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The Impact of Direct File—by the Numbers (economicsecurityproject.org)

submitted 1 year ago by [email protected] to c/[email protected]

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Direct File is the Internal Revenue Service’s revolutionary new project to provide free, simplified, public online tax filing for the first time in U.S. history. [...] This report is the first to estimate the total financial benefits of the Direct File program for American taxpayers. It finds that, at maturity in five years, Direct File would save the average user $160 in filing fees and hours of their time each year, which saves Americans a total of $11 billion annually between filing fees and time costs. By breaking down barriers to filing, Direct File would also deliver up to $12 billion each year in additional tax credits to low-income families currently missing out.

These savings represent an enormous return on investment given the small net cost of the program. For every dollar invested in the program, Direct File delivers $106 in benefits to American taxpayers, between savings on tax preparation fees and access to untapped tax credits. Few programs deliver this kind of bargain.

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[–] [email protected] 5 points 1 year ago (2 children)

I haven't seen a lot of details about this program. What I'm most interested in is which forms it will support. One of my frustrations is that a lot of tax prep services advertise "free" efile, but almost all of them only allow it for the 1040EZ which is very narrow, and most adults will have to file at least a 1040 and probably will need additional forms as well.

[–] [email protected] 5 points 1 year ago (1 children)

The 1040EZ has been discontinued for several years now, but I'm with you that most free file tax software needs a simple return. Unfortunately, Direct File is one of those at the moment, though I hope it expands soon to at least slightly more complex returns that some other free tools (like FreeTaxUSA) can handle.

[–] [email protected] 3 points 1 year ago

Ah, thanks for that. I've not been in a position to consider filing the EZ in years so I didn't realized it had been phased out.