Tax season is in full swing! Again this year, the Internal Revenue Service is offering a program that allows many U.S. taxpayers to electronically file their tax returns for free.

Free File is a free federal income 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. You may access free commercial online tax preparation and electronic filing services through the website.

Eligible taxpayers may prepare and file their federal income tax returns using commercial online software provided by the Free File Alliance companies — not the IRS. Since Free File’s debut in 2003, more than 19.2 million returns have been filed through the program saving taxpayers millions of dollars.

It’s important to note that not everyone is eligible to use Free File:

Free File is only available to taxpayers who have a 2007 Adjusted Gross Income (AGI) of $54,000 or less. Individual company offers may be limited to specific states and include other criteria. Carefully review the Free File offer criteria before selecting the company. Each participating software company sets its own eligibility requirements.

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 $30,000 or less.

The 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.

(On a related note, Allen sent me a Consumer Reports article from 2006 that attempts to answer the question “Should you do your own taxes this year?”)

Addendum: Jim at Blueprint for Financial Prosperity dropped a line to let me know he’s posted a list of free tax preparation services.