May 22, 2014 1:50 pm

Free-File

For the past 5 years, taxpayers with adjusted gross income up to a certain amount ($58,000 in 2013) have been able to prepare their federal income tax returns and file them electronically at no cost. This has been possible because of a program called Free-File in which commercial software/cloud companies (the Free File Alliance) have agreed to make this possible. More than 3 million taxpayers have used Free-File thus far this year. The program had been set to expire this October. The IRS and these firms have agreed to a 1-year extension.

The parties are hoping that the extension will give them time to work out an extended or even permanent arrangement. Negotiations are set to begin this June.

Source: IR-2014-64

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Tax Glossary

Profit-sharing plan

A defined contribution plan under which the amount contributed to the employees’ accounts is based on a percentage of the employer’s profits.

More terms