(NEXSTAR) – In 2024, the Internal Revenue Service will introduce a new free tax filing system. Taxpayers in several states will be able to enroll in the test program on January 29, the first day of the tax season.
The IRS believes that the new tool, called Direct File, would provide step-by-step instructions and real-time support; but, not everyone will initially be qualified.
In a phased introduction, government workers in the following states will have initial access to Direct File: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State, and Wyoming.
Eligibility for the initial wave of the trial program will also be determined by how simple the federal tax return is to understand; certain tax credits, additional gig or business income, and itemized deductions will not be accepted.
A representative for the IRS informed Nexstar that by March, access to the IRS will be available to workers in the private sector in the 12 states that have signed up for Direct File, subject to its success.
An internal team comprising tax specialists, product managers, software engineers, designers, and data scientists created the free filing service at the IRS. The fact that there is no income cap sets it apart from the Free File tool.
Direct File is not a replacement for any current alternatives, according to the IRS; rather, it is intended to be an extra option to help streamline the tax filing process.
For those taxpayers who are tired of paying the fees associated with tax filing services, Direct File may be a welcome alternative.
The Federal Trade Commission (FTC) declared last week that TurboTax, a well-known provider of tax software, had misled consumers by referring to one of its solutions for straightforward forms as the “Free Edition.”
The majority of taxpayers, according to the FTC, did not complete the return requirements, excluding them from TurboTax’s free filing service.