IRS Direct File will be available to all eligible taxpayers in a dozen states on March 12, just over a month before the federal tax return deadline. This launch is a part of Taxes 2024, CNET’s comprehensive coverage of tax software, tips, and everything else needed to file taxes and track refunds. Direct File has had a cautious rollout, beginning with a pilot for government employees on Jan. 29, followed by phased sign-ups for new users. Now, the IRS is prepared to expand the program.
As a New York resident, I had the opportunity to test Direct File, but due to income restrictions, I was unable to complete a return this year. However, the software is user-friendly and could become a valuable tool as it evolves to cover more tax situations. Currently, Direct File lags behind industry leaders in functionality.
Direct File is a simple online tax preparation software that requires users to create an ID.ME account for identity verification. The process can be challenging, with some bugs encountered during setup. Once logged in, users are guided through a five-step tax-filing checklist, entering information manually with limited drop-down options.
The software has limitations, including income caps, credit restrictions, and eligibility only for those taking the standard deduction. Direct File only accepts federal returns from 12 states and income from specific sources, such as employer income and Social Security benefits.
Direct File ensures users do not file incomplete returns by prompting for all necessary tax forms and income sources. The software calculates the final return amount and offers direct deposit or mail options for refunds. While contextual help is available, the chat function is limited to general questions about Direct File.
The software lacks real-time return updates, the ability to skip ahead in the filing process, and a comprehensive help section. Future versions may integrate more resources and personal information to enhance user experience. Despite its limitations, Direct File shows promise for future tax seasons.