IRS to Make Direct File a Permanent Option for Filing Federal Taxes

Internal Revenue Service

WASHINGTON, D.C. — The Internal Revenue Service (IRS) has announced that Direct File will become a permanent option for filing federal tax returns starting in the 2025 tax season. This decision aims to simplify the tax filing process and provide more free electronic filing options for taxpayers.

The IRS plans to expand Direct File’s availability in 2025 and beyond. This includes covering more tax situations and inviting all states to partner with the program. The agency will release additional details on the expansion in the coming months.

This move follows a successful limited pilot during the 2024 filing season. In this trial, 140,803 taxpayers across 12 states used Direct File to submit their taxes. The IRS analyzed data from the pilot, held meetings with various stakeholders, and gathered feedback from users, state officials, and tax representatives. They also received input from hundreds of organizations and more than a hundred members of Congress. While some stakeholders feel current free electronic filing options from third-party vendors are adequate, the majority expressed a desire for more no-cost filing options.

IRS Commissioner Danny Werfel recommended making Direct File permanent, citing user satisfaction and improved ease of tax filing as key factors. Treasury Secretary Janet L. Yellen accepted his recommendation, paving the way for the program’s expansion.

“The clear message is that many taxpayers across the nation want the IRS to provide more than one no-cost option for filing electronically,” said Commissioner Werfel. “So, starting with the 2025 filing season, the IRS will make Direct File a permanent option for filing federal tax returns. Giving taxpayers additional options strengthens the tax filing system. And adding Direct File to the menu of filing options fits squarely into our effort to make taxes as easy as possible for Americans, including saving time and money.”

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The Power of Direct File: Revolutionizing Tax Filing and Efficiency

Making Direct File permanent has significant implications. First, it provides taxpayers with an easy, cost-free option to file their taxes electronically. This is particularly beneficial for low-income individuals and families who may struggle with the costs associated with other filing methods.

Additionally, expanding Direct File can streamline the tax filing process. By offering a straightforward, user-friendly platform, the IRS can reduce common errors that occur with paper filings and third-party software. This efficiency benefits both taxpayers and the IRS, leading to faster processing times and quicker refunds.

Moreover, Direct File’s expansion could encourage more people to file their taxes electronically. Electronic filing is generally safer, as it reduces the risk of lost documents and identity theft associated with mailed returns. It also helps the IRS manage and process returns more effectively, ensuring better compliance and accuracy in tax administration.

For the states, partnering with the IRS on Direct File means potentially integrating state tax returns with federal filings. This could simplify the overall tax filing process for residents and improve coordination between state and federal tax authorities.

In summary, the IRS’s decision to make Direct File a permanent option starting in the 2025 tax season represents a major step forward in tax administration. By providing more free electronic filing options, the IRS aims to make the tax filing process easier, more efficient, and more accessible for all Americans. As the IRS continues to refine and expand the program, taxpayers can look forward to a smoother, more streamlined tax season.

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