Introducing Direct File: IRS Free Tax Filing Program
Tax season is upon us, and the IRS has introduced its final testing phase for Direct File, the agency’s free tax filing program. This program is set to fully open in 12 pilot states on March 12, with expanded testing for new users starting on March 4. Direct File will be available 24/7, allowing users to file their federal returns conveniently and efficiently.
During the final testing phase, space will be limited, and Direct File may briefly close if the daily allotment is exceeded. However, if you’ve already started a return, you can continue using the software without interruption. To check your eligibility and learn more about Direct File, visit directfile.irs.gov.
The IRS plans to fully open Direct File on March 12 to all eligible users in the 12 pilot states, including Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. Although Alaska was originally part of the pilot, it is no longer included.
IRS Commissioner Danny Werfel stated, “We will be working closely with the 12 pilot states in this test run, which will help us gather information about the future direction of the Direct File program.” While the Direct File pilot does not support state returns, users from Arizona, California, Massachusetts, and New York will be guided to a state-supported tax-prep tool.
Who Qualifies for IRS Direct File?
To qualify for Direct File, you must have a simple and straightforward tax return with limited types of income, credits, and deductions. The pilot program will only accept Form W-2 wages, Social Security retirement income, unemployment earnings, and interest of $1,500 or less. Filers with contract income reported via Form 1099-NEC, gig economy workers, or self-employed individuals are excluded from the pilot.
In terms of tax breaks, you must claim the standard deduction. Direct File only accepts a few credits, including the earned income tax credit, child tax credit, and credit for other dependents. The software also allows deductions for student loan interest and educator expenses.
As tax season progresses, make sure to take advantage of the IRS’s Direct File program for a hassle-free and streamlined tax filing experience. Stay tuned for more tax planning news and updates from Extreme Investor Network.