IRS to decide on restoring free tax site amid uncertain future of program
FILE-In this photo illustration, a 1040 Individual Income Tax Return document is seen on a desk on April 15, 2024 in North Haledon, New Jersey. (Photo illustration by Michael Bocchieri/Getty Images)
The IRS enjoyed success with the rollout of its free tax filing website this tax season, which became a hit with people who used the new service.
With more than 140,000 people filing their taxes using the new program, filers claimed over $90 million in refunds, the IRS told the Associated Press.
Although Direct File performed well with users, it’s unknown if the program will be available next year. IRS and Treasury Department officials explain to the AP that they need to examine more data to determine if building out the program is practical.
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The free software allows taxpayers to file directly to the government free and some experts say a nationwide rollout could affect the multibillion-dollar tax preparation industry.
Americans spend over $200 a year to file a return using software or a tax preparer, the Washington Post reported.
The IRS program was available to certain taxpayers in Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
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Four other states with a state income tax also were part of the pilot program — Arizona, Massachusetts, California, and New York. In those four, state tax agencies helped people directly file their state taxes.
Direct File received rave reviews from users pleased with how efficient the program made it for them to file their taxes.
Citing a General Services Administration survey, the Washington Post noted that Direct File users polled rated the service "excellent" or "above average."
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In a separate poll conducted by the Economic Security Project, the advocacy group reported that 60% of users said it took less than an hour to file their taxes on the website, and 61% found the Direct File easier to use compared to other filing systems they have used in the past.
During this tax season, the IRS has received 119.5 million returns, compared with 117.3 million received in the same timeframe last year. Refunds this year add up to $220 billion, compared with $215 billion last year, agency data shows.
The Associated Press contributed to this report. This story was reported from Washington, D.C.