An Internal Revenue Service pilot could eventually offer U.S. citizens a free, direct-file alternative to commercial options like TurboTax and H&R Block. Yesterday, the agency announced that 13 states will join its pilot program for the 2024 filing season, four of which will also be able to integrate their state taxes into the pilot.
Since 2001, a partnership between companies like Intuit, maker of TurboTax, and the IRS called the Free Files Alliance has provided consumers with a free alternative to paying for tax preparation. However, it turned out that when you try to get companies to offer you an alternative to giving you money, they will do it to you. do everything you can to hide that option. When the IRS updated the agreement to prohibit companies from doing that and give themselves permission to create their own free filing option, both H&R Block and Intuit is gone.
According to the IRS, these are the states joining the pilot:
The pilot does not guarantee a national launch of the program. Danny Werfel, who heads the IRS, says this will test the government’s ability to do so, adding that the Internal Revenue Service will work closely with participating states to gather the information it needs to see if the program works.
The IRS says its scope could change, but the pilot is starting small. Only some people can participate, depending on their income, tax credits and deductions. For example, if you file a W-2 and you have basic deductions like student loan interest or the standard deduction (the default that everyone gets unless they need to deduct more), you can file directly. However, if you’re an independent contractor, it seems like you may be stuck with your usual options.