Selected taxpayers will receive invitations around mid-February, an IRS official said on condition of anonymity before Tuesday’s announcement.
If all goes well with these initial applicants, the program will gradually open up to more users, officials said. The IRS’ goal is to make the program available to everyone who wants it in 13 eligible states by the April tax filing deadline. The IRS said in an email Tuesday that the agency expects to have hundreds of thousands of users.
Direct File’s design reflects IRS polling that taxpayers are reluctant to use IRS filing software if it does not handle federal and state returns similarly. Therefore, for the first year, Direct File will only be open to taxpayers in her nine states with no income tax. In addition, he agreed to work with the IRS to integrate IRS software into each state’s website for filing tax returns.He is only available to taxpayers in four states, plus Arizona and California. will be available. , Massachusetts and New York.
However, the agency is open to participating states that are willing to do so and expects more states to participate in the coming years if the 2024 filing season is successful and Direct File continues. , the official added. There are no income-based eligibility restrictions.
Direct File software has some limitations. Users cannot itemize deductions (an option chosen by more than 10% of taxpayers) and only certain tax credits and certain forms of income are allowed. For example, people who claim child support credits or have interest income of more than $1,500 will no longer be able to use this free software. The IRS’ Tuesday statement did not list self-employment income as one of the types of income likely to be processed by the software, meaning gig workers would be excluded.
Direct File processes three main tax credits: the Earned Income Credit, the Child Tax Credit, and the Other Dependents Credit. The software also allows users to deduct teacher expenses and student loan interest. However, no other credits or deductions will work in the first iteration of the software.
Meanwhile, other options remain for people who can’t take advantage of the IRS’ new program but still want to file their taxes for free. People with an annual income of less than $73,000 can access certain commercial tax software for free through: free files program, seniors and people making less than $60,000 a year. You can have volunteers prepare your taxes for free.In-person or virtually with volunteer income tax assistance programs supported by the IRS across the country.
And anyone can do it anytime, regardless of income. Fill out your own tax form Submit electronically or on paper for free.
The IRS is making the Direct File program, which runs in English and Spanish on cell phones and desktop computers, open to everyone, even those who don’t feel comfortable filling out tax forms, by asking simple questions. We want to provide you with an easy option. -Answer prompts like the one a user sees in her TurboTax or other commercial tax preparer. This may be more appealing than his current Free File program, which about 70% of Americans are eligible for but only 3% use.
