The IRS has recently launched a pilot program for its Direct File tax-filing system, allowing taxpayers in 12 states to file their federal taxes directly with the IRS for free. This initiative is part of the Taxes 2024 coverage by CNET, providing information on the best tax software and tips for filing returns.
The Direct File program was developed in response to the Inflation Reduction Act of 2022, which required the IRS to explore the feasibility of creating a free online tax filing system. After presenting its findings to Congress in May 2023, the agency began developing the software. The program officially went live on Jan. 29 for selected taxpayers, with a brief test period opening to new participants on Feb. 21.
To be eligible for Direct File, taxpayers must reside in one of the 12 participating states and have relatively simple tax situations, primarily using the standard deduction. The program does not support itemizing deductions but does allow for deductions such as student loan interest and educator expenses. However, it does not accommodate tax credits for items like energy efficiency or health care premiums.
Those interested in using Direct File can check their eligibility on the program’s website and sign up to be notified when it becomes available to more taxpayers. The software operates similarly to popular tax software like TurboTax, guiding users through a series of questions to complete their tax returns for electronic submission.
The Direct File software is available in English and Spanish, with a chat feature for assistance during specific hours. It is compatible with computers, smartphones, and tablets, offering a user-friendly interface for taxpayers. The program assesses eligibility through a series of questions, collects personal and income information, and calculates tax refunds or liabilities.
Overall, the Direct File program aims to streamline the tax-filing process for eligible taxpayers, providing a free and convenient option for submitting federal tax returns.