Planned Giving

Text Resize
Print
Email
Subsribe to RSS Feed

Wednesday May 22, 2024

Washington News

Washington Hotline

Direct File Pilot Launched in 12 States

The Internal Revenue Service (IRS) was pleased to announce the launch of the Direct File Pilot Program. This new tax software is available in English and Spanish.

The Direct File program is designed to assist taxpayers with simple tax arrangements. It is available in 12 states and is compatible on a desktop computer, laptop, tablet or a smartphone. The Direct File program shows taxpayers the math to make certain the returns are completed accurately. There is also customer service support for Direct File users. The initial test group claimed that Direct File is "simple and straightforward to use."

Direct File has been developed with funds from the Inflation Reduction Act and is designed to make it easier for most Americans to file their taxes. The IRS has estimated there are 19 million potential taxpayers in 12 states who are eligible to use the simplified tax filing tool. This includes 5.2 million taxpayers in California, 3.8 million in Texas, 2.8 million in New York and 2.4 million in Florida.

One example of a taxpayer who may be eligible to use Direct File for this first season would be a parent with W-2 income who may claim the Earned Income Tax Credit or the Child Tax Credit. Another example is a recent college graduate who has W-2 income and pays student loan interest. It is also available for senior citizens with Social Security income.

Deputy Secretary of the Treasury Wally Adeyemo stated, "Direct File ensures taxpayers get their full refund by showing them the numbers and explaining credits they are eligible for. Our priority in launching this new service is to save taxpayers time and money they can spend on themselves and their families."

Another affirmation for the program was given by National Economic Council Advisor Lael Brainard. She noted, "Direct File will offer millions of Americans a free and simple way to file their taxes, with no expensive or unnecessary filing fees and no upselling, putting hundreds of dollars back in the pocket of working families each year."

The IRS notes that the English and Spanish versions of Direct File are intended to be easy to use. There are several steps that are designed to make it accessible for most taxpayers:

1. Check Your Eligibility — The direct file program is available in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

2. Gather Your Personal Information — You should have your Social Security number or Individual Tax ID Number, your bank account and routing number, the adjusted gross income (AGI) and exact refund amount from your prior tax return, your current address and a self-selected PIN if you e-Filed last year.

3. Organize Your Tax Records — You should gather all your forms which may include Form W-2, Form SSA-1099 for Social Security and Form 1099-INT for income from banks or brokers. Direct File is not available if you have retirement income, self-employment income or business income.

4. Prepare to Claim Credits — Direct File permits you to claim the Earned Income Tax Credit, the Child Tax Credit or the Credit for Other Dependents.

5. Prepare Your Tax Deductions — The Direct File program permits the standard deduction, a deduction for student loan interest and the educator expense deduction. It is not available if you plan to itemize your deductions.

6. Sign in to Direct File — You will need an IRS account with ID.me. If you need to create the account, you can find out more information on IRS.help.id.me.

7. Sign Direct File Electronically — The direct file program requires you to enter your prior-year adjusted gross income or a prior-year self-selected PIN. If you need to find your prior-year AGI, it can be found on line 11 of your Form 1040 or you can use your IRS online account to get your prior year’s tax transcript.

Editor's Note: Direct File is a significant step forward to providing a government filing solution for taxpayers. The initial launch is intentionally limited to specific states, but it will provide information to the government as it continues to build and develop the program. It is likely to be several years before it is fully functional and includes all 50 state returns.

Published March 15, 2024
Print
Email
Subsribe to RSS Feed

Previous Articles

IRS Reminds Taxpayers to Report Digital and Other Income

Many Taxpayers Benefit From "Where's My Refund?"

Rising Traffic on IRS Website

Peak IRS Phone Support After Presidents Day

Initial Rollout of IRS Direct-File Pilot

scriptsknown