After months of rumors and updates, the Internal Revenue Service (IRS) has finally released its internal rival to TurboTax with the aim of improving accessibility and simplifying 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 appears to be dawning.
The platform is available in both English and Spanish and will benefit millions of people in the US. It offers a hassle-free solution for taxpayers with simple tax situations and could pose a serious threat to existing businesses like TurboTax.
The US IRS launches the Direct File Pilot Program
Direct File targets taxpayers with simple tax situations in twelve US states, and it is estimated that more than 18 million citizens will benefit from the rollout.
According to the tax authorities announcement, the tool is designed to be user-friendly and has no hidden costs. 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 view the calculations in real time, ensuring the accuracy of their returns and potentially saving hundreds of dollars in professional tax preparation costs.
The Treasury Department released state-by-state eligibility estimates for the 12 states in conjunction with the launch of the program. About 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.
Underlining the importance of Direct File, Deputy Secretary of the Treasury Wally Adeyemo said: “Our priority in launching this new service is to save taxpayers time and money that they can spend on themselves and their families.”
Natalie Quillian, the president’s deputy chief of staff, added: “The launch of Direct File is part of (President Biden’s) overall vision to improve the everyday lives of hardworking Americans and leave no one behind.”