I-CAN! Files Your State And Federal Tax Returns For Free

I-CAN! is a web-based tax preparation tool that will file your tax return completely free of charge. I-CAN has no eligibility criteria or income restrictions and will eFile your state return for free if you live in California, Michigan, New York, Pennsylvania or Montana. It almost sounds too good to be true. So why isn’t I-CAN! a member of the IRS’ Free File Alliance?

Unbelievably, the IRS’ Free File Alliance limits participation to commercial tax preparers who charge for their services. The poor private sector apparently can’t compete against non-profits. Alliance members make their money by limiting free eFile to people with an adjusted gross income of $54,000 or less, and by charging to file state tax returns.

By contrast, I-CAN! was created by the Legal Aid Society of Orange County to help people qualify for the Earned Income Tax Credit, and is now supported by the Legal Service Corporation. They have no incentive to gouge their customers. Just look at our favorite part of their FAQ:

Can I get “instant cash” or a loan if I use I-CAN!™ E-File?
No. I-CAN!™ E-File does not support or promote any type of “same day loans”, “refund anticipation loans”, or “instant cash.” These loans can come with interest rates up to 700% APR. If you e-file and use direct deposit, you will receive your refund within 10 to 14 days without paying unnecessary and excessive fees.

Can you imagine H&R Block or Jackson Hewitt being so forthright?
We’ll be using I-CAN! to our file our tax returns this year and you should too.

I-CAN! (Thanks to Jeremy!)

Comments

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  1. DeadlySinz says:

    i feel a lawsuit coming from ICANN for trademark infringement.

  2. laserjobs says:

    AWESOME!!! Thank you guys.

  3. bohemian says:

    You still can’t use it if you do a Schedule C. So were still stuck doing paper filing. But I do like the idea of what they are doing. H&R Block and Jackson Hewitt are becoming predators on people who don’t know any better. How much money do them make off of people who get the Earned Income Credit or need to file a 1040EZ but don’t understand taxes.

  4. umbriago says:

    And God knows there are enough people who don’t know any better.

  5. [www.statetaxfreedom.com]

    That’s what I have used to file my taxes for the past several years. It is Intuit’s web version of Turbo Tax with the added bonus of free state filing for certain states.

  6. tape says:

    There are few things that anger me more than the insane e-file monopoly held by H&R Block, Intuit, et al that the IRS allows to continue.

    The IRS would actually prefer it if everyone e-filed, because it’s much faster and accurate than dealing with paper returns, but the big tax companies shell out big lobbying bucks to make sure they don’t let that happen. There should just be a web interface on http://www.irs.gov just like the H&R Block or TurboTax websites where you can just input your info and have it be done.

    Of course, the IRS should just be abolished along with the Fed anyway, but that’s yet another discussion entirely.

  7. edrebber says:

    @tape: If everyone e-filed, the IRS would reduce staff and budget. Government agencies want to increase staff and budget.

  8. Buran says:

    @edrebber: Not necessarily. Some just really do want to get it done right. If the IRS wants everyone to e-file, why doesn’t it remove the penalties (i.e. charges) that stop many people from doing it?

    I didn’t pay at all this year thanks to being a State Farm customer, but I should have been able to do state and local taxes directly through the respective websites.

    And what’s really weird is that MO won’t let you efile the short form and I couldn’t figure out why Turbotax kept telling me I couldn’t e-file until I poked around and fund that I had to do the long form just to efile! Fortunately, with tax software you just have to find where you tell it what form you want to use (override its “recommendation” and it’ll move everything over for you, and I finally managed to e-file.

    I still had to mail a paper check because they wanted to charge a convenience fee for me to pay online with my credit card (and then just pay it off in full when the bill comes, like always) so why the hell do we still have to pay a fee for that? Ridiculous. But I’d rather spend the money on a stamp than pay some asinine “convenience fee”.

  9. nweaver says:

    What I object to is charging for efiling at ALL!

    Why should I have to pay $14 to a private company to save the IRS money? No friggin way, so they can get a nice pile of paper to deal with.

  10. witeowl says:

    @Buran: Actually, a reasonable fee for paying by credit card would be understandable, as the vendor (in this case the IRS) has to pay a fee for credit card transactions. Of course, IIRC, the “convenience fee” was far beyond reasonable.

    Beyond that, it’s driven me crazy that they charge for the two-way convenience of e-filing. It’s the only reason I’ve bought tax software since selling my business. (It was either cheaper or a wash that way.) I’m glad I have another option now.

    In fact, I think I’ll take the money that I would have spent on tax prep software and donate it to I-CAN!

  11. forgottenpassword says:

    Meh, I already used state farm’s link to a free fed & state turbotax efiling.

  12. Trailboss says:

    I use http://www.taxact.com for the last 6-7 years…cost about 12 bucks to file both state/fed. Never had a problem.

  13. gniterobot says:

    They don’t do Mass…worthless for me…worst part is they tell me AFTER I fill out all the forms.

  14. bnb614 says:

    @umbriago: Then those people should learn to know better. If someone gets screwed by a 700% early refund loan “because they don’t know any better” than they get what they deserve.

    Can we stop debasing everything and making everything dumbed down for the idiots in the world?

    If you sign your name on a mortgage you don’t understnad, or a tax form you don’t understand then you get what you deserve. If you don’t understand, get someone to help or DON’T SIGN.

  15. MMD says:

    @Buran: So does that mean the IRS is exempt from credit card merchant agreements? This is not snark – it’s an honest question. I thought credit card surcharges were against all CC company’s merchant agreements.

  16. MMD says:

    Oops…that was directed at Whiteowl, not Buran. Sorry.

  17. Crumbles says:

    I don’t get it. I get free e-file with TurboTax anyway… who cares?

  18. brennie says:

    I am convinced that H&R is in cahoots with the gubmint to get you the crappiest return possible. I went once years ago cause I wanted the ‘guarantee’ they promise (now useless since they have an Arbitration Clause). The agent, who had been doing this for years, was awful. Roth IRA’s were kinda new, I had one, and she had no idea what the contribution limits and deadlines were. I wound up doing my own return, educating her, and I still had to pay.

  19. humphrmi says:

    @Crumbles: How do you get free e-file with Turbo Tax? I’ve always had to pay them a fee to file electronically. I use the software, not the website.

    I have a story about H&R Block. When I was about 17 (it was a long time ago), I hit my first year that I had non-exempt taxable income. My mom pushed me to take my W2 forms to the same H&R Block she had her taxes done at. I paid them $20 to fill out a 1040EZ form. I was steamed, and vowed to never use them again. I started out doing my own 1040EZ, but over the years as my tax forms got more complicated, I just read the IRS documents on how to do it myself. Actually, the IRS how-to documents are amazingly easy to follow if you can accurately follow complex step-by-step instructions.

    Anyway, now I use TT mainly because it’s easier than filling out forms. HRB never got another dime from me, and I was glad to see their financial troubles last year. Serves ‘em right, stealing my twenty bucks. Jerks.

  20. CumaeanSibyl says:

    NOW you tell me.

  21. witeowl says:

    @MMD: Not true, actually. I only recently found out that it varies.

    More to the point, why should a ludicrous “convenience fee” far beyond the CC surcharge be acceptable, but a reasonable “convenience fee” that aligns with the CC surcharge be disallowed?

  22. witeowl says:

    @Crumbles: Um, yeah, but you pay for Turbotax, right? Not everyone needs to pay someone else (in person or by software) to compute their taxes.

  23. hypnotik_jello says:

    @DeadlySinz: I think the lawsuit will be coming from lolcatz

  24. humphrmi says:

    @hypnotik_jello: i’m in ur i-can changing ur tax return!

  25. spinachdip says:

    @hypnotik_jello: I can has reefundz?

  26. bah says:

    I entered everything into I-Can and got a big refund… which, sadly, doesn’t sound right. I double-checked in TurboTax and, sure enough, I owe a little bit. I used I-Can’s online chat support to find out what went wrong, and they were entirely unhelpful. Basically, the line in the summary for my total income (which he told me was my total taxable income) would, according to the IRS tax tables, be a lot more than my withholding, meaning no refund for me. Chat Support Man told me he couldn’t give tax advice (!?) so I should email tech support tomorrow…

    Anyway: I would be careful using them, as their calculations don’t seem up to snuff. Yes, it might be my mistake, but I re-checked four times and can’t find anything that would lead to the numbers they gave me.

  27. bah says:

    follow-up: according to their Email tech support (which I had already discovered on my own), their software just didn’t input my 1099-MISC onto the actual document. So BEWARE — read very carefully through the actual forms it generates before free-filing.

  28. wring says:

    i used turbo tax online, got refund within 10 business days. paid $0. also, HR block’s taxcut online is full of bugs. paid $20 for their basic service and they were unable to efile my return and apparently i had to wait till early february since they were still “updating” their EIC software thingy. didn’t have a single problem with turbotax.

  29. holymogwai says:

    @wring: How did you get your refund so quick? I did mine on Feb 2nd, and it said because of some new AMT crap, the IRS wouldnt be processing until the 11th, and then 10 days from that.

  30. ex-IRS says:

    The IRS won’t ever ban e-filing charges by third parties because the IRS depends on those third parties to meet the goals set by Congress: “…e-filing all computer-prepared returns by 2002 and e-filing 80% of all tax and information returns by 2007.” “http://waysandmeans.house.gov/Legacy/oversite/107cong/4-3-01/4-3erns.htm”

    Also, the IRS saves money from all the salaries, health benefits, etc of all the data transcribers, error corrections clerks, managers, etc. they no longer have to hire since they have convinced taxpayers to file their their tax returns electronically. What taxpayers don’t realize is that means the IRS has successfully outsourced it’s data transcription and return perfection function to taxpayers who get to pay for the privilege.

    Also, the IRS is not a credit card merchant. They contract with several companies who provide that service for a fee charged to the taxpayer. “http://www.irs.gov/efile/article/0,,id=101316,00.html”

    Treasury and the IRS have issued a separate request for public comment on a proposal to restrict the marketing of refund anticipation loans and similar products. “http://ftp.irs.gov/newsroom/article/0,,id=177075,00.html”

  31. Buran says:

    @witeowl: This was the state, not the feds (I got a refund from the IRS). And it’s quite unreasonable considering I can walk into a store and pay the same price for a gizmo as someone who pays with cash/check does. It’s basically a “because we can” fee.

  32. Buran says:

    @ex-IRS: How exactly would implementing a national free-file online system stop those goals from being met? Huh? The third parties wouldn’t be banned but why couldn’t you have the OPTION of filing directly? And the IRS has tons of people working on the paper returns who could work on the electronic versions – and could cut BACK on staff if e-filing were made free and even more people would use it. And in the store example I used in another comment, the store isn’t a credit card merchant either but it manages to not bend me over and charge bullshit fees.

  33. lovelygirl says:

    Why won’t people understand that not everyone can file online! There are many elderly people who do not own a computer, or have access to one. yes, the library is an option, but not if you are so disabled that you cannot leave the house! Technically, an elderly person could just ask the person who has been doing their taxes for years to just come and fill out the paperwork in their home. Not every elderly person has children that can show them how to use the computer. Computers are difficult enough for many middle-aged people, much less elderly people! Also, some people just don’t own computers. And they don’t want to. E-filing is not the way to do things. There has to be an option.

    For example, the FAFSA this year. They do not offer the paper version any longer. My mother has no knowledge of the internet and no time to learn. I can’t fill out the forms because I am away at college and I don’t have the paperwork or understand all the technicalities of income reporting and such like my mother would. She has to find someone to do this for her because the paper version was eliminated. This is not right.

    I-CAN! is a wonderful service for people who have access to it. It truly is a good idea, but it(and in a larger part, e-filing, cannot be the only option). Paper-based still has a place in this world.

  34. engstewart says:

    My wife surprised me yesterday by bringing home a sealed (new) copy of TaxCut 2007 (Basic). She found Dollar Tree selling it for $1.00. Not an endorsement, but just passing along info to anyone who’s interested…

  35. hkcons3456 says:

    Social Security Administration accepts credit card without any convenience fee for return of overpaid benefits. So, why not IRS too?

  36. backbroken says:

    I-CAN! has tax rebate?

    Anybody else read this headline as lolcatz?

  37. bonzombiekitty says:

    @gniterobot: It tells you on the front page what states it does.

    From the front page of the website:
    “You can use I-CAN!â„¢ E-file to file your Federal and state return if you lived and worked all year in one of the following states: California, Michigan, New York, Pennsylvania or Montana.”

  38. Weebot says:

    @lovelygirl: The AARP offers free tax counseling for the elderly, so it isn’t like they are being denied any options because of e-filing (most of the volunteer sites e-file.)

  39. akronharry says:

    I understand what Lovelygirl is saying. My parents used a rotary dial phone until they received a touch tone a few years ago and then it sat in a box for months.

    I have bought them tracphones twice hat they asked for in case of emergency and they sit in a box despite me writing down the basic information on the use of them.

    So I agree that paper forms need to be out there to fill out tax forms for folks that have no interest in technology.

  40. boreddusty says:

    Finally! A way to e-file in PA for Free! Thanks for this.

  41. RStewie says:

    If the Federal Government can require companies to submit thie invoice via WAWF (electronically), don’t think they won’t start doing this e-file for everyone. My grandparents never owned a computer, either, but their accountant e-filed for them every year it was available.

    Why wait that long for your refund, anyway? I did my taxes last night, I’ll get my money next week, at the latest. Isn’t that worth the effort of e-filing, even if you have to do it at the library?

  42. Caduceus says:

    The real question is whether or not the Oregon State School Fund gets a kick-back like it does with TurboTax! Man, that still cracks me up.

  43. Buran says:

    @witeowl: Because you’re not allowed to charge a surcharge for credit card customers.

  44. Buran says:

    @holymogwai: I already got mine. It’s OK to go ahead and file if you don’t have to use forms related to the AMT.

  45. Vanvi says:

    A little off topic, but I used H&R Block Taxcut a couple years ago and it was horrible. All kinds of technical problems with trying to save my returns as a pdf or transfer info between computers (both impossible), all because they charge for efiling so I was trying to print out the papers. Tech support was not helpful. Turbotax is better, maybe I-CAN is good (to get back on topic).

  46. ex-IRS says:

    BURA posted “ex-IRS: How exactly would implementing a national free-file online system stop those goals from being met? Huh? The third parties wouldn’t be banned but why couldn’t you have the OPTION of filing directly?”

    Bura, there were articles maybe 10 years ago about how the IRS wanted to offer free e-filing to taxpayers but the third party e-filers (H&R Block, Jackson Hewitt, etc) complained to Congress that the IRS would be unfairly competeting against them ($ billions in RAL fees at stake) so Congress forced the IRS to back down. It’s also why the IRS dropped their free TeleFile program that worked great for filing your tax return via your touchtone phone. What developed was the current limited free e-filing by third parties via the IRS gateway. Here is some more info:

    “http://www.freefilealliance.org/dcs/index.php?option=com_content&task=view&id=39&Itemid=37″
    “http://www.gcn.com/print/21_16/19036-1.html”

    GAO reports also stated that the IRS e-file program has lots of problems, one being that the IRS e-file system has poor security and is thus vulnerable to hackers (“http://www.news.com/2100-1017-254204.html”). I believe I also read one report that said that some of the free e-filing software via the IRS gateway had software bugs so they were not preparing or calculating the tax returns correctly.