The federal government is required to reimburse you for the overpayment of income taxes when you file a tax return, but costs involved with the tax-filing process can eat into your refund. The Internal Revenue Service does not charge fees to accept tax returns; filing costs arise from tax-preparation fees and the cost of sending a return to the IRS. Electronic filing is the cheapest filing option, because everyone can file a tax return online for free.
You have two options for filing your income tax return: e-filing and paper filing. Paper filing requires you to print out paper forms and pay for postage to mail the forms to the IRS. Complicated returns can require dozens of pages and forms. When you e-file, you submit your tax information to the IRS online. While both methods are relatively inexpensive, e-filing is free -- aside from any costs you have for Internet access.
Tax Preparation Services
The cost of filing a return can be much higher than the basic cost of sending a return to the IRS if you use tax-preparation services to help you fill out and submit your return. Preparation companies offer software that guides you through the process of filling out required forms and submitting them to the IRS. Tax software may cost money to use and providers may charge extra if you have a complicated tax return. Several tax-preparation software providers let you file your return for free if you make $57,000 or less, as of publication, although they may charge you to file state tax returns.
If you make more than $57,000 a year or you have a complicated tax return, you might not be able to find tax software that lets you prepare and submit a return for free. In this case, you can still file your return for free using Free File Fillable Forms. Fillable forms are electronic versions of IRS paper forms that the government lets you complete and submit online. Tax-preparation software may provide certain special features and guidance that are not available when you use fillable forms. In addition, IRS fillable forms are only valid for federal tax returns, while tax-preparation software typically allows you to file federal and state returns.
Tax-filing options can change over time based on available technology. From 1997 to 2005, the IRS offered a TeleFile program that let taxpayers file simple returns over the phone. TeleFile was discontinued after August 16, 2005, because of declining use and the rising popularity of e-filing.
Gregory Hamel has been a writer since September 2008 and has also authored three novels. He has a Bachelor of Arts in economics from St. Olaf College. Hamel maintains a blog focused on massive open online courses and computer programming.