Free tax filing, now and forever. (Actual taxes still not free)

May 30, 2024 1:04 PM

The IRS announces that "Direct File will be a permanent, free tax filing option." Despite years of lobbying from the likes of Intuit and H&R Block, the IRS ran a successful pilot program of its Direct File program with 12 states. Today, they announced that the program will be permanent and invited all states to participate.
posted by Mr.Know-it-some (22 comments total)

Now do national mail-in federal ballots!
posted by Abehammerb Lincoln at 1:14 PM on May 30 [12 favorites]

Thank you to Elizabeth Warren!
posted by Gadarene at 1:24 PM on May 30 [25 favorites]

I am so excited about this!!!
posted by jessamyn at 1:28 PM on May 30 [3 favorites]

Intuit saw a $100 drop in their stock price this week. Also, you know that somewhere, Grover Norquist is crying over an ice cream cone.
posted by NoxAeternum at 1:30 PM on May 30 [7 favorites]

Mod note: One comment about a typo in the post deleted and typo fixed. Carry on.
posted by loup (staff) at 1:32 PM on May 30 [1 favorite]

This is great. Thanks, Joe Biden!
posted by sunnybird at 1:39 PM on May 30 [9 favorites]

Do the states have to agree?

Will it be free for any filters, or will some categories of people have to pay a fee?

Will it actually be designed well?
posted by rebent at 1:55 PM on May 30 [1 favorite]

I hope this provides motivation to state revenue departments (and the IRS) to look into doing something similar with state income taxes. I live in a state that was in the pilot program, but I work in a state that had a state tax.
posted by shenkerism at 2:05 PM on May 30 [4 favorites]

GOOD NEWS
posted by rrrrrrrrrt at 2:24 PM on May 30 [1 favorite]

Do the states have to agree?

Will it be free for any filters, or will some categories of people have to pay a fee?

Will it actually be designed well?

I think the states may have to agree. I should note that states participating in the pilot included Texas, Tennessee, and Wyoming, pretty dark-red ones to put it mildly.

It's repeatedly described as "Free" and there's been no indication of charging any category of people a fee.

It's designed very well. It already exists so this isn't a hypothetical - I've seen screenshots and videos, it's a well-built piece of software.
posted by Tomorrowful at 2:29 PM on May 30 [4 favorites]

This is a legit big deal. It makes me happy not to think about paying $19.95 to file each of my kids' state taxes next spring! But less selfishly, it should save a lot of people money who really need it.
posted by wenestvedt at 2:39 PM on May 30 [6 favorites]

I had no idea that this was at all likely! Almost makes me wish it was closer to tax season so I could try this (almost).
posted by AdamCSnider at 2:48 PM on May 30 [1 favorite]

The states involved in the pilot run either:

* Have no state income tax, like Texas and Florida, and thus only a federal return would be required, or

* Already have a state run free file option, such as CalFile in California.

The majority of pilot states were no-tax states, only three-ish were in the second category. So I think that extending Free File must involve state cooperation to develop or integrate state free file programs.
posted by muddgirl at 3:34 PM on May 30

I should add that two states partnered with Code for America to offer their free file solution - Arizona and New York. https://www.fileyourstatetaxes.org/
posted by muddgirl at 3:38 PM on May 30

This will still only be for dirt-simple returns, right?
posted by Thorzdad at 3:39 PM on May 30

I AM SO HAPPY!!! I know everyone else is in the other thread cheering Trump’s conviction, but as an accountant who has volunteered for years with helping low and middle income people file their tax returns, I know this is going to help so many Americans. Too many taxpayers have been fleeced by the for-profit tax prep industry. Even if you qualified for free-file through the paid services, the companies had sneaky ways of upcharging their clients. The most egregious examples are those individuals who were demonstrably extremely low income, but they had jobs where their employer reported their wages as 1099 income. Those folks would have to file their 1040s as if they were small businesses, and the for-profit tax preparers would charge them for each form they processed. An utterly shameful example of a “poverty tax.” I truly commend the Biden Administration for pushing this program forward, it will help people who truly need the money.
posted by stowaway at 4:39 PM on May 30 [21 favorites]

Unfortunately it is just the “dirt simple” returns, but I’m hopeful that the success of the program leads to an expansion of the scope. The IRS modeled parts of the Direct File program on the VITA program, and VITA has a more expansive scope. (For example, under VITA we can prepare returns for taxpayers with 1099 income, various sources of retirement income, etc.)
posted by stowaway at 4:50 PM on May 30 [7 favorites]

I filed my taxes using this program and the companion state free file program in New York. It was great. So, so much easier than filling out the paper forms. And I got my miniscule tax return super fast. I'm glad they are making it permanent and expanding it to all states.
posted by DEiBnL13 at 7:45 PM on May 30 [3 favorites]

I don’t know what dirt simple means to you, but I itemized my deductions, had a small amount of 1099 income, and there were a variety of other forms available when I used direct file earlier this year. I found it easier to understand than commercial programs I used in the past, and instructions for filling out forms were conveniently linked within the software. Glad it’s rolling out to more people!
posted by momus_window at 9:09 PM on May 30 [6 favorites]

Still not available for American citizens living abroad, despite the wildly disproportionate complexity of our filing requirements (32 page return this year, would have been 7 pages if I lived in the US), the 5+-figure fines we face for even trivial errors or omissions in reporting our bank accounts, pensions, inheritances, and business ownership, and the IRS regulations that prevent us from saving from retirement using mutual funds or self-funded pensions in the countries where we live and work.
posted by nanny's striped stocking at 3:16 AM on May 31 [3 favorites]

I would imagine that, as the IRS realises how powerful free filing is for administering a tax system, there'll be efforts to move as many processes as possible into the free system. Tax code changes? Update the free system, automatic compliance. Auditing becomes a lot easier because the system can alert on good-faith mistakes. It's a lot easier to build automatic calculators into the software for obscure exceptions, and implementing these rules does sometimes uncover bugs in the tax code (I have a friend who runs a rules-as-code initiative for the state government, and has brought a few laws involving dates back to the lawmakers to explain why their laws are broken.)

I think the biggest benefit of all is that Grover Norquist has to eat shit over this
posted by Merus at 7:21 AM on May 31 [9 favorites]

The political pothole that needed filling decades ago.
posted by Brian B. at 8:43 AM on June 1 [3 favorites]