Americans can begin filing their income tax returns with the Internal Revenue Service on Monday, January 29, the federal tax collector announced Monday.
Monday, April 15, is the deadline to pay any taxes due, and it is also the deadline to file a return or get an extension to October 15. Taxpayers in Maine and Massachusetts have a deadline of April 17 due to National Day. And Liberation Day in those states.
By April 15, the IRS expects to receive 128.7 million income tax returns.
This year will be another closely watched tax filing season.
Millions of Americans are seeking the largest possible tax refund — or the smallest possible tax bill — as they try to weather red-hot inflation.
The IRS issued 105.7 million refunds last year, paying out an average of $3,167.
This tax season will include some new developments, including the IRS's efforts to launch its own “Live File” tax filing platform, which will be a free alternative to paid tax preparation platforms like Intuit's INTU,
TurboTax and H&R Block HRB,
The IRS Direct File platform will be available in 12 states to start, serving an estimated several hundred thousand taxpayers, the IRS said. But it's not expected to be widely available in those states until mid-March, the IRS said Monday.
The states are Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State, and Wyoming.
The IRS is gearing up for tax filing season as lawmakers debate how to avoid a partial government shutdown starting Jan. 19.
One bargaining chip in the negotiations is part of the IRS's multibillion-dollar funding for more audits of wealthy taxpayers and corporations. The $20 billion in question was part of $80 billion earmarked for IRS reform in the Inflation Reduction Act, passed in 2022.
“As our transformation efforts take hold, taxpayers will continue to see marked improvement in IRS operations in the upcoming filing season,” IRS Commissioner Danny Werfel said in a statement Monday.
“IRS staff is working hard to make sure the new funding is used to help taxpayers by making the tax preparation and filing process easier,” he said.
The IRS said one of the improvements the agency is making this year will provide more information to people tracking the status of their refund. There will be more details about the progress of the refund process and it will be explained in easy to understand language.
The quickest way people can get their refund is to file their tax returns electronically and arrange for direct deposit into a bank account.
Although an agreement to avoid a partial lockdown emerged on Sunday, observers stressed that there is still a way to go before the agreement is finalized and passed through Congress.
As of now, IRS funding continues through February 2nd.
A Treasury Department spokeswoman previously told MarketWatch that taxpayers will still be able to file their returns even if there is a break in funding.
What to know about the IRS Direct File tax filing program
Because the IRS Direct File program is in beta, the program will only be open to taxpayers with relatively simple returns this year. It can handle W-2 wage income, Social Security income, unemployment compensation, and interest income up to $1,500.
Direct File can process a few tax credits, including the Earned Income Tax Credit and the Child Tax Credit. The standard deduction may be applied but not itemized deductions.
IRS officials initially considered an invitation-only approach to finding Direct File users. An agency spokesman said they dropped the idea.
“We have adjusted our approach based on feedback from partner organizations and to provide additional time to thoroughly test Live File, enabling us to make our easy-to-use, secure and free tax filing service available to eligible taxpayers as soon as possible,” the spokesperson said.
The IRS expects “at least hundreds of thousands of taxpayers across the country will decide to participate in the pilot program,” the spokesperson noted.
The IRS Direct File program is ready for its first trial run, but there is already a separate IRS program that offers no fees to filers who meet certain requirements.
Known as the IRS Free File program, the IRS partners with some tax software providers that offer free tax preparation, but research shows that few people use the software. The Free File program will open to eligible taxpayers on January 12. Households need an adjusted gross income of $79,000 or less in 2023 in order to qualify for the program.
