After months of rumors and updates, the Internal Revenue Service (IRS) has finally launched its internal rival TurboTax with the goal of improving accessibility and making the tax filing process easier.
With the launch of the Direct File Pilot Program, a key initiative under President Biden's Inflation Reduction Act, a new era of free and secure tax filing appears to be emerging.
Available in both English and Spanish, the platform will benefit millions across the United States, offering a hassle-free solution to taxpayers with simple tax situations and could pose a serious threat to existing companies like TurboTax.
US IRS launches Direct File pilot program
Direct File serves taxpayers with simple tax situations in 12 US states, and it is estimated that more than 18 million citizens will benefit from the implementation.
According to the IRS announcement, the tool is designed to be easy to use and has no hidden fees. It is a versatile tool that can be accessed on smartphones, tablets, desktops and laptops, making tax filing more accessible across the board.
The IRS says early adopters of the Direct File pilot program have already reported significant savings. This tool allows taxpayers to view calculations in real time, ensuring the accuracy of their returns and potentially saving hundreds of dollars in professional tax preparation fees.
The Treasury Department, in conjunction with the launch of the program, released state-by-state eligibility estimates for all 12 states. About one in three federal income tax returns could be prepared using the new free tool.
Currently, eligible citizens of California, Arizona, Florida, Massachusetts, New Hampshire, Nevada, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming can use Direct File.
Treasury Undersecretary Wally Adeyemo highlighted the importance of Direct File: “Our priority in launching this new service is to save taxpayers time and money they can spend on themselves and their families.”
Natalie Quillian, the president's deputy chief of staff, added: “The launch of Direct File is part of [President Biden’s] “overarching vision to improve the daily lives of working Americans and leave no one behind.”
