Free tax filing? There are catches

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If you earn less than $62,000 a year you should be able to file your taxes for free.

But caution: Many people who think they are free filing end up getting charged in the end.

To file your taxes free of charge, visit the IRS web site and click on the Free File section. You will see more than a dozen tax preparation services, from H&R Block to Jackson Hewitt and more, all offering free filing in 2016.

Unfortunately, many people don't do that. They go through TurboTax.com, HRBlock.com and even low cost provider TaxAct.com, and they end up getting hit with processing fees, state filing fees, or other charges.

It's a simple mistake to make, but it can cost you $40 or more. You need to enter through the IRS portal to be sure you have the free service.

There are other catches, too.

  • You may still have to pay as much as $30 to file your state return with some programs, even through the IRS free file system.
    • Solution? Try filing your state taxes directly through the state's tax website. In many cases, that is easy -- and free.
  • A second catch: Lower income limits that can trigger fees.
    • If you choose TurboTax -- the No. 1 program -- the income limit for 2016 is not $62,000, but rather just $31,000 for most people. So before you begin the process, look at the income limits, which are listed on the IRS Free File page.
  • A third catch: Age limits. Free filing from TaxAct requires you to be age 56 or younger. If you are in your 50s, you may say "doesn't that stink?"

But there's good news: There are enough options that you should be able to find another service that will take you no matter what your age.

Bottom line: Watch for traps when free filing. And remember to enter through the IRS's free filing portal so you don't waste your money.

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