IRS Expands Free Direct Tax Filing Options

In a significant move, the IRS announced that starting next year, residents in Alaska, Connecticut, New Jersey, New Mexico, and 19 other states can file their taxes online for free using various devices including cell phones, laptops, tablets, and desktops. This expansion aims to simplify the filing process as many states are adopting the direct file system allowing taxpayers to easily navigate through their tax situations without incurring additional costs. While 26 states remain to adopt this system, the IRS assures residents in those states that there's still a chance for their states to join before the next tax season. By 2025, improvements will include the capability to handle a broader range of tax situations such as 1099s for interest income exceeding $1,500, deductions for health savings accounts, and various credits that are particularly beneficial for working families. The IRS's plan to gradually enhance the direct file system aims to cover the most common tax scenarios, responding to the needs of millions of Americans. This initiative is not only poised to simplify the filing process but also aims to alleviate the financial burden tax season can impose on working families across the nation.