The IRS Wants to Make It Easier to File Your Taxes

By: Anneken Tappe · October 24, 2023 · Reading Time: 2 minutes

What is Direct File?

The IRS will launch its free tax preparation software Direct File, similar to TurboTax (INTU) and its competitors, in time for the next filing season.

For the initial launch in February 2024, the free software will go live in just 13 states. The program will be available on both mobile and desktop and can be used in both English and Spanish.

Simplifying 2024 Taxes

Direct File will be rolled out on an “invite only” basis so the IRS can test it out, limiting it to states that don’t have an income tax, including Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Residents in Arizona, California, Massachusetts, and New York will also be able to access the program.

Leaps & Limitations

Direct File is designed to be an easy, secure, and fully free way for Americans to file taxes.

However, at this stage, it is intended only to help those with simple tax returns, meaning that the pilot version of Direct File will only accept basic forms of income, tax credits, and deductions. Notably, it does not currently cover self-employment income. Additionally, the program’s users will not be able to itemize their deductions at this point.

Nevertheless, Direct File could be an easy, and more importantly affordable, solution come tax season.

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