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Less people are using the IRS free online tax prep software

It seems even though you can file using free tax prep software via the IRS website, fewer people are actually doing it. The IRS reports tax forms returned via the IRS site are down twenty per cent from this time last year.  It may point to more rules to be eligible for this perq are pushing people to buy tax prep software or even go the paid preparer route.

IRS director of electronic tax administration says maybe the new requirements are keeping some people away from the free program, but also points out budget cuts have kept advertising down, so few people are aware the program even exists. And you canít phone it in anymore, so those people who used to dial for dollars are now taking some more time to figure out what to do.

The tax prep industry had to offer their free services to sixty per cent of the taxpayers. And so went the population to the free services, undercutting the industryís bottom line. The IRS then made some trade offs with the industry, stricter eligibility but tighter consumer protection. 

Make sure you check out the IRS site and see if it makes sense for you to file online for free.

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