Can you feel that energy in the air, the crackle of excitement among American accountants? Yes, today marks the official start of the tax season. Although the IRS code has not undergone any major changes that could potentially affect your return year, there are at least some developments that are worth noting.
Depending on the state you reside in, you may be newly eligible to use the IRS’s Direct File program, which allows you to file a return directly to Uncle Sam for free, and has some great upgrades this year that should make it useful to the larger community. Number of files. If you’re a gig worker or small business owner who gets paid through apps like PayPal or Venmo, you’ll likely be covered by some new reporting rules aimed at cracking down on low-level tax fraud.
Read on for more details.
Read more: How to file a 2024 tax return for free
The live file is expanded
After a well-reviewed pilot effort last year, the I.R.S Expands Its direct file program has expanded to 13 new states, bringing the total to 25. Portal It’s still designed for relatively simple returns but now comes with some new functionality you’d typically find in private tax preparation software, such as the ability to automatically import W-2 information directly from the IRS. It can now also handle a greater variety of tax circumstances, including returns claiming the following credits:
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Earned Income Tax Credit
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Child Tax Credit and Child and Dependent Care Credit
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The Affordable Care Act premium tax credit
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Credit for the elderly and disabled
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Credits for contributions to retirement savings
The IRS believes those additions Should make 30.3 million Americans are eligible to use Direct File in this round. However, keep in mind that the program still has strict income limits:
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Solo bloggers are only eligible if they earn less than $200,000 a year, or $168,000 if they have more than one job.
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Couples filing jointly must earn $250,000 or less.
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Couples filing separately must each have wages of less than $125,000.
Taxpayers also cannot use Direct File if they have certain types of income, such as capital gains or rental dividends. So, if you are a day trader or owner, go for it.
Direct File got strong reviews last year, with Americans using it to file just over 140,000 returns. In 15,000 people Customer service surveyabout 90% of users rated their experience as “excellent” or “above average,” and more than three-quarters said the software was easy to use compared to the method they relied on to file taxes the previous year. The Government Accountability Office also considered the pilot success. However, customer service will likely take a hit this year thanks to the Trump administration’s federal hiring freeze, which could hurt the IRS’s ability to properly hire employees.
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