Free Filing for A Small Price

By Nellie Huang

It's somehow fitting that when the IRS offers something for free, you have to jump through hoops to figure out how to use it. That's the case with Free File Alliance, the new Web-based tax-preparation and filing service (go to www.irs.gov) The IRS just plays host; the service is provided by 17 private tax-prep firms.

The catch is, not every taxpayer is eligible--and not every tax-prep firm has the same selection criteria. Residents of Arizona, Georgia, Michigan and Wisconsin will find that they can free-file through FileYour Taxes. com. Anyone 50 or older will qualify at TaxBrain Online Tax Center. Active-duty military? Try Taxslayer.com The rules are in the fine print (oh, heck, it's all fine print), but it's still possible that you might work on your return only to find out mid-process that you don't qualify. Then you would have to double-back to the IRS site and look for a firm that wants you.

The IRS's goal is for at least 60% of taxpayers to qualify. There's a "wizard" to help you see if you do (from irs.gov click Free File, Start Now and Guide Me to a Service). But here's a tip: if your adjusted gross income is $28,000 or less or you qualify to file Form 1040EZ, you're good to go with half a dozen or more of the firms. With an AGI of $50,000 or more, try TaxACT.com (again, from the IRS site). --By Nellie Huang