Are Free Online Tax Filing Services a Scam?

If you are like me, you've seen the ads offering free online tax preparation, and thought, "What's the catch?" Is this a phishing scam, or some other type of identity theft rip-off? After doing some research, the answer is no. This is a legitimate service. So, if now you're wondering, "OK, then how do they make money?" The answer is the free service is only free if your Adjusted Gross Income (which is your income after you have taken your deductions) is under $56,000. If your AGI is $56,001 or higher, there is a fee to file. Those fees start at $10 and go up. Additionally, the free service is only for your Federal tax return. If you want to file your state return, you will also incur a fee of $10 and up for that service.

Even though this is a legitimate service, there are a few things you should do to protect yourself from scams. First of all, make sure the company you use is and authorized IRS e-file provider. Secondly, make sure they use an encrypted SSL server to transmit your information. Finally, make sure their privacy policy states that they won't share your information with anybody other than the IRS. If the service you choose is legit, all this information will appear on their home page.

Free online tax filing services offer many benefits, such as:

· Simple and fast tax filing
· No software to download, so you can use any computer that has an internet connection
· No risk of calculation errors or illegible returns (which are issues that might get you audited)
· Less expensive, and easier to use than software
· Faster refunds, and the option of direct deposit
· If you owe money, you can file now, and send the check later
· Safer and more secure than sending your returns through the mail

The downside is, for most people, filing your taxes won't actually be free. However, you can feel confident that free internet tax filing is a legitimate service you can trust.

We have researched the available options for free online tax filing. We considered security, privacy, ease of use, quality of service, and cost, as the criteria for rating each company. To find out which service is the best, visit our free tax help site by clicking the link below.