The IRS is expanding its Direct File program nationwide in 2025, providing taxpayers in all 50 states with a free tax filing option. This initiative aims to make tax filing easier and more accessible to individuals across the country. Previously available to limited taxpayers in 12 states during the 2024 filing season, Direct File proved to be a success with over 140,000 users filing returns and saving an estimated $5.6 million in tax preparation fees.
At Extreme Investor Network, we believe that financial freedom starts with understanding and managing your personal finances effectively. That’s why we are excited to see the expansion of Direct File, as it will provide more Americans with a convenient and cost-effective way to file their taxes. With the potential to gradually expand the scope of Direct File to support a wider range of tax situations, this program will be particularly beneficial to working families.
In the Direct File pilot program, taxpayers in 12 states were able to file simple returns, including those with Form W-2 wages, Social Security retirement income, and interest of $1,500 or less. However, certain filers, such as gig economy workers and self-employed individuals, were excluded from the pilot. Filers also had to claim the standard deduction for their filing status.
IRS Commissioner Danny Werfel mentioned that more details about the expanded scope of Direct File for 2025 will be shared later this year, including which states will join the program. Direct File is meant to complement other filing options, such as Free File, which is a partnership between the IRS and private tax software companies. With the goal of providing taxpayers with additional options for filing their federal taxes, Direct File is not intended to replace existing commercial providers who play a crucial role in the tax system.
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