The Internal Revenue Service offers a program that allows two-thirds of U.S. taxpayers to electronically file their tax returns for free.

The Free File program is a free federal tax preparation and electronic filing program for eligible taxpayers developed through a partnership between the Internal Revenue Service (IRS) and the Free File Alliance LLC, a group of private sector tax software companies. Since Free File’s debut in 2003, more than 15.4 million returns have been prepared and e-filed through the program. Free File allows taxpayers with an Adjusted Gross Income (AGI) of $52,000 or less in 2006 to e-file their federal tax returns for free.  That means 70 percent of all taxpayers — 95 million taxpayers — can take advantage of the Free File program.

The IRS list of participating companies includes links to the available programs. Some companies have more restrictive requirements than the IRS guidelines. For example, in order to use TurboTax, you must earn $28,500 or less.

Charlie at PearBudget chose H&R Block’s TaxCut, which he found easy to use:

They’ve done a terrific job of explaining everything you need to know, and they’ve made the interface extremely usable and clear. I finished my federal taxes in about four hours, but part of that was time spent looking for receipts.

This Free File program only applies to your federal return; it does not include your state return. From my experience, though, once you’ve computed the numbers for your federal income tax forms, you can use many of them as a basis to complete your state income tax form.

This is a great deal for many people. Check into it if you haven’t done your taxes yet. For more info, read the Free File FAQ at the IRS web site.

Speaking of “free” and “taxes”, Ramit at I Will Teach You to Be Rich is bringing in an expert to answer questions:

I have a CPA who’ll answer tax questions for free. Your readers can ask anything on their mind and my guy will try to write a response to the best questions. This will be a series going right up until the end of tax season.

Go check it out!