Tax season is in full swing, and with the April 15 deadline approaching, many Americans are still deciding how to file. With multiple options available, financial experts say taking advantage of tax credits and free filing programs could help taxpayers save money.
Some, like Akshay Kalra, haven’t even started thinking about their returns.
“There’s a lot going on, so it’s hard to pay attention to that stuff right now,” Kalra said. “Honestly, I’m not even sure when the deadline is.”
For others, like financial expert LaRese Purnell’s clients, taxes are the only thing on their minds.
“When we started to just hear a lot in the media around the IRS. I think that people, it was out of fear,” Purnell said. “And it wasn’t just people wanting to file their taxes. It was a lot of questions.”
Recent mass layoffs at the IRS have raised concerns, prompting some taxpayers to file early.
“It’s just a very nervous time,” said Annette Bowman. “I’m not sure what’s going to happen. Just taking it one day at a time and doing the best I can with it.”
The IRS estimates that the average taxpayer spends 13 hours and $290 filing their return. But depending on income, free help is available.
If you earn up to $67,000 annually, you may qualify for assistance through the IRS’s Volunteer Income Tax Assistance (VITA) Program. The IRS Free File program is also available to taxpayers with an adjusted gross income of $84,000 or less, offering software like TaxAct, TaxHawk, and TaxSlayer at no cost.
While tax software often advertises free filing, Purnell warns that costs can quickly add up.
“It starts out, they collect all your information [and] you get to the end, well, that’s going to be $49 because they upsold you on an additional schedule that you weren’t aware of,” he said.
For those paying more than $200 to file, Purnell recommends consulting a tax professional to ensure all eligible deductions are claimed.
“It’s not free. Read the small print,” he said. “They say you pay your IRS bill, but you leave the IRS a tip in most cases.”
Experts say preparation is key to reducing taxable income. Contributing to a 401(k), a Health Savings Account (HSA) for medical expenses, and a Flexible Spending Account (FSA) for childcare can all lower tax liability. Keeping itemized receipts of charitable donations can also help.
Filing early could be another smart move, given IRS staffing changes.
For those still filing, experts recommend researching free options, staying organized, and taking advantage of tax credits to ensure they don’t waste their money.
