New IRS tax prep pilot available; Is it an option for you?

The IRS’ new Direct File pilot program is fully open to Texans who have not filed their federal income tax return yet.

In January, the IRS began testing the new platform by invite - allowing certain taxpayers in 12 states to prepare and file their returns for free directly through the IRS. The IRS announced the pilot is now fully open to any Texans who want to check it out.

Direct File is different from the existing IRS Free File program which is open to taxpayers making less than $79,000 a year.

Keep reading to find out if Direct File is an option for you this tax season.

PILOT PROGRAM OPEN TO TEXANS

The IRS says its Direct File platform is now open 24/7 to filers in 12 states, including Texas. The IRS says Direct File walks people through a checklist to prepare their return on a computer, tablet or smartphone. Then, file directly with the IRS at no charge. There’s no software to buy or download.

“It will do the math for you. It will ask you questions about your income. It's going to go out there and definitely maximize your refund for you,” said Clay Sanford, IRS spokesperson.

The IRS says Direct File is limited in the types of income, credits and deductions it will accept.

It will only work for Texans with simple returns and certain types of income, like people reporting income from a W-2, SSA-1099 Social Security and railroad retirement, 1099-G unemployment compensation and 1099- INT interest income of $1,500 or less. The IRS says Direct File is not set up to handle income reported from gig work or self-employment.

To use Direct File, you’d have to claim the standard deduction. The IRS says 9 out of 10 people already take the standard deduction. If you itemize deductions, Direct File wouldn’t work for you. The IRS says Direct File accepts deductions for student loan interest and educator expenses.

If you qualify for the Earned Income Tax Credit, Child Tax Credit and Credit for Other Dependents, Direct File will apply them. If you take other tax breaks, like the Child and Dependent Care Credit, you can’t use Direct File.

There are also income limits for Direct File. The IRS says if your tax situation doesn’t work with Direct File, it will let you know so you can find another way to prepare your return. The Direct File website has this eligibility tool.

“It's another free option, like Free File, out there. If you qualify for it, it's a way to get your taxes done for free this year,” said Sanford.

To use Direct File, taxpayers would have to create an IRS account with the ID.me tool.

OTHER FREE OPTIONS FOR TAXPAYERS

There are other options to file your federal income tax return for free.

The IRS offers Free File for people with annual incomes of $79,000 or less. Filers go to this site where they can pick a third-party guided software program to prepare and file their federal income tax returns at no charge.

Some taxpayers may qualify for free, in-person tax preparation with a volunteer.

The Volunteer Income Tax Assistance or VITA program is for people who make $64,000 or less, people with disabilities, or taxpayers who speak limited English. The Tax Counseling for the Elderly or TCE program offers free tax help to people 60 and older. If you’re filing a joint return, as long as one spouse meets the 60 or older threshold, you’re eligible. You can start your search for sites here.

You can also call 800-906-9887 for a list of VITA site options. For help finding a TCE site, you can call the AARP Foundation's Tax Aide program at 888-227-7669.

Once you find a site in your area, call ahead. Many require an appointment.

For members of the military and some veterans, you can check out MilTax for free tax return help with no income limit.

IRS offers free fillable forms with no income limit. Tax filers who are comfortable handling their own returns and doing some math on their own can start here.

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