return. I suspect most filers with capital gains/losses from stock/bond sales will be able to take advantage of this feature. For those who can’t, perhaps TaxAct or TaxSlayer, both of which claim to support 3rd party data import, is the way to go.
Best,
Dave
Sadly, you may not have a choice after this year unless the team of folks working on FreeTax have their terminations reversed. Musk fired them. Looks like the lobbyists for the paid services and the drive for privatization of government services prevailed on this one. At least, for now.
Yes, elections have consequences.
I used Turbotax for years and switched to Free Tax USA last year. I anticipated a small compromise in user experience in anticipation of you get what you pay for. But, wow, I have found the software to be way easier and intuitive than Turbotax, even when I have something a little more complex in my return.
Nice article. I’m doing Roth conversions regularly now so I’m bumping up to the low end of the 24% bracket. Is this too high income to use these free tools? I tried them a few years ago and was disqualified pretty quickly so I’ve mostly ignored these options.
Hi Wade,
According to my personal experience (with FreeTaxUSA), and the experiences of others here in the comments (FreeTaxUSA and OLT), there are no income limits (or at least not as low as advertised on the IRS website).
I would recommend trying again to see if you qualify.
Best,
Dave
any idea if freetaxusa can handle rental properties?
Yes, FreeTaxUSA can handle property rental income!
I’ve gotten lazy with the the ability to upload my brokerage info on Turbo Tax but I will look further into your suggestions. Thank you.
Chris, on another note, I always look forward to Darrow’s updated portfolio post in January of each year, that he has been doing for many years. I did not see it this year though. Does he have plans to share?
K,
He has been head down working on getting a memoir he’s been working on for the past few years published. For that reason, he has no current plans to contribute to the blog. I will pass this on to him and I hope he will contribute to the blog in the future.
Best wishes,
Chris
Thanks for the info. Maybe he will consider coming back and updating us in January 2026! I do enjoy the blog and thank you for your contributions!!
Need to confirm but I found that you may need to set up a separate user ID / pwd if you are using the freetaxusa.com/freefile2024 site vs. using the freetaxusa.com (non-free file site). I have done taxes for family members and some have qualified for freefile and others not. I needed to know ahead of time and set up the credentials at the correct freetaxusa site accordingly.
Pete,
According to the IRS Free File website (linked here), you must navigate to FreeTaxUSA, or any of the Free File partners for that matter, via the IRS Free File site to qualify for free services. Navigating directly to the partner site will not work.
Best,
Dave
Navigating to the link I indicated at freetaxusa.com/freefile2024 does work without going directly to the IRS site first. However, I understand your point.
Little known? This surprises me. And what about https://www.freefilefillableforms.com ?