IRS has launched its free tax filing service, Direct File, in 12 states
IRS has launched its free tax filing service, Direct File, in 12 states
Direct File has many limits, but nearly 19M people in 12 states may be eligible.
"Direct File provides a free, secure option for taxpayers with simple tax situations in 12 states to file their taxes directly with the IRS," the Treasury Department said. "Direct File is easy to use, with no hidden junk fees, and works as well on a smartphone as it does on a laptop, tablet, or desktop computer. Direct File shows taxpayers the math so they can be sure that their return is accurate, and they are getting the refund they are entitled to."
You can check whether you qualify to use the system at directfile.irs.gov. Based on the eligibility restrictions in the IRS program, the Treasury Department said it "estimates that one-third of all federal income tax returns filed could be prepared using Direct File."
But there are many limits that would prevent taxpayers from using the system.
Meanwhile, here in Sweden everyone can logon to the tax authority's website get a prefilled out form ans digitally sign it in 2 min total.
This has been the norm for me the last 5 years, before that I used the preprinted tax form in the mail, I signed it and sent it back. Done.
The US needs to make it easy and convenient to pay taxes.
The problem is that companies like Intuit have resources/lobbyists and really want to maintain their position in the market.
Your system sounds wonderful though.
Eh, in New Zealand it's been one click digital for a very long time too.
I was told they don't have modern tax forms accross the US because of lobbying from companies like Turbo Tax.
In the US, I get to spend a few weeks stressing waiting for various forms to be mailed back, then spend 5 hours answering questions on a tax software, to finally get a result of how much i owe/should pay. Then I do it on one or two competitors to see if the math adds up, and most of the time it doesn't.
If I'm lucky, it's only five hours.
In the UK, the vast majority of people in normal jobs don't need to do anything as it is all dealt with by the employer. Only those with more complicated situations need to do anything, and even then it's normally relatively painless.
Same here, unless you do something complicated, you don't need to chabge anything
It's easy if you only have income from one job. If you have income from any other activities they will not have the information required. Things like rental property income, selling items on sites like Etsy requires inputting your expenses for those activities. Sites like eBay and Etsy will send you an income statement called a 1099. This includes all of the money for all of your transactions including shipping that you charged the customer. So you have to deduct your expenses from that amount, unless you want to pay taxes on money you didn't actually earn. There are other items that count as deductions as well, including property tax deductions in certain states.
Here in a Spanish province the app had the correct information prefilled with my job changes, the stupid 50 euros I earned from the gamestop craze and all the special savings accounts that were dax deductible. I only had to add the special rent deduction (amount paid and % of that amount that's was mine), and the app calculated the amount that I was to be deducted from that and my age.
It's great, in has an explanation of all the deductions, it lets you edit everything before submitting, and it's free.
Not every country has the same relationship to their government. In Switzerland for example our government does not know what we own and have earned, we declare it ourselves. It is fully digital but still takes longer than 5 minutes (it usually takes me around 30 minutes with an income to declare as well a some stocks and other things).
I guess the US has a similar relationship to their government.
These states:
- Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming
- Arizona
- California
- Massachusetts
- New York
- Washington
Strange way to list the items, but thank you.
It’s listed that way on the Direct File website because the top group of states don’t have state income tax (so you don’t need a separate state return), and the others the Direct File tool has some kind of arrangement to redirect you to the state’s platform at the end to file your state return (on the website there’s a separate explanation for how each of them work).
These states account for 147 million people, about 43% of the country. Not too bad for a pilot program.
Back in the mid 90s, when I was a very low income earner and filing the 1040EZ, I could call an IRS phone automation and input my SSN and the relevant numbers and be done in minutes. Did that go away with the internet? Seems like they were on the ball technically then.
It went away because Intuit and other tax preparation companies
bribedlobbied the government to keep tax filing difficultInputting your ssn on the phone is pretty wild.
There's dozens of free file options for low-income earners. Head to the IRS website and find them for yourself.
For over a decade, the IRS knowingly listed fake free options on their site because Intuit paid them to. Victims were sent to Intuit-owned sites that promised free filing, but would then be tricked into corners requiring them to pay to actually file (usually after spending a great deal of time and energy to get to that point). Even after public backlash, the IRS continued to list the sites as free because of lobbying cash from Intuit. The IRS was complicit. They were lying for profit. Fuck Intuit and fuck the IRS.
The IRS list should never, ever be trusted. They burned that bridge all the way into the river in my opinion.
The only actual free tax filing option out there is FreeTaxUSA.com . I know the name sounds dumb but this has been around for years and does what it says it does. Some types of filings may incur a charge, but the charges are very low and there is never any trickery. Also, it's easier to use than TurboTax.
Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Wyoming, Arizona, California, Massachusetts, New York, And Washington are the states you can use this in, since the site in the OP just gives you a link to the IRS website that lists the states.
Yeah, was bummed my state isn't supported this year. Hopefully next year.
Hope while inaction or call your local politicians
Thanks for this!
I don't think I'd be able to use this service even if it existed in my state, my self-employed taxes are apparently too complicated even though I currently only have one contract/employer. They need to simplify the tax code.
You could probably use the IRS’s free fillable forms (https://www.irs.gov/e-file-providers/free-file-fillable-forms; totally free and works for a lot of forms), but it’s harder to use.
This is what I use but it takes 4-5 hrs usually.
Imagine going to the only grocery store available, there are no prices on any of the items, you shop there because you're starving and have no choice.
You go to the checkout after each time you shop and there is a single cashier that says this:
"Fuck you. In about a couple months we'll demand that you figure out how much you owe us. If you don't figure it out then we'll potentially place criminal charges against you. Thanks for shopping here."
You realize that you have no fucking clue about how much the stuff you bought costs because it changes all the time and nothing is labelled and there's no system for keeping track.
Welcome to the tax system in America.
It only works that way if you are willfully ignorant. As does everything else in the world.
You can easily calculate your taxes, and your necessary withholdings from that on your W4. There's even a stupid simple grid to match your income to on one of the pages...
It's like a grocery store where you know the prices, but they're rounded to the nearest $0.01. but at checkout you have to make up the difference that wasn't shown on the price tags. Which overall constitutes a minimal portion of your overall bill.
This is great, but I still don't understand why we even need to file anything.
To give rich people and corporations the chance to fudge the numbers and pay no tax of course!
For one, to claim deductions (such as for children, if you made improvements to your house to make it more energy efficient, etc, or if you itemize instead of taking the standard deduction).
Would've liked to know this 2 days ago before I filed my taxes.
Well I'll try it out next year.
Anybody here used this yet? How is it?
Personally I don't plan to use it
Can't, I did a futures contract so I need to file Form 6781 (that's what it was in 2022, so it might be similar this year)
This is the best summary I could come up with:
The service available in English and Spanish underwent "weeks of successful testing" before the launch, the US Treasury Department said today.
"Direct File is easy to use, with no hidden junk fees, and works as well on a smartphone as it does on a laptop, tablet, or desktop computer.
Direct File shows taxpayers the math so they can be sure that their return is accurate, and they are getting the refund they are entitled to."
"Thousands of taxpayers across all 12 states have already successfully filed returns during the pilot's testing phase," the Treasury Department said.
The government is calling this year's version of Direct File a pilot program.
The pilot is also available in eight states without an income tax: Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
The original article contains 643 words, the summary contains 132 words. Saved 79%. I'm a bot and I'm open source!
yknow, it would be cool if there was like, income tax.
And only that. I think that would make me happy.
It does seem so complex having all these different taxes on everything rather then just taxing it all from incone
it really is. The primary reason they do it is because it makes tax more flexible, but realistically, income tax is realistically going to account for everything.
If you spend more, you're making more, or spending less and spending more elsewhere, so it really doesn't matter. Just having income tax on a federal and state level would be so much nicer. Because then you don't have to think about your tax at all. If you work with an employer, they would basically write that shit for you. If you work for yourself, it's easier than it currently is, most likely.
tangential rant but property tax is actually fucked and can eat dicks. I bought the land, fuck you, leave me alone.
Would be better if people would vote for candidates that would work to eliminate income taxes entirely.
Cute. Unrealistic, but cute.
Or, at least for under 100K/yr.
Silly MedPiggy,
Taxbreaks are for Billionaires.100k will be minimum wage in 10 years based on inflation but tax brackets would still be at the top....
the US thinks if it fixes a problem that all fifty states have but only fix it in a handful of states that it has solved the problem one hundred percent
meanwhile the citizens go "We have to start somewhere this is a great thing!" and the leaders never get criticized sometimes the opposite people vote them back in
then that is all you hear until the issues reach critical because everything was quarter assed at best
this is how abortion, cannabis, all kinds of insurances, education, food assistance, etcetera already are played in the US
and at that point the citizens and the states are to blame for why things suck so hard
"well they should have voted better over there it is their faults that state sucks!"
which drives us further from solutions
To your first point. This more closely follows current software development methods. Get the core service stood up and out to a set of users, then flesh out the more advanced features. Most of the states in the first round have no state income tax to deal with.
I was so excited to do this to show interest, and then they brought up the ID. Me.
Never heard of it, so I go and look.
You expect me to fucking sign up for some weird 3rd party bullshit, when I would be happy to do that with an actual fucking government supplied way of letting you know I’m the actual person filing my taxes?
No, man. Fuck that, and fuck your stupid ass way of handling it.
I had such high hopes for it, but with the embarrassment of ID.me I just went back to FreetaxUSA.
They're working to improve login.gov to support the level of user verification needed for this service, but it isn't there yet. Hopefully next year when tax time rolls around again.
Thank you for letting me know.
I probably came off strong, but I am majorly disappointed. This was one step closer to how other countries do their taxes, which is mostly just signing and sending it back. As it should be.
Hopefully we can get something before they shut it down, because I can see a LOT of people seeing that sketchy ID.me and noping out just like I did.
This is exciting, now just to wait until it's available in my state.
They have had a list of websites that will file at least federal taxes for free. Some have free state returns as well, however, your Adjusted Gross Income must be less than $79,000.
Never, ever trust the IRS list of "free" file sites. The IRS has a long history of posting fake "free" filing links. They were accepting bribes to keep Intuit's fake free sites listed for over a decade. The IRS list should never, ever be trusted.
FreeTaxUSA.com is the only trustworthy free-filing site I am aware of. For more complex filing, they have some (low) fees, but they are very transparent about all of that. Plus, they are easier to use than Intuit/TurboTax.
Haha this is only their attempt to collect more data (than required on taxes) on US Citizens. Look at the process to sign up. It's obvious. If they really wanted to help the population file their taxes, they would just not require filing at all. They already know how much we make, so they know what we owe. At most, if liability is an issue, they should be sending us the tax information they already have on us and we just check off if its correct or not.
Bro... you've always had to supply data to the tax office so they could do their job - things like receipts. Now you get to do so digitally and easily, like most European countries with half a brain has done.
Do you know how much you save in tax spending by just automating and digitalising taxes? My guy, any other way is a waste of money and time, for the sake of wasting money and time.