A. IRS has various options available but mostly with restricted incomeIf your 2008 adjusted gross income is $56,000 or less, many companies are offering free filing available. huge list available at Free File Alliance in the IRS.gov website.

B. TurboTax – Individual, Business and Home & Business (Sole propriety) Intuit has wide variety of options with varying price range. TurboTax Free Edition is for a simple tax return, for example one that only requires the 1040EZ return with no itemized deductions. For State there is $25.95 extra. Then there are two upgrade levels – ‘TurboTax Deluxe’ ($29.95) is good if you have a home, made donations and want to itemize deductions. Use ‘TurboTax Premier’ if you have investment account and rental property ($49.95).

If you have home based business you want to get ‘Turbotax Home & Business package’ which is $74.95 in the Turbotax web page but Newegg.com has this software just for $59.99 with free shipping. If you have a corporation, partnership, or multi-member LLC and think you can handle it yourself, you can get TurboTax Business for Federal filing free with Federal E-file included.

C. H&R Block TaxCutThe free version of TaxCut is also restricted to those with simple returns. Not quite free, but you can also get TaxCut standard for Federal for $1 with free Federal E-file at Dollar Tree stores. It has no income restrictions and handles itemized deductions. Again, you have to pay $29.99 extra for state returns.

D. TaxAct - Best of all for simple tax returns is TaxAct Free, which offers a free federal return for everyone with no restrictions, with free Federal E-file. State return is $13.95 with E-file included.
The TaxAct “Ultimate” Bundle is $16.95, includes data importing, and the state return. However, there is a returning customer’s offer that gives you 30% off, bringing the total cost to $11.90. The link does not appear to actually discriminate between new and returning customers.
E. State Income Taxes – I live in Texas where I don’t have to file tax for personal income but there is web filing available for Sales and Use tax every quarter. Many states also offer their own online income tax filing programs. Federation of Tax Administrators has easy linksfor each state which takes directly to the tax website/links of that state.

Finally, if you have done your homework and know which tax forms you need to fill out, the IRS now lets you fill them out electronically and file them electronically for free. This is not the same as the income-restricted “Free File” above. Via Consumerist. Part of this Blog was inspired by MyMoneyBlog