Thousands of Iowans are eligible for free tax preparation services. Lawmakers are promoting the Free File Alliance — a partnership between Iowa, the Internal Revenue Service and several electronic tax software manufacturers. Senate Democratic Leader Mike Gronstal of Council Bluffs says the program is intended for low and moderate-income families.
“Hundreds of thousands of Iowans can use this system and get their taxes done for free, plus file them on-line and get their refund within 10 days,” Gronstal said. The free tax preparation and e-filing is available to families with an adjusted gross income of $57,000 or less in 2009.
Gronstal says the service should help low-income Iowans avoid taking out tax refund anticipation loans, which often include high interest rates and fees. State officials are also trying to raise awareness of the Earned Income Tax Credit.
Families that earn up to $43,000 a year qualify for the credit which can be as much as $5,600. The IRS estimates around 20% of eligible taxpayers aren’t aware of the Earned Income Tax Credit.