Filing Taxes Is About To Get Easier for Many Americans

By: Anneken Tappe · June 04, 2024 · Reading Time: 2 minutes

Free federal tax filing is here to stay. The Internal Revenue Service (IRS) has officially invited every U.S. state to offer its Direct File program to American taxpayers starting next year.

The service was piloted across twelve states in the 2023 tax season, and successfully processed 140,000 returns, helping save Americans a whopping $5.6 million in filing fees.

Praise and Pushback

Direct File has garnered strong support from many Americans. In an IRS survey of taxpayers who used the service, the vast majority gave it a positive review (90%) and said it increased their trust in the IRS (86%).

But where does this leave companies like H&R Block (HRB) and TurboTax-owner Intuit (INTU)? Both companies have pushed back against the IRS program, arguing that it is redundant to tax filing services already offered in the private sector. The IRS maintains that Direct File is not meant to replace those services.

Free Tax Filing

All states will now have the option to offer Direct File for the 2024 tax year, meaning next year’s filings. However, it’s still to be seen if all states will opt in and make Direct File available.

Additionally, the service is currently intended for filing simple returns only. The IRS plans to expand it to accommodate more complex tax situations in the future.

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