IRS Free Tax Filing Tool – Launch Date, Eligible State and Who Qualifies for it?

The IRS’s “Direct File,” a free tax filing tool, will be available to eligible filers in 12 states starting March 12, announced the agency on Friday, over a month ahead of the April 15 tax filing deadline.

IRS Free Tax Filing Tool

The IRS announced on Friday that its free tax filing tool, “Direct File,” will be accessible to eligible filers in 12 states from March 12, well in advance of the April 15 tax filing deadline.

This initiative aims to provide taxpayers with a cost-effective and efficient way to prepare and file their federal income taxes online at no cost. 

The Free File program sets eligibility based on adjusted gross income (AGI), with an income threshold of $79,000 or less for the 2023 tax year. 

Who qualifies for an IRS Free File?

Income Requirement:

  • The main eligibility criterion for free federal tax filing through IRS Free File partners is your Adjusted Gross Income (AGI) for the tax year you’re filing.
  • For the 2023 tax year (filed in 2024), you generally need an AGI of $79,000 or less to qualify.

Partner Requirements:

  • While income is a major factor, remember that individual IRS Free File partner companies might have additional eligibility requirements. These can vary and might include:
    • State Residency: Some partners might restrict their free filing offer to residents of specific states.
    • Types of Income: Certain partners might not support complex tax situations involving specific income types like business income or foreign income.
    • Military Service Status: A few partners might offer specialised features for veterans or active military personnel.

IRS Free Tax Filing Tool

Eligible states for IRS Free File

The IRS Free File program is available in many states, but the specific list of states varies each year. For the 2024 tax filing season, the IRS Free File program is available in the following states:

  • Arkansas
  • Arizona
  • District of Columbia
  • Georgia
  • Idaho
  • Indiana
  • Iowa
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Mexico
  • North Carolina
  • North Dakota
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming

How to file tax using the IRS Free File?

The IRS Free File program streamlines tax filing for eligible individuals by connecting them with free tax preparation software from partner companies.

Finding a Partner:

  • Browse All Trusted Partners: This page on the IRS website lists all participating partners. Here, you can compare offerings and eligibility requirements to find a general fit.
  • Find Your Trusted Partner(s): This interactive tool helps you narrow down the options. Simply answer a few questions about your income, filing status, and state of residence. 

Consider Partner Specifics

While income is a major factor, individual partners might have additional requirements:

  • State Residency: Some partners might restrict free filing to specific states.
  • Types of Income: Complex tax situations involving business income or foreign income could be excluded by some partners.
  • Military Service Status: Veterans or active military might benefit from specialised features offered by certain partners.

Partner Selection and Filing:

  • Once you have a shortlist of partners, delve deeper into their specific offerings and eligibility requirements on their individual websites.
  • Choose the partner that best suits your needs based on features, user-friendliness, and state filing fees (if applicable).
  • You’ll create an account and file your return directly on the chosen partner’s platform, not on the IRS website.

Benefits of Using IRS Free File

Key benefits of using IRS Free File:

Financial Savings:

  • Free Federal Filing: The primary advantage is the ability to file your federal tax return electronically for free if you meet the income eligibility requirements. 
  • This can save you a significant amount of money compared to using a paid tax preparation service.

Convenience and Efficiency:

  • Electronic Filing: Electronically filing your taxes through IRS Free File is faster and more secure than filing paper returns. 
  • Guided Assistance: Most partner platforms offer user-friendly software that guides you through the tax filing process step-by-step. 

Accuracy and Security:

  • Reduced Errors: Partner software often integrates with the IRS database, minimising errors in data entry and helping you claim all the deductions and credits you’re eligible for.
  • Data Protection: Reputable IRS Free File partners employ robust security measures to safeguard your sensitive tax information.
  • Multiple Partner Options: The program offers a variety of partner companies, allowing you to choose one that best suits your comfort level and tax situation. 

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