Last Updated on: 20th January 2024, 07:18 am
On October 17, 2023, the Internal Revenue Service (IRS) introduced a groundbreaking $11 billion tax program set to undergo testing in 13 states during the 2024 filing season. The 2024 Direct Submit Trial, aimed at residents of these states, enables taxpayers to electronically submit their federal tax returns directly to the IRS, aligning with the IRS Strategic Operating Plan’s objective to provide multiple communication channels for taxpayers.
IRS Free Tax Filing 2024:
The IRS Free Tax Filing 2024 initiative, spearheaded by Commissioner Danny Werfel, marks a significant advancement. The trial, focused on state integration, involves collaboration with participating states to gather crucial data on the Direct File program’s future trajectory.
Eligibility for the 2024 Direct Submit Trial is limited to residents of the 13 states, offering taxpayers with relatively straightforward returns the option to submit their forms electronically. Notably, the pilot covers key tax credits such as the Earned Income Tax Credit and the Child Tax Credit.
Significance of IRS Free Tax Filing 2024:
The introduction of free online tax filing through Direct File could reshape how Americans approach their tax returns, potentially impacting the multi-billion dollar tax preparation industry. The trial encompasses state taxes in Arizona, California, Massachusetts, and New York, with participants also hailing from states without income taxes.
The IRS aims to assess and address challenges based on pilot data, covering aspects like W-2 earnings, social security benefits, unemployment benefits, and interest up to $1,500.
How IRS Free Tax Filing 2024 Works:
Direct File, accessible in both English and Spanish, boasts mobile-friendly and interview-based features. Initially limited to a select group of eligible taxpayers, the program will later expand. While participants in the 13 qualifying states have access to other tax preparation software, the IRS anticipates resolving complexities for subsequent iterations of the program.
Eligibility for IRS Direct File in 2024:
Laurel Blatchford, Chief Implementation Officer for the Inflation Reduction Act at the U.S. Department of the Treasury, emphasizes a phased launch to ensure a positive experience for taxpayers. The pilot targets individual taxpayers with relatively simple returns, covering Form W-2 wages, Social Security benefits, unemployment compensation, and interest payments up to $1,500.
The government plans to include standard deductions, student loan interest deductions, educator cost tax breaks, earned income tax credits, child tax credits, and credits for additional dependents.
IRS Overhaul:
In light of years of declining funds and reduced workforce, the IRS looks to undergo significant changes. The Inflation Reduction Act, a 2022 government spending bill, provides long-term financing for the IRS to enhance taxpayer services, digitize paper tax returns by 2025, and address refund processing delays. While questions about increased audits arise, the Biden administration asserts that individuals earning less than $400,000 annually will not face audits due to additional funding.
