Dollars & Sense: There is such thing as free tax filing

Google the phrase "free tax filing" and the top three entries are most likely names you've heard: H&R Block, Turbo Tax and TaxAct. The only site that is 100 percent free doesn't show up until the fourth submission.

IRS.gov/freefile allows anyone to electronically file a federal tax return. You basically fill out tax forms as you would if they were printed out. Some of the pluses:

-- There are no income limitations.

-- Looks like blank IRS forms. You choose, self-prepare and e-file your 1040, 1040 A and 1040EZ return.

-- Includes basic calculation capability.

-- File your taxes any hour of the day or night.

-- Know that your return is safe and secure.

-- Receive a quick IRS confirmation, within 48 hours, that your return was received.

-- Get your refund in as few as 10 days with Direct Deposit.

-- File a free federal extension.

But unlike a lot of commercial tax-preparation sites, it doesn't include tax help.

"If you have a pretty basic return, this is a good option for you," said IRS spokesman Mark Green.

However, if you need help, there are still a lot of options.

One component of the Free File program provides free federal income tax preparation and electronic filing for taxpayers whose adjusted gross income is $57,000 or less in 2009. A partnership between the Internal Revenue Service and the Free File Alliance LLC, a group of private sector tax software companies, also offers free or paid state tax preparation and e-filing services.

Georgia is among the top five states using electronic filing.

"Last year, over 3 million Georgia residents chose to file their returns electronically," Greene said. "I urge more people to give it a try."

If for no other reason, he said, you'll get refunds back quicker, and mistakes in calculation or incorrect Social Security numbers won't be a factor.

That could eliminate the need for refund anticipation loans that in the current economy are probably more popular than ever. If you calculate the interest, these short-term loans can charge upward of 300 percent.

So even if you end up paying a small fee, you can be assured that the companies aligned with the IRS are legitimate tax preparers.

"I've seen used car lots and pawn shops that offer to do your taxes for free," Greene said. "If they're not certified and trained in the latest tax code, you could miss out on credits or run into other types of trouble."

He cited the Earned Income Tax Credit as an example.

Last year, Georgians were eligible for $2.2 billion in EITCs, but about 25 percent of those who qualified didn't apply for it.

With the average taxpayer earning more than $1,800 for the EITC, that's money you're entitled to.

"Just think of what you could do with that," Greene said. "Add to it the money you don't have to pay for an RAL, and you're looking pretty good."