Beware, taxpayers! The IRS will start to accept 2024 tax year returns soon in late January 2025, most likely on January 27 or 29, although the exact date hasn’t been announced yet.
Filing your taxes early not only ensures you follow the rules but also speeds up the arrival of any refund you’re entitled to. The IRS recommends filing electronically and using direct deposit for quicker and smoother processing. Online tax platforms or professional preparers can make the process easier, helping you handle the often complicated tax system.
Taxpayers will have almost three months to file their returns, with the deadline set for April 15. That said, it’s better not to wait until the last minute—filing earlier means the IRS can process your refund sooner, if you’re due one.
The IRS is broadening its free program that lets people file their taxes directly with the agency.
Direct File Program Overview
The Direct File program, which enables taxpayers to prepare and submit their returns without needing commercial tax software, will be available to over 30 million individuals across 24 states during the 2025 tax season.
This program was first tested as a pilot in 12 states during the 2024 filing season. IRS Commissioner Daniel Werfel has announced that the program will become permanent, with plans to increase access for more taxpayers.
“We’re making major expansions to Direct File, which will allow millions more people to use the service in 2025,” Werfel said during a call with reporters on Thursday. He also mentioned that additional states might opt to join the program for the 2025 tax season.
States where the Program is Available
The 2024 pilot program was available in select states and catered to individuals with straightforward W-2 filings, allowing them to submit their returns directly to the IRS. According to the IRS, participants claimed over $90 million in refunds through the program.
States where the program was originally available in 2024:
- California
- New York
- Arizona
- Florida
- New Hampshire
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
- Massachusetts
States to be added in 2025:
- Alaska
- Connecticut
- Idaho
- Kansas
- Maine
- Maryland
- New Jersey
- New Mexico
- North Carolina
- Oregon
- Pennsylvania
- Wisconsin
New Eligibility Guidelines and Benefits
New eligibility guidelines will expand the program to include taxpayers with 1099 income, as well as those claiming credits like the Child and Dependent Care Credit, the Retirement Savings Contributions Credit, and deductions for Health Savings Accounts, among others.
“Other countries have been offering their citizens this kind of option for years,” Treasury Deputy Secretary Wally Adeyemo said during the call with reporters. Several members of the Organization for Economic Cooperation and Development, such as Germany and Japan, use similar systems with pre-filled tax forms.
The idea of direct filing isn’t popular with commercial tax preparation software companies, which have made billions by charging people to use their platforms.
A new report from the IRS inspector general this week highlights that the agency hasn’t maintained adequate safeguards to protect data within the IRS Free File Alliance. This alliance is a long-standing partnership between the IRS and some commercial tax prep companies to offer free services to low- and middle-income taxpayers.
The Free File Alliance operates independently from the Direct File program.
The IRS was directed to explore the creation of a “direct file” system as part of the funding it received through the Inflation Reduction Act, signed into law by President Joe Biden in 2022. The law allocated $15 million and set a nine-month deadline for the IRS to deliver a report outlining how such a program could be implemented.
Filing taxes might not be anyone’s idea of a good time, but at least the IRS is working to make it a little less painful. After all, a system that’s easier to use means fewer headaches—and maybe fewer calls to your accountant at 3 a.m. And hey, if Germany and Japan can handle pre-filled tax forms, maybe we’re finally catching up… one tax season at a time!