IRS Free File Alliance, Walmart, and more: plenty of options for free federal tax returns

Earlier this week, Walmart announced that it will provide free tax preparation and free filing of 1040EZ returns in many of its locations this tax season.

The free tax filings are being provided by tax preparer H&R Block at their 250 in-store kiosks through Feb. 29. They will also be provided at Jackson Hewitt kiosks throughout tax season, and Jackson Hewitt will add approximately 800 kiosks to local Wal-Mart stores to bring its total to 2,800 this tax season. Notably, this free tax offer is only applicable for those filing 1040EZ tax forms, which are typically filed by taxpayers with returns with little to no deductions or complexity in their return, including no itemized deductions.

In a press release, Daniel Eckert, vice president of Wal-Mart Financial Services, said, "Customers need to make every dollar count in this tough economy, and that's why we're committed to helping customers pay less for their financial services during tax season and throughout the year."

The Walmart program began this week.

What's interesting, however, is that Walmart is making this look as though it was "something special." It's not. Arguably the world's largest retailer, Walmart is making good PR with this announcement. There are a number of alternatives, though.

The IRS is offering what it calls "Free File: Do Your Federal Taxes for Free." According to the IRS FAQ on Free File,

"Free File is a free, federal income tax prep and electronic filing program for eligible taxpayers, developed through a partnership between the IRS and the Free File Alliance, a group of private sector tax software companies. Taxpayers can do their federal income tax returns using commercial online software provided by the Free File Alliance companies. You must go to IRS.gov to access Free File. This year, you have until April 17, 2012, to file and pay your taxes or request an extension."

In addition, the Free File program is not restricted to the 1040EZ. Instead, it is limited to taxpayers with a 2011 Adjusted Gross Income (AGI) of $57,000 or less. Also, each participating company in the Free File Alliance sets its own eligibility requirements and not all taxpayers will qualify for all companies. Individual company offers may be limited by AGI, geographic location, specific states and include other criteria. The IRS has a "Help Me Find a Free File Company" tool to help you find a program that meets your needs.

In addition, there's Free Tax USA, which has a free tax service that seems to have no limitations --- at all. At least, looking at their FAQ, we were unable to find one. State filing will cost you $9.95. Let's not forget that neither the Walmart nor the IRS program covers state tax returns. In other words, you're going to need to pay for state tax returns.

What does this all mean? It means the Walmart deal isn't the only game in town. Don't necessarily feel it's necessary to give your business to "the evil Empire," as some have called Walmart for its treatment of its employees, its suppliers, and the resulting disruption of local economies. Do some research to make sure you pick the program that you feel is best for your situation.

Image Source: Wikimedia Commons

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