The IRS is shaking things up with a new free online tax filing tool called Direct File. Unlike the clunky experience of the past, Direct File is designed with user experience in mind and is built for scalability.
Here's the breakdown:
- What it is: Direct File is a free government-run tax filing tool designed to be simple and user-friendly.
- Who it's for: In its first year, it was limited to taxpayers in 12 states with uncomplicated tax situations. It will expand to 24 states next year and aims to be nationwide in a couple of years.
- How it works: The tool guides users through the filing process and avoids overwhelming them with unnecessary questions. It also automates tasks like filling in previous year's adjusted gross income, reducing errors.
- The benefits: Direct File is completely free, eliminates the need for third-party tax preparers, and boasts a user-friendly interface. In its pilot year, it processed over 140,000 returns with a 90% satisfaction rate.
- The future: The IRS is committed to expanding Direct File and is working on integrating it with state tax filing systems. However, its future may be uncertain depending on the results of the upcoming elections.
This innovative approach to tax filing could potentially change how Americans handle Tax Day forever.