Here are some companies that offer free tax software:

* TurboTax

* TaxAct

* Free File from the IRS

* More links

From IDontPay.com:

We all pay enough income taxes already, right?  So why pay even more to file your taxes?  Use free tax software or free online tax services.  Below you will find free tax software to download or use online to efile your federal tax returns, as well as free state income tax return servies and tax forms to download and print.  Many tax preparation software services require no download and will offer a great deal of tips and advice on deductions, tax savings and tax planning.  If you prefer to print and mail your returns, most online programs and downloads let you do just that.  Income tax help links and tax saving tips will be posted in this section whenever possible.

Free E-file Tax Return [new window][broken link]  TaxAct.com is a free tax software solution.  Download free tax software.  Prepare, print and e-file for free.  (US only)

Free File Alliance [new window][broken link]  Each year since 2003 the IRS has partnered with many tax software companies to allow citizens to Free File, or efile their taxes for free.  The services include free online tax preperation of your federal returns and free efiling.  Each company has different guidelines for who can electronically file for free.  Some allow you to make up to a certain AGI (adjusted gross income) such as $52,000.  Some even offer free efiling for certain state income taxes, free efiling for certain ages and/or all active military personnel.  (US only)

Free Tax Tips [new window][broken link]  Browse a large library of free tax tips and advice from H&R Block.  (Any Country)

I-Can EIC [new window][broken link]  This web-based application helps low-wage earners claim the Federal Earned Income Tax Credit (EIC) and complete their tax forms for free.  It is available in English or Spanish to anyone with internet access.  There is no cost to e-file if you have an email address.  (US only)

Free State Income Tax Filing [new window][broken link]  A map of states that offer free income tax efiling through their websites.  Also lists states where free efiling is available for some individuals through private software.  (US only)

Free Tax Planning Help [new window][broken link] (NEW) FOX News online provides many free tax tools and tips.  Read dozens of tax related articles and learn about tax planning for families, businesses and investors.  (US only)

About.com lists the Top 10 Free Tax Preparation Programs, including:

You can prepare your taxes and electronically file your return for free using one of the IRS Free File websites. The IRS has teamed up with nineteen software companies to make tax preparation free or low-cost for most Americans. You must begin at the IRS Free File page. If you go directly to the company's website, you won't qualify for the free service. These tax prep programs were thoroughly tested using the following criteria: Cost, Ease of Use, Speed, and Accuracy.

1. TurboTax TurboTax (Free File Edition) caught a typo I made when entering my W2. This is a common tax prep mistake, and TurboTax was one of two Free File software programs that caught the error. TurboTax is very easy to use, fast, and accurate. TurboTax is best used with Internet Explorer. Adding a state return will cost $24.95. Unfortunately, TurboTax slows down the tax prep with frequent marketing messages to upgrade to a paid version. Overall, TurboTax Free File is very highly recommended.

Irwin Speizer writes:

Sure, you can still do all of your tax preparation manually, but you can spare yourself the trouble when tax preparation software can do much of the drudge work for you. For a small, simple business — particularly a sole proprietorship — some basic tax preparation software might be enough to handle just about all of your needs, leaving you more time to focus on building and expanding your business.

Tax preparation software can:

  1. Simplify and speed up the preparation of state and federal business income taxes
  2. Make it easy to e-file your returns
  3. Help you claim proper deductions
  4. Help you deal with payroll taxes
  5. Help you deal with sales and use taxes

Action Steps

The best contacts and resources to help you get it done:

Assess your needs Is your business small and simple? Expanding and complex? Are you a local operation, statewide, national, international? The size and complexity of your business will dictate how powerful your tax preparation software needs to be.

I recommend:  Start by making a list of the taxes you may be responsible for paying or collecting. These should include federal, state and local income taxes; payroll taxes (if you have employees); and sales taxes. Business Owner's Toolkit has tips on determining your requirements.