An online fax company HelloFax has partnered with Microsoft. You can send upto 50 faxes anywhere in the world free with your microsoft account.
All you need to do is go to this Link of hellofax.com and sign up with the microsoft link. When you sign up, you need to upload the document and put the fax number in the field the send fax. After successful delivery of fax, copy of outbound fax will be automatically save in your SkyDrive.
If you want to receive fax without having a fax machine, you need to buy an incoming fax number which will cost you around $7.99 per month in this service.