May 30 (UPI) — The U.S. Department of the Treasury and Internal Revenue Service on Thursday announced Direct File will be a permanent, free tax filing option starting in 2025.
During a pilot program, 140,000 taxpayers used Direct File to claim over $90 million in refunds and save around $5.6 million in filing costs, according to a release.
The Treasury Department attributed Direct File to resources made available through the Inflation Reduction Act.
“President Biden is committed to saving Americans time and money and ensuring families receive the tax benefits they’re owed. Providing a free tool to all Americans who want the option to file directly with the IRS is key to achieving those goals,” Treasury Secretary Janet Yellen said in a statement.
The Treasury Department initiated a Direct File pilot during the 2024 filing season. The pilot was intended for the Treasury to study the potential for the IRS to run a system that allows taxpayers to file their taxes for free, directly with the IRS.
According to the IRS Taxpayer Burden Survey, Americans on average spend $270 and 13 hours filing their taxes.
“To truly make the tax filing process easier, we are listening to taxpayers and working to deliver options that work for them,” IRS Commissioner Danny Werfel said in a memo.
“Taxpayers across the nation have told us they want no-cost filing options. Direct File — which provides taxpayers a new option to file online, for free, directly with the IRS — is the answer to that call.”
The Treasury Department in April reported that an additional $80 billion in Inflation Reduction Act funding helped the IRS beat service goals for the 2024 season.
With the financial boost, the IRS reduced call wait times from 30 minutes to three minutes, and walk-ins at IRS assistance centers jumped by 170,000.
Werfel at the time said the funding would lead to a “marked improvement in IRS operations,” and that employees were “working hard to make sure that new funding is used to help taxpayers by making the process of preparing and filing taxes easier.”