As the April 15 federal tax deadline approaches, the IRS has made an “important update” to its Direct File program, a free tax filing service. The pilot program, which has been fully operational in 12 states since March 12, now includes a new feature that allows users to import crucial details needed for verifying their returns before filing. By inputting the previous year’s adjusted gross income or the prior year’s temporary pin, users can validate their returns before submitting them. This new feature is designed to streamline the filing process and minimize common errors that have plagued Direct File users in the past.
One of the main issues that Direct File users have faced is the manual input of verification details, such as adjusted gross income or temporary pin. However, with the latest update, users can now import these details directly from their IRS account, which has robust identity verification measures in place. This update is expected to simplify the filing process even further and make it more user-friendly, according to Bridget Roberts, who leads Direct File at the IRS.
Direct File will remain open for rejected returns until April 20, giving users more time to rectify any errors and resubmit their returns. This extension is crucial for users who may have encountered issues with their initial filing and need more time to make corrections. The IRS is committed to ensuring that all taxpayers have the opportunity to successfully file their returns through Direct File.
Direct File eligibility is limited to individuals with simple tax returns for the current filing season. This includes those who only have Form W-2 wages, Social Security retirement income, unemployment earnings, and interest of $1,500 or less. Filers with more complex tax situations, such as gig economy workers or self-employed individuals, are not eligible for Direct File this season. To qualify for Direct File, filers must claim the standard deduction, which is $13,850 for single filers and $27,700 for married couples filing jointly in 2023. Additionally, Direct File only accepts a few credits, such as the earned income tax credit, child tax credit, and credit for other dependents, as well as deductions for student loan interest and educator expenses.
The Treasury Department estimates that one-third of federal income tax returns could potentially use Direct File this season, with approximately 19 million taxpayers currently eligible for the program. The agency hopes to receive 100,000 filings through Direct File this season, representing about 0.5% of eligible filers. While roughly 60,000 taxpayers have already used Direct File, the agency anticipates an increase in volume as the tax deadline approaches. The Direct File program is designed to provide a convenient and efficient way for eligible taxpayers to file their returns securely and accurately.
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