Consumers who live or work in Massachusetts must generally file federal and Massachusetts state personal income tax returns each year. Massachusetts consumers may access a variety of resources to make the process of preparing tax returns easier, and, for many consumers, free, even if they do not prepare their tax returns themselves.
Consumers May Be Eligible for Free Help Preparing Their Tax Returns
Consumers who make $54,000 or less, are disabled, or speak limited English may be eligible for free help preparing their taxes through the Volunteer Income Tax Assistance (VITA) program, which is staffed by a network of volunteers certified by the Internal Revenue Service (IRS). Over 80 locations in Massachusetts offer this free help. To find the VITA site nearest you, use the IRS’ VITA locator tool.
In addition, seniors are eligible for free tax help through a network of IRS-certified volunteers with the Tax Counseling for the Elderly program. Over 200 locations in Massachusetts offer this free help to seniors. To find the nearest Tax Counseling for the Elderly site near you, use the AARP Site Locator tool or call (888) 227-7669.
Free Tax Filing Software and Electronic Forms are Available
For those consumers whose income is $64,000 or less, certain companies provide free software to prepare federal and, sometimes, Massachusetts state personal income tax returns. Be advised that limiting conditions apply and not all software platforms will be free to every person whose income is $64,000 or less. Rather, certain age and state residency requirements apply. Consumers should review the software details at the IRS’ webpage and input basic information, such as income and age, into an IRS lookup tool to find software options that are truly free for them. Certain software platforms may charge fees for filing Massachusetts state tax returns as well as fees for filing particular forms that may be required as part of certain tax returns.
Even consumers whose incomes are above $64,000 may use free forms provided by the IRS to prepare their federal taxes. These forms guide users through the tax preparation process and compute tax payments, although consumers must be able to determine which deductions and credit they are eligible for and may not use these forms for state tax returns.
Be Wary of Promotions to Get Tax Refunds Right Away
Consumers should be wary of promotions that offer tax refunds immediately without waiting the typical three weeks that it takes the IRS to process federal returns and deposit refunds. While these promotions sound appealing, they are not free. They are generally loans, advances, or lines of credit with significant costs attached. Consumers who choose this option will end up with less money in their pockets than if they had waited for the IRS to deposit their refunds. In exchange for receiving their tax refunds right away, a portion of consumers’ refunds goes to the companies who offer these services.
These promotions for loans, advances, or lines of credit work in a variety of ways and often entail a variety of fees, such as tax return preparation fees. These fees will be taken out of consumers’ tax refunds so consumers will not receive their full refunds. Remember that many consumers in Massachusetts do not have to pay any tax preparation fees because they are eligible for free help to prepare their taxes and/or free tax preparation software (see section above).
In addition, even if a loan, advance, or line of credit is marketed as 0% interest or fee-free, consumers’ tax refunds—less their tax preparation fees—are often loaded onto debit cards, rather than deposited into consumers’ pre-existing bank accounts. If consumers use these debit cards to obtain cash from certain ATMs, they may be charged ATM fees, and if consumers do not use these debit cards for a couple of months, they may be charged inactivity fees. In addition, consumers who opt to receive their tax refunds—less their tax preparation fees—on a line of credit may be charged annual fees, late fees, and returned payment fees, in addition to paying a high interest rate. Consumers should ask questions so that they understand the true costs of any tax refund loans, advances, or lines of credit before signing up for these promotions.
Tax Scams and Identity Theft
Consumers should be wary of calls, emails, text messages, or social media feeds that purport to be from the IRS or from the Massachusetts Department of Revenue (DOR). While scammers may call consumers and demand immediate payment of taxes or penalties, neither the IRS nor the DOR will ever ask for credit card numbers over the phone or request a prepaid debit card or wire transfer. Consumers should never give prepaid card information to someone they do not know – it is like sending cash. For more information about tax scams, visit the IRS’ webpage and see other alerts from the Massachusetts Attorney General's Office.
The Attorney General’s Office fields thousands of inquiries pertaining to scams and can direct consumers to the appropriate agency to file a complaint. One of those is the Federal Trade Commission (FTC). Consumers can file a complaint with the FTC on its website at www.ftc.gov/idtheft, or via phone at (877) 438-4338.
Consumers may also call Attorney General Healey’s Insurance and Financial Services Hotline at (888) 830-6277. Additional information and resources pertaining to consumer scams are available on the Attorney General’s website.