Why You Should Take Advantage of IRS Direct File This Tax Season
Widespread participation will help solidify the future of this important service amid the chaos in the federal government.
With Tax Day rapidly approaching, taxpayers who haven’t yet filed could have a great option available to them this year. Half the states in the nation now have access to a zero-cost tool created by the Internal Revenue Service called Direct File that allows people to file taxes online directly to the government using a question-based software.
Direct File is a much better option than paying for expensive corporate-owned software or hiring a private tax-prep company. The typical taxpayer ends up spending an average of eight hours each year completing their tax returns in addition to shelling out $160 a year to pay for a service that should be—and is now—free of charge.
Last year, Direct File software was made available through a pilot program to those with relatively simple tax situations living in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, Texas, Tennessee, South Dakota, Washington, and Wyoming.
The user testimonials speak for themselves. “It was the fastest I’ve ever done my taxes,” said one user. “I wish everyone could do their taxes that easily,” said another.
This year, in addition to the 12 states from last year’s pilot program, all of which are participating again, Direct File has been expanded to include Alaska, Connecticut, Idaho, Illinois, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin.
Approximately 30 million people across the 25 participating states are eligible to use Direct File. And there are many reasons to welcome this new e-file tool created by the IRS.
Direct File was designed to make it as easy as possible for people to file taxes. In addition to being free of charge, the tool is mobile-friendly, available in both English and Spanish, and has live chat assistance from the IRS. What’s more, the tool now pre-populates some information that the IRS already has in its records to make the process even quicker and error-free, which is a huge improvement over its original version.
What’s more, Direct File is intended to help people claim credits like the Earned Income Tax Credit (EITC), which around one in five eligible filers don’t currently claim.
Research shows that when Direct File is fully scaled up, Americans could collectively save up to $11 billion in filing costs alone, while low and moderate-income families could recoup $12 billion in tax credits like the EITC and Child Tax Credit that they’re currently missing out on. That money could come in handy for families struggling to make ends meet in these times of rising costs.
Predictably, Direct File is overwhelmingly popular with the American public. More than 90% of people who used Direct File last year said that the tool is “Excellent” or “Above average.”
The user testimonials speak for themselves. “It was the fastest I’ve ever done my taxes,” said one user. “I wish everyone could do their taxes that easily,” said another.
It’s not just popular with those who’ve used it. Direct File has been cheered by more than 140 members of Congress; 16 attorneys general; 134 leading experts on the U.S. tax system; and more than 250 national, state, and local organizations representing all 50 states, the District of Columbia, and Puerto Rico.
During his confirmation hearing, Treasury Secretary Scott Bessent said he would commit to keeping Direct File in 2025. However, amid the current chaos happening in the federal government, its future in 2026 and beyond is less certain. Big tax prep corporations have been handing out cash to opponents of Direct File in Congress in the hopes of gutting the program.
For Direct File to remain an option in future years, it’s critical that taxpayers take advantage of the tool right now. Widespread participation will help solidify the future of this important service.
So if you haven’t filed your taxes yet, go to directfile.irs.gov to see if you’re eligible.
