Tuesday’s need-to-know money news

Today’s top story: How to know if you qualify for free file and use it. Also in the news: 5 things to know about guaranteed universal life insurance, the worst that will happen if you file your taxes late, and if gas is really cheaper at Costco.

Analysis: Taxpayers Waste Billions on Filing Federal Returns
Each year, 70% of taxpayers qualify to file federal returns for free, but few do. The unnecessary spending could top $13 billion.

5 Things to Know About Guaranteed Universal Life Insurance
Here are five things you should know before buying a guaranteed universal life policy.

What’s the Worst That Will Happen If You File Your Taxes Late (or Not at All)?
Taxes are the least-popular aspect of modern civilization, but filing late—or not at all—is a big mistake.

Is Gas Really Cheaper at Costco?
Gas prices likely aren’t dropping any time soon. Could Costco be your saving grace?

Tuesday’s need-to-know money news

Today’s top story: IRS Free File and how to get free tax preparation or free tax help in 2021. Also in the news: How women investors can rewrite their financial futures, options for people who can’t afford their tax bills, and beware of lender’s mistakes in your credit report.

IRS Free File & How to Get Free Tax Preparation or Free Tax Help in 2021
Here’s where to get free tax software, free tax preparation and free tax help this year.

How Women Investors Can Rewrite Their Financial Futures
When preparing for a secure retirement, women can be disadvantaged. But careful planning and intentional actions can help reduce roadblocks to financial health.

5 Options for people who can’t afford their tax bills
If you can’t afford your tax bill, consider an installment plan or an offer in compromise if you qualify.

Beware of Lenders’ Mistakes in Your Credit Report
Another reason why it’s important to monitor your credit report.

Q&A: How IRS Free File works

Dear Liz: I wanted to alert you to the fact that online tax preparation companies are up to their old tricks again this year despite being called out last year for deceptively hiding their free tax filing from eligible filers. My son, who qualifies for free filing, was redirected to the paid “deluxe” version when it turned out he qualifies for a “Savers Tax Credit.” He makes modest tax-deferred contributions through an employer that matched contributions. (He’s a low-income student who works in retail.) He logged out of that website and instead successfully used a competitor provider for free.

Answer: The way to access the IRS’ Free File program is through the IRS website, which directs people to the private tax preparation companies that have agreed to offer this service. Unfortunately, many of those same companies spend a lot of money trying to obscure that fact that most Americans can file for free.

Independent news organization ProPublica reported last year that tax preparation companies were hiding their free file options from online search engines and steering people instead into paid tax preparation. A government report in February confirmed that more than 14 million taxpayers paid for tax preparation last year that they could have received free.

The companies have since been banned from hiding the free option and are supposed to include a link that returns people to the IRS Free File site if they don’t qualify for the company’s free offer. But ProPublica found that they continue to steer people away from free filing in various ways, including advertising that misuses the word “free.”

Also, many people like your son discover only late in the tax preparation process — often after they’ve added most of their information — that they don’t qualify for that company’s free option, although they would qualify elsewhere.

Here’s what people need to know about free filing:

People with adjusted gross incomes under $69,000 a year can qualify for free filing, but they should start their search at the IRS Free File webpage.

People in the military and their families can use MilTax, provided by the Department of Defense.

They can also get advice from a tax professional at (800) 342-9647.

In addition, people may qualify for the IRS’ Volunteer Income Tax Assistance if they make less than $56,000, live with a disability or speak limited English. Use the Volunteer Income Tax Assistance locator tool or call (800) 906-9887.

People who don’t qualify for the above services can still use free fillable forms. In addition, some tax preparation companies may have free options for people filing basic forms. The types of income and credits that allow someone to file for free should be prominently displayed on the company’s free file page.