The IRS announced this week that Direct File, a free tax preparation software service, will launch in 2024.
Direct File in 2024 is a free tax preparation software that may be used to file one’s taxes in the year 2024. This software provides an alternative to premium services such as TurboTax. (Source: Tax Law)
Trial of Direct File IRS Announces
Direct File, like TurboTax, will be available to Americans to file their 2023 taxes. First-year availability will be limited to Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Arizona, California, Massachusetts, and New York. IRS Commissioner Danny Werfel stated that the IRS will work closely with the states who have agreed to participate in an important test run of state integration in the restricted pilot for 2024, adding that the pilot will enable it to gather crucial data for Direct File’s “future direction.”
Through the trial, the IRS will evaluate and improve Direct File’s technology, customer assistance, state integration, fraud detection, and user experience. The findings will be released when available. Only certain taxpayers in the 13 pilot states can use the service. The IRS is only rolling out Direct File for “relatively simple” returns. The income parameters may fluctuate, but they should include W-2 wage income, Social Security and railroad retirement income, unemployment compensation, and interest income of $1,500 or less. Per the IRS, people who can claim the Earned Income Tax Credit, Child Tax Credit, and Credit for Other Dependents may be eligible.
Users can also deduct teaching expenditures and student loan interest, the government said. According to The Washington Post, only the agency’s credits and deductions will work with the initial software. An anonymous IRS official told the Post that chosen taxpayers qualified for Direct File will receive invites around mid-February.
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