There's a new, free option starting today to help you file your taxes. It's called Direct File.
Alejandra Castro, spokesperson with the IRS says this is the first service that allows taxpayers to directly file with the IRS while allowing them to file accurately and get the tax benefits they are entitled to within the pilot scope. This is another option for the IRS to provide derives and meet taxpayers where they are.
Independent tax experts add that taxpayers using Direct File answer questions like the one in popular tax software like TurboTax or H&R Block, and the software uses the provided answers to complete tax returns that can be submitted electronically on the IRS website. For now, Direct File is only being offered in Florida, Arizona, California, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.
It'll be available in Spanish later this month.
Primarily, Direct File is an option only for taxpayers who use the standard deduction and both the student loan interest and educator expenses deductions, ...it is not for those who itemize deductions.
In addition to the deduction restrictions, Direct File supports only three tax credits:
- Child Tax Credit (and Additional Child Tax Credit)
- Earned Income Tax Credit
- Credit for Other Dependents
If you want to take tax credits for items such as energy efficiency, electric vehicles, adopted children, retirement savings, health care premiums or child care costs, you'll need to use another tax filing option.