Free Federal Income Tax Return – IRS Direct File can stand out from the crowd by combining personal and payroll information to start filing your federal taxes.
Danni Santana has spent seven years as a business editor and journalist covering sports, retail, restaurants and now personal finance. Most recently, he was the sales editor at Business Insider. He is a graduate of CUNY’s Craig Newmark School of Journalism. His greatest loves outside of the newsroom include running, cooking, playing video games and collecting sneakers.
Table of Contents
- Free Federal Income Tax Return
- Free Federal Tax Prep From The Irs
- I Tested Irs Direct File. The Free Tax Software Lacks One Key Feature It Needs To Compete
- Tax Forms And Free Tax Help
- Understanding Your Income Tax Filing Options
- Tax Brackets And Federal Income Tax Rates
- Still Need To File Your Taxes? Free Tax Help Is Available
- Federal Income Tax Basics
- Vita Free Tax Preparation
Free Federal Income Tax Return
IRS Direct File is now available to all eligible taxpayers in dozens of states just one month before the deadline to file their federal income tax return.
Free Federal Tax Prep From The Irs
This story is part of Taxes 2024, which covers the best tax software, tax tips, and everything you need to file and track your refund.
Direct File has backup enabled with all accounts. The IRS launched a pilot application for Direct File on January 29, but only for a pre-selected group of government employees to file their taxes.
Over the next few weeks, taxpayers were able to sign up to use Direct File in waves, allowing new users to register in short windows before the IRS closed its – it again. Now the IRS is ready to take the training wheels off.
Since I live in New York, one of 12 states where Direct File will accept federal tax returns in 2024, I was able to test the program. Due to multiple Direct File income limitations, I was unable to complete my return this year. service
I Tested Irs Direct File. The Free Tax Software Lacks One Key Feature It Needs To Compete
The free filing software is easy enough to use that I can see myself and others using Direct File in the future as the software expands the tax situations it covers. For now, it is lagging behind industry leaders. It has the potential to become a true industry benchmark in the future simply by combining the personal and income tax data that the IRS receives each year.
IRS Direct File is a clean and simple online tax preparation program. They are bare bones. But whatever it offers, it does well.
Before using Direct File, you must create an ID.ME account to verify your identity. This initiation process can be very difficult. I had problems both uploading my driver’s license photos and taking selfies using third-party technology. Then, accessing Direct File with ID.ME requires standard two-factor authentication using your phone.
After entering Direct File, you’ll find a five-step tax return checklist: “You and Your Family,” “Income,” “Disclosures and Credits,” “Your 2023 Taxes,” and “Done.”
Tax Forms And Free Tax Help
The You and Your Family software will ask you for personal information such as your home address, occupation, and date of birth. Note that when entering your postal address, you cannot abbreviate words such as street, avenue or way, which are commonly found in home addresses. This will cause an error message.
Direct File previews the required information each time you run the section. You’ll also find web links that launch pop-up windows with contextual help when you go. At the end of each section or module you add, Direct File will show you a summary of your input to check your work.
This is important because with Direct File you enter most of your tax information manually. Only some questions are answered by clicking on drop-down lists or by answering yes or no questions. In this way, it is very similar to FreeTaxUSA and Cash App Taxes. There is also no option to upload a W-2 or upload last year’s tax return to get started.
This year, the IRS has taken into account direct file restrictions. The new program has important loopholes, including income limits and restrictions on the types of loans you can apply for. Furthermore, you can only use this filtering option if you take the standard product.
Understanding Your Income Tax Filing Options
Two other glaring holes that Direct File makes very clear to the user when they complete a return are that the program only accepts federal returns from 12 US states: Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. Direct File also allows you to report earnings from just a few sources:
If your answers indicate that you live in a state outside of the 12 states above or that you need to report income from an unsupported tax form, Direct File will show you a warning message with a link to this IRS page. your taxes this year.
IRS Direct File also doubles down on making sure you don’t file an incomplete tax return. He will ask you about your sources of income through a tax form and also ask questions about your tax situation to make sure you have all the forms you need. If one of the forms you need is a 1099-DIV, 1099-R, or any other form that is not supported by IRS Direct File, you will receive a similar warning message.
While this extra step may be a bit redundant for experienced DIY tax preparers, it can be very helpful for newcomers. I would also say that it is similar to TurboTax in that it goes the extra mile to keep your hand in this situation.
Tax Brackets And Federal Income Tax Rates
When you’re ready to file, Direct File will show you a page that shows your total federal tax return or the amount you owe. I guess it’s a little different when the IRS tells you what you owe, not a third party. The file also just explains how the program calculates the number. If you receive a refund, DIRect File allows you to receive your refund via direct deposit or mail.
IRS Direct File’s contextual help is the same as most online tax preparation software. But its chat function is very limited.
When you click on the Chat button in the upper right corner of the screen, the application will launch a new tab where you write your name and a general question about using Direct File . However, you cannot ask questions about your tax situation. In fact, Direct File clearly tells you not to include any financial information in your application.
“We are not your tax advisors and cannot help you with your specific questions about tax eligibility or credits you may have,” the page says. This is a major step by the IRS to make it clear to users that Direct File only serves as a tax preparation service.
Still Need To File Your Taxes? Free Tax Help Is Available
IRS Direct File is currently only available in English. But the group is working on developing a Spanish version as well. The app currently lets you switch between English and Spanish, which prompts this pop-up explaining that the latter is coming.
After testing IRS Direct File, I was impressed with how easy the program was to use. The service offers clear instructions and gives you an idea of how close you are to completing your return.
But there are some missing components that I expect to see as part of the release. For starters, there should be a widget at the top of the screen that updates your refund amount or what you owe when you enter your tax information. All online tax filing programs seem to have it. Direct File should do the same.
Direct File forces you to file your tax return in a specific order. Although you can go back to any part of the completed return via the checklist, you cannot go directly to deductions and credits, for example. Not all online tax filing software lets you go ahead, but I love the ones that do.
Federal Income Tax Basics
One thing that surprised me is that Direct File doesn’t even integrate the entire library of tax resources from the IRS. I expected to see a tab named “Help” to refer to during the test. After all, it helps taxpayers “understand and fulfill their tax obligations and enforce the law,” according to the IRS website.
The contextual help built into tax software is solid, but in our opinion, IRS Direct File has to be the online tax software with the best contextual help and resources. It may be so in the future. Currently, this designation goes to TurboTax, H&R Block, and FreeTaxUSA.
Finally, the IRS will have a great opportunity in the coming years to integrate consumer tax and personal information into Direct File. If it was implemented with such care and concern in the first year, it might not be possible in 2024. But since the IRS is already receiving tax forms from your employer, I can see a future where your basic personal information and W-2 will be available. it will be provided to you automatically after you create an account. The merger gives Direct File a competitive edge in the market in addition to its free pricing.
This year, IRS Direct File is not suitable for most people. This is not due to the operation of the tax software, but due to the protective bars that have been put in place
Vita Free Tax Preparation
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