The IRS is keeping its free tax filing service for the foreseeable future

Image Credit: Shutterstock (Image credit: Shutterstock)

In a very welcome move for taxpayers in the US, the Internal Revenue Service (IRS) has announced its Direct File option will become a permanent feature for filing federal tax returns, beginning with the 2025 tax season.

The decision to extend the program follows a successful short pilot period and extensive feedback – the tool first became available to eligible taxpayers in March 2024.

Looking ahead, the IRS has committed to expanding Direct File to include more taxpayers and tax situations.

IRS Direct File is good to go

The IRS says more than 140,000 taxpayers used the service during the pilot period. Feedback from users, state officials and tax professionals highlighted the system’s ease of use, trustworthiness and its benefit of being a no-cost option. More than 15,000 (or around 11%) participated in the feedback survey, with nine in 10 stating that their experience had been ‘excellent’ or ‘above average.’

The agency plans to partner with all states by 2025 as part of an expansion that will make tax filing free for more American citizens – the pilot program was limited to only 12 states.

Despite the service’s key strength in offering free filing to eligible taxpayers, the IRS responded to concerns expressed by existing service providers, such as TurboTax:

“It is not meant to replace other important options by tax professionals or commercial software providers, who are critical partners with the IRS in delivering a successful tax system for the nation.”

Further reaffirming Direct File’s benefits, Treasury Department figures estimate that users saved $5.6 million in tax preparation fees this filing season – an average of around $40 per person.

IRS Commissioner Danny Werfel commented: “We will focus, first and foremost, on continuing to get it right.” As part of the wider rollout, the agency will emphasize accuracy and ease of use.

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