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The IRS is developing a new platform called Direct File, aimed at providing taxpayers with a streamlined process to prepare and electronically file their federal income tax return for free directly through the IRS.
Unlike the existing Free File option, which connects eligible filers with third-party software for tax preparation and filing, Direct File operates independently. Free File remains available for taxpayers earning $79,000 or less.
Direct File is being introduced gradually, starting with invite-only access in twelve pilot states, including Texas, with broader availability expected in March.
The IRS is initially limiting Direct File to evaluate its effectiveness, focusing on simpler tax scenarios and excluding certain situations like itemized deductions or income from gig work. Taxpayers can use a tool to assess if Direct File is suitable for their needs.
Interested individuals can sign up for notifications as Direct File becomes more widely accessible.
Direct File eliminates the need for taxpayers to download or purchase software. Eligible users must create an IRS account and verify their identity through the ID.me tool.
The program provides a step-by-step checklist in English and Spanish, along with live assistance from IRS Direct File customer service representatives to address inquiries.
Congress mandated the development of a free, direct e-filing option for taxpayers in the Inflation Reduction Act of 2022, recognizing the financial burden of tax preparation for many individuals.
Elizabeth Ayoola, a personal finance writer for NerdWallet, emphasized the relief that a free filing option can bring, especially for those already facing significant tax obligations.
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