IRS promotes new program to file your taxes for free
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(California News Service) This year, people can file simple tax forms for free and save time to boot, thanks to a new pilot project from the Internal Revenue Service called IRS Direct File.
Like residents of other states, Californians spend an average of 9 hours and $150 a year to file their taxes.
Adam Ruben, vice president of campaigns and political strategy for the nonprofit advocacy organization the Economic Security Project, said now they can just go to Directfile.IRS.gov.
"It's an interview-based questionnaire," Ruben explained. "It's something that people can use on their phones on their computers available in English and Spanish that asks people questions and pretty much plain language, and you fill in the answers. And it fills in the tax form for you."
The program then funnels users into the CalFile site to do their own state taxes. IRS Direct File is being piloted in 12 states but if it were to expand nationwide and be available to all taxpayers, Ruben estimated within five years it would save Americans $8 billion in tax preparation fees and another $3 billion worth of time annually.
Teri Olle, director of Economic Security California, said the software is especially helpful to the millions of Californians who make too little money to be required to file taxes because it connects them to things like the Earned Income Tax Credit and the Child Tax Credit.
"Those folks who don't file are often disproportionately Black, Latino, Indigenous, headed by single parents," Olle outlined. "Those are the households that often stand to benefit thousands of dollars in tax credits."
Private tax preparation companies like TurboTax and H&R Block fought the idea for years but the Biden Administration pressed on, using funds from the Inflation Reduction Act. Advocates are hoping in future years the program will be able to pre-fill the return with financial data from W2 forms.