October 23, 2023
Forget Turbo Tax or Tax Slayer – there’s another way for you to file your 2023 taxes – and did I mention it’s free???
The IRS is rolling out a pilot program called direct file. But since it’s a test program it’s not going to be available to everyone just yet. I’ll explain who gets access to it in a minute…but first…
I told you back in June that the IRS was going to develop and roll out this direct file program using some of that 80 billion dollars over 10 years Congress gave them in the inflation reduction act.
So what’s the benefit of the program? Well, first – it’s a free software that – if all goes well – will be available to all taxpayers. Second, it will give taxpayers the ability to file your taxes electronically directly through the IRS without having to go through a third party. And third — the direct file pilot will be available for your desktop, laptop, tablet or mobile phone.
The question is – who is eligible? Well, initially you have to live in certain states and be a certain type of taxpayer.
To qualify – you must live in Arizona, California, Massachusetts, New York, Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington or Wyoming. For the record – all states were invited to participate but not all of them could integrate their state tax information into the pilot program in time for the roll out. That’s why most of the states participating don’t have state income tax. But for the states participating that do have state income tax – they were able to integrate their state tax systems into the pilot.
The other qualification to participate into the pilot program is — you have to be a certain type of taxpayer with a certain kind of income, or claim specific credits or deductions. Generally – to qualify for this pilot you have to be an individual tax filer with a simple tax return. Your income must be reported on a W2, through Social Security, unemployment or you must have interest income less than $1500 This direct file pilot will accept the earned income tax credit, the child tax credit and credits for other dependents, and will accept the standard deduction, student loan interest or educator expenses. So if you are a business, or you itemize your deductions, you won’t qualify for the pilot program.
It’s important to understand if this pilot program goes well – it will eventually be available to all tax filers, with all kinds of income tax situations. It’s also important that you know this will be an addition to the ways you can file your taxes. It’s not going to replace your tax preparer or your turbo tax software or anything else.
The IRS says it will start informing taxpayers who qualify for this pilot in mid-February but they’re hopeful that as the tax season rolls on more taxpayers will become eligible. If you want to read more about the program I will email the details out to you in my news girl news roundup email so make sure you sign yourself up.
Read more about DIRECT FILE here.
