KEY TAKEAWAYS The IRS Direct File program was eliminated for the 2026 tax filing season. However, several free tax preparation software options are available for those with 2025 income of $89,000 or less and for active military members. If you're looking to file your 2025 tax returns online for free, you may have some options. This tax filing season, IRS Direct File—the free tax-filing software that allowed taxpayers in 25 states to file directly online with the IRS regardless of income—was disco ...

Tax season is upon us, and with that comes the all-too-frequent feelings of stress, anxiety and being overwhelmed by all the procedures and paperwork. Check Out: Here’s the Minimum Income You Need To File Taxes in 2026 — by Age Learn More: 5 Low-Effort Ways To Make Passive Income (You Can Start This Week) But fear not. GOBankingRates consulted ChatGPT about how to prepare for tax season with a 30-day game plan, and it came through with a comprehensive walkthrough. Also see seven signs you are prepared f ...

Core Insights - The tax season is currently active, with a filing deadline of April 15, and taxpayers are encouraged to organize their documents early to avoid last-minute stress [1] Group 1: Tax Changes and Deductions - New deductions include no tax on qualified tips, no tax on overtime, deductions for car loan interest, and additional deductions for individuals aged 65 or older [2][5] - The average tax refund last year was $3,167, with projections indicating it could increase by $1,000 this year due to tax law changes [2] - The standard deduction has increased to $15,750 for single taxpayers, $31,500 for married couples filing jointly, and $23,625 for heads of households [5] - The SALT deduction cap has increased from $10,000 to $40,000, benefiting taxpayers in high state income tax areas [5][7] Group 2: Tax Preparation Resources - Taxpayers can utilize free resources such as IRS Free File for guided tax preparation for those earning $89,000 or less [11] - The IRS offers two programs for free tax help: Volunteer Income Tax Assistance (VITA) for low-income individuals and Tax Counseling for the Elderly (TCE) for seniors [12] Group 3: Common Mistakes and Best Practices - Taxpayers are advised to double-check their Social Security information and ensure all income is reported accurately to avoid audits [13][15] - It is recommended to keep copies of tax returns for five to seven years for potential audits [22] - Taxpayers should be cautious of tax scams, especially during tax season, and verify the legitimacy of tax preparers [20]

Core Insights - The tax filing options for 2026 have decreased from five to four due to the cancellation of the Direct File program by the Trump administration, which was favored by 90% of its users in 2024 [2] Group 1: Free Filing Options - IRS Free File allows eligible taxpayers to file their federal and state tax returns for free, with an adjusted gross income limit of $89,000 [4][5] - The Free File program provides guided support through online tax questions, ensuring accurate and error-free returns [6] - The IRS Volunteer Income Tax Assistance (VITA) program offers free in-person and online tax preparation assistance for individuals earning $67,000 or less, as well as for disabled individuals and those with limited English proficiency [8][9]

Core Insights - The IRS Direct File program, which provided free tax software to taxpayers in 25 states, will not be available for the upcoming filing season due to its low utilization and cost concerns [1][2][7] - The program cost approximately $41 million to operate during the 2024 tax year, with only 0.2% of tax returns filed using it [2] - Despite low usage, a survey indicated that nearly three-fourths of tax filers were interested in using Direct File, and 94% of users rated their experience positively [3] Program Suspension - The Direct File program has been suspended as part of a broader initiative to explore more effective alternatives, with Treasury Secretary Scott Bessent stating that the private sector could provide better solutions [1][7] - An IRS task force was created to assess the costs associated with Direct File and potential replacements, following directives from the "One Big, Beautiful Bill" [1] Taxpayer Options - For the 2026 filing season, other free federal tax preparation programs will still be available, including the IRS Free File program for taxpayers with an adjusted gross income of $84,000 or less [5][8] - Additional options include the Volunteer Income Tax Assistance program for individuals earning $67,000 or less, and Tax Counseling for the Elderly for those aged 60 and above [8]

Core Insights - Direct File, a free IRS tax-filing tool, has been shut down less than two years after its launch due to shifting priorities and low participation rates [1][4][6] - The program was initially seen as a consumer win, allowing taxpayers to file federal taxes without commercial software, but ultimately faced high costs and underutilization [1][5][6] Summary by Sections Overview of Direct File - Direct File was created during the Biden administration as a no-cost filing platform, allowing eligible taxpayers to file directly through an IRS-operated online portal [2][17] - It operated alongside IRS Free File, which provides free access to tax-prep software for individuals with adjusted gross incomes of $84,000 or less [3][11] Reasons for Elimination - The IRS decided to terminate Direct File following a Treasury report that highlighted high costs and low participation, with only 140,803 users in its first year compared to initial estimates of 5 to 25 million [4][6] - The cost of the pilot program was initially reported at $24.6 million but was later revised to $31.8 million due to uncounted expenses, resulting in a processing cost of approximately $225 per return, significantly higher than projected [5][7] Political Reactions - Lawmakers expressed mixed reactions to the program's termination, with Republican lawmakers supporting the decision as a cost-saving measure, while Democrats criticized it as shortsighted [8][9] Future of Tax Filing Options - With Direct File discontinued, taxpayers can still utilize IRS Free File and other free options, which cater to different income levels and tax situations [10][11] - The IRS is focusing on strengthening Free File and similar partnerships rather than developing a new government-built tax tool in the near future [18]

Core Points - The Trump administration has ended the IRS Direct File program, which was designed to simplify tax filing for Americans and save costs [1][4] - Critics argue that Direct File was costly to develop and had low participation rates, with only 296,531 returns filed in its second year, representing less than 0.5% of total returns [4][5] - Former Treasury Secretary Janet Yellen estimated that the average American taxpayer spent $270 and 13 hours filing their tax return [2] Group 1: Direct File Program Overview - Direct File was launched as a pilot in 2023 for 12 states and expanded to 25 states in 2024 [1] - The program cost taxpayers at least $41 million, or approximately $138 per return, which critics claim understates the true costs [5] - Participation in Direct File was the lowest among free tax preparation programs, with just under 141,000 returns filed in the pilot year [4] Group 2: Alternatives to Direct File - Americans will need to use paper returns or other software options, with low-cost software providers available [7] - Free options include IRS Free File, which offers free tax preparation software for eligible taxpayers with an AGI of $84,000 or less [8] - Volunteer Income Tax Assistance and AARP Foundation's Tax-Aide provide free tax help, assisting nearly 1.7 million taxpayers in 2024 [8]

Core Points - The federal income tax filing deadline for 2024 is April 15, 2025, which falls on a Tuesday for most taxpayers [2] - Most state income tax deadlines align with the federal deadline, but some states, like Louisiana and Hawaii, have different deadlines [3] Filing Options - Taxpayers can file their returns quickly by gathering necessary paperwork, including W-2s and Form 1099s [4] - The IRS offers free filing options, including the IRS Direct File pilot program for eligible taxpayers in 25 states and IRS Free File for those with an annual taxable income of $84,000 or less [5][6] - Tax software can expedite the filing process, though many options are not free [7] - Government assistance programs like VITA and TCE provide support for low- and moderate-income taxpayers and the elderly [8] Professional Assistance - Consulting a tax professional can help with filing and tax preparation, especially as the deadline approaches [10] Important Considerations - Taxpayers should be aware of eligible tax credits and deductions, the choice between standard deduction and itemizing, and the correct filing status [11][12] - If unable to file by the deadline, taxpayers can request a six-month extension, but this does not extend the payment deadline [13][14] Payment Options - Various payment methods are available for tax bills, including electronic payments through the IRS website and traditional checks [16][18] - The IRS offers repayment plans for those unable to pay their tax bill in full by the deadline [18][27] Penalties for Non-Compliance - Failing to file taxes on time incurs penalties, including a failure to file penalty of 5% per month on unpaid taxes, up to 25%, and a failure to pay penalty of 0.5% per month [20][26] Tax Refund Management - Tax refunds can be expected via direct deposit a few weeks after filing, and financial planning for the refund is advisable [21][22]

Core Points - A tax extension allows taxpayers to file their tax returns later without incurring a failure-to-file penalty, but it does not extend the payment deadline for any taxes owed [2][3][18] - The deadline to file for a tax extension for the 2025 tax year is April 15, 2026, with an extended filing deadline of October 15, 2026 [5] - Certain taxpayers, such as U.S. citizens abroad and military members, may automatically receive additional time to file without penalties [6] Tax Extension Process - Taxpayers must first determine if they owe money or are due a refund before filing for an extension [8] - Filing for a federal tax extension can be done electronically using IRS Form 4868 or by mailing a paper form [10][11] - If a state extension is needed, it must be filed separately, as it does not automatically extend the payment deadline for state taxes [13] Payment Plans - Taxpayers who owe money should pay as much as possible by the deadline to avoid interest and penalties, with options for long-term and short-term repayment plans available for balances owed [14][19] - For balances of $50,000 or less, taxpayers can request monthly installment payments, while those with balances between $50,000 and $100,000 can opt for a short-term plan of 180 days or less [14] FAQs - There is no penalty for requesting a tax extension, but a failure-to-pay penalty applies if taxes are not paid on time, which can be up to 25% of the unpaid balance [15][16] - Taxpayers can file for a tax extension online through various platforms, including IRS Free File and tax software [17] - A tax extension does not provide additional time to pay taxes owed, only to file the tax return [18]

Core Insights - The IRS Direct File option for free tax filing will no longer be available starting January 2026, but several alternatives for free tax filing remain available [1] Group 1: Free Tax Filing Options - IRS Free File is available for taxpayers with an adjusted gross income (AGI) of $84,000 or less, providing access to free tax preparation software through the Free File Alliance [3][17] - Free versions of popular tax software like H&R Block, TurboTax, TaxSlayer, and TaxAct are available, typically best for straightforward tax situations [5] - Volunteer Income Tax Assistance (VITA) offers free tax preparation for low- and moderate-income taxpayers, with eligibility requirements including an income of $67,000 or less [6][7] - Tax Counseling for the Elderly (TCE) provides free tax preparation services to older taxpayers, primarily those aged 60 and above, focusing on simple tax returns [9][10] - MilTax offers free tax filing for military members and veterans, with no income limits and specialized support for military-related tax issues [10][11] Group 2: Limitations and Additional Information - The IRS previously offered free, fillable forms online, but these are no longer available for electronic filing [12] - Some free filing options may involve additional fees for state tax returns [12] - Taxpayers must still file a federal tax return even if they have paid estimated or self-employment taxes quarterly [14]