Doing taxes may not be fun, but at least it can be free to e-file

Taxpayers who file returns early are usually motivated by a desire to get refunds as quickly as possible, and that desire will be particularly strong this year. In more prosperous times, a big tax refund meant a trip to Disney World; these days, it's a mortgage payment.

If you file your tax return electronically and arrange for direct deposit, you can get your refund in as little as 10 days, vs. up to six weeks if you file by mail. And if you don't want to pay someone to prepare and e-file your taxes, there are several ways you can get the job done for free. Here's a look at what's available for the budget-minded taxpayer:

•IRS Free File. This partnership between the IRS and private tax-preparation companies is designed to encourage more taxpayers to e-file their returns. The program is open to all taxpayers with adjusted gross incomes of $57,000 or less on their 2009 tax returns.

This year, 19 private companies and a legal aid society are participating in Free File. Each has its own eligibility requirements. Some, for example, limit their services to taxpayers age 50 or younger; others are available only in certain states.

All the programs offer tax preparation and e-filing for one federal tax return. However, you may have to pay if you want to prepare and e-file a state return.

To take advantage of this program, you must go through www.irs.gov/freefile, not the participants' websites.

•Free File Fillable. This program, also at www.irs.gov/freefile, provides electronic versions of tax forms, and there are no income restrictions. The program will do the math for you, but it doesn't offer the kind of guidance you get from most private tax software programs. "We think it's most likely to be used by people who are pretty comfortable completing tax returns themselves," says David Williams, IRS director of electronic tax administration. When you're done filling out the forms, you can file them electronically.

•TaxAct Free Federal. At www.taxact.com, this program allows you to prepare, print and e-file one federal return. It provides the same tax forms available through the company's paid product, TaxAct Deluxe.

•Free H&R Block At Home. This program, which allows you to prepare and e-file one federal tax return, is designed for taxpayers with uncomplicated returns. It doesn't include tax forms for self-employed taxpayers or those who have rental income. Get it at www.hrblock.com.

•TurboTax Free Edition. Like H&R Block's free program, this is designed for taxpayers who have straightforward returns and don't need a lot of hand-holding. It can be downloaded at www.turbotax.com.

Last year, participation in Free File fell about 30%, but the number of taxpayers who e-filed increased, Williams says. He attributes the decline in Free File to the growth of free products outside the IRS program. Free File, now in its eighth year, "has forced these companies to at least start with a free model," he says.

There are some differences, though. When you use a free program that's not affiliated with Free File, you can expect to see a lot of suggestions that you upgrade to a paid version of the product, along with pitches for other products and services.

The IRS prohibits Free File providers from marketing refund anticipation loans and other products that aren't related to tax preparation, Williams says. They're allowed to include a link to their paid tax-preparation products in their Free File offerings, he says, but they can't e-mail you offers for their products without your consent.

Not all can e-file

Taxpayers who are eligible to claim the home buyer's credit will not be able to e-file this year, the IRS says. That's because those taxpayers must attach documents to their tax returns that aren't available electronically.

In November, Congress extended the $8,000 first-time home buyer's credit through April 30 and added a $6,500 credit for home buyers who have lived in their existing home for at least five years. In response to reports of widespread fraud, the law also requires taxpayers who claim the credit to attach a copy of their settlement statement, along with Form 5405, to their tax return.

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However, if you plan to claim the credit, you don't have to get out your No. 2 pencil and fill in the little boxes on a paper return. You can use Free File — or any tax software program — to prepare your tax return, print it out and mail it to the IRS.