An electronic system for filing returns directly to the IRS is now available for taxpayers from 12 selected states.
The new system, called Direct File, is a free online tool. Taxpayers in the 12 selected states who have basic W-2s and claim a standard deduction may be eligible to use this tool. This tool creates a free method to file federal income taxes for the tax year 2023.
“Direct File will offer millions of Americans a free and simple way to file their taxes, with no expensive and unnecessary filing fees and no upselling, putting hundreds of dollars back in the pocket of working families each year,” said National Economic Advisor Lael Brainard.
Taxpayers in New York, Florida, Massachusetts, California, New Hampshire, Nevada, Tennessee, Texas, Washington, Wyoming, Arizona and South Dakota who qualify can participate.
The Direct File pilot is part of the agency’s effort to build out a new government service that could replace some taxpayers’ use of commercial tax preparation software. This is bad news for services such as TurboTax, Tax Slayer or H&R Block.
Direct File can only be used to file individual or joint federal income taxes. Taxpayers will still need to file their state taxes separately.
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