New IRS tax prep pilot available; Is it an option for you?

Texans who have yet to file their federal income tax returns now have access to the IRS’ new Direct File pilot program.

Initially launched as a limited trial in January, the program has now expanded to include all Texas residents. Direct File enables taxpayers to prepare and file their returns directly through the IRS website at no cost, without the need for additional software downloads or purchases.

Clay Sanford, an IRS spokesperson, highlights that Direct File simplifies the process by guiding users through a checklist on various devices, such as computers, tablets, or smartphones. It automatically performs calculations and ensures maximum refund potential.

However, Direct File has certain limitations. It is suitable only for individuals with straightforward tax situations and specific types of income, including W-2 earnings, Social Security benefits, unemployment compensation, and interest income under $1,500. It does not accommodate income from gig work or self-employment.

Taxpayers opting for Direct File must claim the standard deduction, as the program does not support itemized deductions. Certain tax credits, such as the Earned Income Tax Credit and Child Tax Credit, are applicable, but others, like the Child and Dependent Care Credit, are not.

Moreover, Direct File imposes income thresholds, and users are advised to check their eligibility through an online tool provided on the program’s website.

Sanford emphasizes that Direct File serves as another free option, alongside the existing Free File program, for eligible taxpayers to complete their returns without incurring any fees.

To utilize Direct File, individuals must create an IRS account using the ID.me tool.

Additionally, taxpayers have access to other free filing options, such as Free File for those with incomes below $79,000, in-person assistance through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs, MilTax for military personnel and veterans, and free fillable forms for those comfortable handling their returns independently.

NBC 5 Responds provides assistance in resolving consumer concerns and can be reached at 844-5RESPND (844-573-7763) or through their customer complaint form.