If your tax situation is simple enough, where you feel comfortable filling your tax return on your own, you might not need to buy a tax software, like TurboTax or Tax Act every year.
That is because starting with 2025, so starting with the next year tax season you will be able to file your tax return directly with the IRS.
This year, in the 2024 tax season, the IRS had a pilot program called Direct File which allowed people to file their returns directly with the IRS. This program was available only in 12 states and only for 5 weeks. The program went so well that the IRS decided to make Direct File permanent starting with the 2025 tax season while making it available to all states, with plans to expand to more complex returns.
As of now the returns supported by DirectFile are the ones with the following types of income and deductions:
Income: wages, Social Security income, unemployment compensation and interest income of $1,500 or less.
Credits: earned income tax credit, child tax credit and credit for other dependents.
Deductions: standard deduction, student loan interest and educator expenses.
So for now you cannot use the IRS software if you itemize deductions.
We will keep you posted as the IRS expends the type of returns that can be filed through their program.
You can check our YouTube channel for more subjects that you might find useful. If you are in need of a good CPA firm contact us!
This material is for informational purposes only. It does not constitute tax, legal or accounting advice.