Some investors can file taxes for free in 2025. Here’s who qualifies

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Some investors can file taxes for free in 2025. Here’s who qualifies

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There’s less than a week until tax season kicks off on Jan. 27 — and investors may have more options to file returns for free than in previous years.

Typically, investors need certain tax forms to file returns, including Form

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for capital gains and losses and Form

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for dividends and capital gains distributions. Form

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covers interest income from savings accounts, certificates of deposit, Series I bonds, Treasury bills and more.

Plus, retirees may receive Form

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for withdrawals from 401(k) plans, individual retirement accounts, pensions and other distributions.

More from Personal Finance:
IRS announces the start of the 2025 tax season
This free tax filing option is ‘fast and simple,’ IRS says. Here’s who can use it
30 million people could qualify to use IRS free Direct File program

Here are three free tax filing options to consider this season, depending on your situation.

1. IRS Direct File

This season,

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across eligible states, according to U.S. Department of the Treasury estimates.

“We’re excited about the improvements to Direct File and the millions more taxpayers who will be eligible to use the service this year,” former IRS Commissioner Danny Werfel said in a press release in October.

During the pilot in 2024, the program covered simple returns, including filings with

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of $1,500 or less. But for the 2025 filing season, the program

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and Alaska residents who receive the Alaska Permanent Fund dividend.  

The program doesn’t currently cover other investment income, including capital gains and dividends.

Starting in March, Direct File will also

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from most company retirement plans, such as 401(k) plans, pensions and more. But you can’t use the service if you withdrew funds from an IRA. 

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2. IRS Free File 

Another option,

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This season, you can use IRS Free File if your 

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, or AGI, was $84,000 or less in 2024.

Eight software partners will accept the most commonly used 

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, explained Tim Hugo, executive director of the Free File Alliance. Those include Schedule B for interest and ordinary dividends and Schedule D for capital gains and losses. These Schedules cover investing forms, such as 1099-INT over $1,500 and certain items from Forms 1099-B and 1099-DIV.

“It really is a great tool that can serve millions of Americans that just nobody knows about,” Hugo said.

3. Volunteer Income Tax Assistance

If your want more guidance, you may also qualify for free tax prep from

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, or VITA, a program managed by the IRS. 

For the 2025 season, you’ll qualify for VITA with an adjusted gross income of $67,000 or less.

The

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includes coverage for investors, including Forms 1099-INT, 1099-B and 1099-DIV, with certain limitations. VITA also covers Form 1099-R for retirement income with some exclusions. The program won’t cover cryptocurrency transactions for 2024 filings.   

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