A married couple in Ohio earning $85,000 a year could file their federal tax return for free this season. So could a single freelance graphic designer in Texas making $52,000, or a retired teacher in Florida living on $38,000 in pension income. The IRS says all of them qualify for its Free File program, which provides guided tax-preparation software at no cost to anyone with an adjusted gross income of $89,000 or less. That threshold, up from $84,000 last year, covers roughly two-thirds of all individual filers.
And yet, millions of people who qualify will pay $100, $150, or more this filing season for commercial software that does the same thing. The reasons are a tangle of confusing eligibility rules, aggressive commercial marketing, and the recent loss of the government’s own filing tool. Understanding how the free options work, and where they fall short, can save a qualifying household real money in the next few weeks.
How Free File works (and where it gets complicated)
The setup is straightforward on paper. You visit the IRS Free File landing page, confirm your AGI is at or below $89,000, and browse a directory of partner offers. Eight commercial tax-prep companies participate, each providing interview-style software that walks you through your return and e-files it with the IRS at zero cost.
The complication is that every partner stacks its own restrictions on top of the income cap. One might limit access by age. Another might exclude your state. A third might not support the forms your return requires. You can clear the $89,000 bar and still get bounced by a specific partner, at which point that company’s website is happy to sell you its paid product instead. The IRS directory lists all eight offers in one place, but matching your situation to the fine print takes patience and a willingness to try more than one option.
Two other free paths are worth knowing about. Free File Fillable Forms is a bare-bones electronic option with no guided prompts. It works for people comfortable filling out IRS forms on their own. And the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs provide in-person help at community sites nationwide, generally for filers with incomes under $67,000 or those 60 and older.
What happened to Direct File
During the 2024 filing season, the IRS launched a pilot called Direct File: a government-built, guided tool that let eligible taxpayers prepare and submit returns without routing through any commercial partner. It operated in a limited number of states and covered relatively simple return types, but it was the first time the IRS offered its own end-to-end filing software, free of the partner-eligibility patchwork.
That tool is no longer available. A GAO decision (B-337954) documented the Treasury Department’s action to suspend it. No public timeline for reinstatement has appeared in official records as of spring 2026. The shutdown drew sharp criticism from tax-policy advocates who viewed Direct File as the clearest route to genuinely frictionless free filing. For now, filers who hit a wall with one Free File partner can try another or fall back on Fillable Forms, but there is no government-hosted guided alternative.
Why eligible filers still pay
A 2022 Government Accountability Office report (GAO-22-105236) laid out the structural reasons. The layering of partner-specific restrictions on top of an income cap made it difficult for many taxpayers to know in advance whether they qualified. The IRS had limited visibility into how partners designed their websites and marketed upgrades, leaving room for user experiences that could steer people toward paid tiers before they realized a free option existed.
The problem goes deeper than confusing interfaces. In 2019, ProPublica’s investigative team documented how Intuit, the maker of TurboTax, deliberately hid its Free File landing page from search engines, making the free version nearly invisible to the people it was supposed to serve. Intuit later agreed to a $141 million multistate settlement over those practices. The episode exposed a tension baked into the program’s design: the IRS depends on commercial tax-prep companies to deliver free filing, but those same companies profit when users choose paid products instead.
Brand familiarity reinforces the cycle. Many filers start on Google or go straight to a company’s website rather than beginning at IRS.gov. Once inside a commercial product’s interface, the path of least resistance is to keep clicking, even when an upgrade prompt appears. According to listed retail prices as of spring 2026, popular mid-tier packages can run roughly $100 to $200 or more when you add federal and state preparation together, a significant expense for households that did not need to spend anything.
The state-return gap
One detail that catches filers off guard: Free File covers federal returns only in most cases. Some partners include a free state return for filers who meet additional criteria, but many do not. That means you can successfully prepare a federal return at no cost and still face a fee for the state portion. Before assuming the entire process is free, check whether your state’s department of revenue offers its own no-cost e-filing portal, or whether your chosen Free File partner includes state preparation in its offer.
A step-by-step approach for this filing season
1. Check your 2025 AGI. Look at Line 11 of your 2025 Form 1040 (or your most recent tax transcript if you haven’t filed yet). If it’s $89,000 or less, you’re within the Free File income threshold.
2. Start at IRS.gov, not Google. Go directly to the IRS Free File offer page. Starting there ensures you land on a vetted partner’s free product, not a look-alike paid version.
3. Read each partner’s eligibility details. Click through the offers and check for age, state, and form-type restrictions. If one partner turns you away, try another before assuming you need to pay.
4. Consider Fillable Forms if you know your way around tax forms. If no guided partner fits your situation but your AGI qualifies, Free File Fillable Forms lets you complete and e-file federal forms electronically at no cost.
5. Look into VITA or TCE for in-person help. If you prefer working with someone face to face, the IRS VITA/TCE locator can help you find a nearby site.
6. Handle your state return separately if needed. Check your state’s department of revenue website for a free e-filing option before paying a commercial product for state preparation.
What you’re really deciding when you click “upgrade”
No public dataset currently shows exactly how many eligible filers paid for commercial software in a given year. The widely cited figure of $150 or more reflects approximate retail pricing for popular products, not a line item in IRS data. The GAO’s 2022 report confirmed that Free File uptake was low relative to the eligible population, but it did not publish a dollar figure for collective missed savings.
Still, the practical math is hard to ignore. If even a fraction of the tens of millions of filers below the $89,000 threshold are paying for software they could use for free, the aggregate waste runs into the hundreds of millions of dollars every filing season. The free options are broader than most people realize. The obstacles, real as they are, can be navigated. And the single easiest step anyone can take is to start at IRS.gov instead of typing a brand name into a search bar. That one choice, made before you enter a single W-2, is often the difference between paying nothing and paying $150 you never owed.
