IRS Direct File Expansion to Benefit 30 Million Taxpayers

The U.S. Treasury announced that over 30 million taxpayers across 24 states will have access to free federal tax filing next year through the expanded Direct File system. This move is part of the Biden administration's effort to reduce consumer expenses, potentially saving millions in tax preparation fees.

In a significant move to alleviate financial strain on American taxpayers, the U.S. Treasury has unveiled that more than 30 million taxpayers in 24 states will be eligible to file their federal taxes free of charge next year. This will be facilitated by an expanded Direct File system, part of the IRS's online offerings.

The expansion aligns with the Biden administration's broader goal of lowering living costs, a cornerstone of Vice President Kamala Harris' presidential campaign. By leveraging the Direct File system, taxpayers could collectively save tens of millions in preparation fees, addressing a key economic concern ahead of the 2025 tax filing season.

Currently, the pilot program has enabled over 140,000 taxpayers in 12 participating states to file simple returns. The upcoming expansion will accommodate additional income types and deductions, though those itemizing with mortgage interest remain ineligible. The initiative, partly funded through the 2022 Inflation Reduction Act, highlights the administration's commitment to cost reduction, as detailed by Treasury Secretary Janet Yellen.

(With inputs from agencies.)