- Some taxpayers will soon qualify for Direct File, a free tax-filing option from the IRS.
- The pilot will begin as an invitation-only service before rolling out to certain taxpayers in 12 states by mid-March.
- In 2023, individual U.S. taxpayers spent an average of $150 to prepare and file returns, according to the IRS.
Eligible states will include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
…
Who qualifies for IRS Direct File
Residents of eligible states with a simple, straightforward return can qualify. The pilot will start with limited types of income, credits and deductions, IRS officials said.
While only certain taxpayers can use Direct File, the bilingual software includes built-in live chat support with IRS assistors.
The pilot will only accept Form W-2 wages, Social Security retirement income, unemployment earnings and interest of $1,500 or less. This means the pilot won’t include anyone with gig economy work or business income.
You must claim the standard deduction to use the Direct File pilot and the system only accepts a few credits — the earned income tax credit, child tax credit and credit for other dependents. The software also accepts tax breaks for student loan interest and educator expenses.
This is how taxation should work in the U.S. if we were sane:
- The IRS sends you a bill or a refund.
- You pay it or deposit it.
The end.
The IRS should be calculating what we owe. We shouldn’t be doing that ourselves or hiring people to do it for us. Maybe we could finally get the wealthy to pay their fair share.
The IRS should be calculating what we owe.
They do. That’s why you occasionally get bills saying “hey you miscalculated by 70 bucks.” They already do the work, they just still make us do it too for… Reasons.
Reasons
AKA Intuit lobbyists
Once for a whole year I would get a letter saying “You underpaid by $30, plz pay.” So I would pay. Then I would get a letter saying “You overpaid by $30, here is check.” So I would cash it. Then I would get a letter saying “You underpaid by $30, plz pay…” There were six or seven of those exchanges. I didn’t cash the last check and the letters stopped coming. 🤷♂️
Or dispute it . This is how it’s done almost everywhere else but the tax lobby have a best interest in this not working this way.
Or…you know bring back home ec classes that teach kids how to survive in the world instead of assuming parents will be able to do it
Sure, bring back home ec classes like that regardless, but that should also have no bearing on a saner taxation system. The one we have is ludicrous.
As an example of how this could work based on how it does where I live;
- When you get a job, open a bank account or a shareholding account you fill in a form telling them your IRD number and tax code. There is a flow chart on the back of the form to help you work out what your code is, but it is derived from the amount of income you expect to earn throughout the year and if you have any special statuses that significantly change how you pay tax (eg, of you have a student loan or owe child support)
- Before you are paid (your income, dividends, interest, profit from share sales etc), the party paying you uses your tax code to determine the percentage tax you owe, then sends the tax plus a filing directly to the IRD on your behalf
- At the end of the tax year, IRD looks at all the filings, totals up all your income, totals up all the tax you’ve paid, checks if you are eligible for certain tax credit, and works out if you’ve paid the right amount of tax
- You get notified of the outcome, and get a chance to correct it (eg, if you’ve made charitable donations and want to claim a credit based on that etc)
- Once the filing is finalised (which happens automatically if you do nothing) you either get a bill in the post, a cheque, or the money deposited directly into your bank account if you’ve nominated one - unless you owe them less that $10, in which case you get a letter saying that they’ve written the debt off and you owe nothing
No muss, no fuss. If you’ve got an interest in a trust or own a company then it gets a bit more complicated and you might need an accountant to file for you, but for 95% of people it’s free, happens automatically, and they aren’t stuck with a big bill at the end of the year
yup. we should all be recieving a 2040x with the left hand side filled out already and we can optionally make the changes in the right hand side if we think its wrong.
Agree. Then TurboTax and other tax preparers wouldn’t be able to rip us off to the tune of billions of $ too.
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All info on the tax forms you use for your taxes could just be sent to the government instead, and they can calculate your taxes. That is how it works in most other countries.
Are you saying your taxes aren’t taken out of your paychecks? Because they’ve always been taken out of mine. Seems like it’s pretty easy for them to bill you based on that. And they can send the bill to whatever address is on your W-2.
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Even if it only took you 15 minutes, and it sure takes a lot of people who get W-2s a lot more than 15 minutes… that’s 15 minutes too long. Why should you have to do the government’s job for it?
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The government should already have a record of how much you’ve been paid every year. Why do they not have that record in your case? Do you not declare your income in whatever job you have?
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FreeTaxUSA.com is free for most types of filings and very inexpensive for complex filings. If you don’t qualify for the new IRS program, the next best thing is definitely going to be FreeTaxUSA.
Agreed, I use them and paid $15 for state filing only. There are other services if you want extra but they’ve been my go to for a couple years now
Used them for the first time this year and it was a great experience. Still can’t figure out what add-on made it not work in my desktop Firefox but that’s minor.
Dear United States, nice to see you finally catching on to what we’ve been doing since 1999.
Love,
SwedenNorway here, I’ve been working since 1995 and I can’t ever recall having to “do my taxes”.
Just out of interest I checked the UK’s system called PAYE, it’s was fully introduced in 1944. The only people that have to deal with bullshit tax returns are people that are probably going to be making enough money to be able to afford someone to sort it out for them anyway.
Sweden: has sane taxation system US: how are we supposed to get middlemen in there to profit off the populace? No no, this won’t work.
Friendly reminder that if your Adjusted Gross Income (AGI) is less than $79,000 you can already do “Guided Tax Filing” for free. If your AGI is more than $79k, you can still do your taxes for free, but have to do them completely manually which is generally considered risky if you don’t know what you’re doing.
Another tip: turbo tax and other tax preparation software charges you money only to file your taxes. You can fill out all of the information on their website for free as long as you don’t file, then use all of the numbers they crunch as a guide when you do your own taxes manually. Basically, you know what all of the numbers are supposed to come out to based on what turbo tax calculated, so if you’re getting something else when you prepare your own taxes you know there’s some mistake in that section that needs to be corrected.
Or use Free Tax USA for completely free federal filing
My comment also applies to state filing, which is not free through Free Tax USA
Their website says state filing is free for people with an AGI of $45,000 or less.
Awesome tip
They should call it Make American Government Payments Incredibly Easy, or Magpie for short.
Tax Hawk is also free for federal returns and has been around for a few years.
I don’t remember what but I have tried it and others and there is always a catch. if it can’t auto download stuff its relatively pants.
