After months of rumors and updates, the Internal Revenue Service (IRS) has finally released its in-house rival to TurboTax with the aim of improving accessibility and facilitating the tax filing process.
With the launch of the Direct File Pilot Program, a key initiative under President Biden’s Inflation Reduction Act, a new era of free and secure tax filing looks to be emerging.
Available in both English and Spanish, the platform is set to benefit millions across the US, offering a hassle-free solution to taxpayers with straightforward tax situations, and could pose a serious threat to existing companies like TurboTax.
US IRS launches Direct File Pilot Program
Direct File caters to taxpayers with straightforward tax situations across 12 US states, and an estimated 18+ million citizens are expected to benefit from the rollout.
As per the IRS announcement, the tool is designed to be user-friendly and has no hidden fees. It's a versatile tool that can be accessed from smartphones, tablets, desktops, and laptops, making tax filing more accessible across the board.
The IRS says early adopters of the Direct File Pilot Program have already reported significant savings. This tool allows taxpayers to see the calculations in real-time, ensuring the accuracy of their returns and potentially saving hundreds of dollars in professional tax preparation fees.
The Treasury Department, in conjunction with the program’s launch, released state-by-state eligibility estimates for the 12 states. Approximately one in three federal income tax returns could potentially be prepared using the new, free tool.
Currently, eligible citizens in California, Arizona, Florida, Massachusetts, New Hampshire, Nevada, New York, South Dakota, Tennessee, Texas, Washington and Wyoming can use Direct File.
Deputy Secretary of the Treasury, Wally Adeyemo, highlighted the significance of Direct File: “Our priority in launching this new service is to save taxpayers time and money they can spend on themselves and their families.”
Natalie Quillian, Deputy Chief of Staff to the President, added: “The launch of Direct File is part of [President Biden’s] overall vision to improve the day-to-day lives of hardworking Americans and leave no one behind.”
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