- The IRS is launching a Direct File Tax Payment Program that will provide free tax filing to residents of 12 states.
- Direct File is the result of President Biden’s Inflation Control Act of 2022.
- The program will benefit 19 million taxpayers this spring, potentially saving the average taxpayer $160.
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The Internal Revenue Service and the U.S. Treasury officially launched the Direct File Tax Program on March 12th.
direct file Currently available in both English and Spanish, it is being piloted in several states and offers Americans a way to file their taxes for free. Residents of 12 states are eligible for the program, but there is no clear timeline for expansion yet.
Taxpayers who may benefit from Direct File include parents claiming income taxes or child tax credits, recent graduates paying interest on student loans, and retired seniors. According to the Treasury Department, that includes Social Security income.
Direct File allows taxpayers to file taxes directly from their smartphone, laptop, or desktop computer. Although the program cannot handle complex tax information such as gig work-based income, the Treasury Department estimates that one-third of all federal income tax returns could be filed through Direct File, with approximately $19 million filed this spring. estimated to benefit taxpayers.
Direct File was developed by the IRS in response to President Joe Biden’s Inflation Reduction Act of 2022. The program is intended to “save taxpayers time and money,” according to a press release from the Treasury Department.
Millions of taxpayers in 12 states could benefit from Direct File
Currently, residents of California, Arizona, Florida, Massachusetts, New Hampshire, Nevada, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming are eligible.
The Direct File program provides taxpayers with a clear calculation of the taxes owed and expected tax refunds. A government official said about 15,000 taxes have been directly filed so far in eligible states.
Americans whose primary salary in 2023 comes from gig work or business income or who claim: savers credit or not eligible for premium tax credit.
The official said the agency looks forward to continuing to expand the program to cover more taxpayers and more types of tax returns as the program expands.Pilot program — starts February 28th — He said they provided valuable feedback.
“Direct File provides taxpayers with the numbers and explains the credits they are eligible for, ensuring they receive their full refund,” Deputy Treasurer Wally Adeyemo said in a press statement. “Our priority in launching this new service is to save the taxpayer time and money so he can spend it on himself and his family.”
IRS investments align with Biden’s economic plan
The average taxpayer can save $160 in filing fees by using Direct File, and many Pilot users have saved as much as $400, according to Natalie Quillian, the President’s chief of staff. Expanding eligibility to other states could save Americans $11 billion a year.
“This is an example of how our administration is working to make the government work better and smarter for Americans and create tools that make life easier for working families.” Quillian said.
Thanks to increased funding from the Inflation Control Act, the IRS answered more than 3 million calls last year and call wait times were significantly reduced, administration officials said.
Biden’s latest budget was also released this week. suggestion It aims to raise the minimum corporate tax rate by raising the minimum income tax on billionaires and raising the corporate tax rate to 28%. However, the proposal to increase taxes on the ultra-wealthy is likely to be opposed by most Republicans.