Tax Preparation

Tax season is in full swing. With just about a month until the official tax filing deadline on April 15, if you don’t have a plan to file your taxes, you may want to consider the IRS’ latest digital initiative – Direct File. 

Over the last few weeks, the IRS has piloted Direct File, and it’s now available for eligible taxpayers to use – for free – in 12 states. 

“A team of experts from across the government built and tested the Direct File pilot to give taxpayers an easy, accurate, free way to file their taxes online directly with the IRS,” said IRS commissioner Danny Werfel.

“Our goal with the Direct File pilot is to help people meet their tax obligations as easily and quickly as possible. We developed Direct File from the beginning with taxpayers’ help, and we’ll continue to talk to taxpayers about their experience to learn more about what taxpayers want for future digital services.”

What to know about Direct File

The Direct File system is a step-by-step guide for taxpayers to accurately file their taxes online. There’s no rush to get through the entire return in one sitting – users can save their progress and return to it at any time. 

Direct File also has a chat feature, so taxpayers can talk directly with tax professionals if they have any questions throughout the process. 

“Many taxpayers we’ve heard from filed their taxes in less than 30 minutes using Direct File and praised it as an easy, no cost tax filing experience,” Werfel said. 

To be eligible to use Direct File, taxpayers must fall into these categories: 

• Report income earned from jobs that generate a W2

• Claim Earned Income Tax Credit, Child Tax Credit, and the Credit for Other Dependents

• Claim the standard deduction and deductions for educator expenses and student loan interest

• Lived in the same state for the entire calendar year of 2023

Additionally, Direct File is currently only available in 12 states, including: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State, and Wyoming. 

Direct File will guide taxpayers through their federal returns. Then, for states that have income tax, taxpayers will be led to a state-sponsored income tax tool. 

Direct File is available to access on computers, tablets, or smartphones, and taxpayers can file in English or Spanish. First-time users will have to verify their identity through ID.me, ensuring a safe and secure tax filing process. 

With just over two months until the official tax filing deadline – Monday, April 15, 2024 – it’s time for taxpayers to make a plan to file their 2023 tax returns. 

For many consumers, that process might just come at no cost. 

The IRS explained that eligible taxpayers can take advantage of several resources designed to eliminate the cost associated with filing taxes – regardless of whether they choose to file on their own or use a tax preparer. 

Free programs

Here’s a look at some of the ways taxpayers can file free this season, including the eligibility requirements: 

• IRS Free File: To utilize this program, taxpayers must have had an adjusted gross income of $79,000 or less in 2023. This resource is one that consumers use on their own – tax preparers have made their programs available online for free, and taxpayers can even use their phones or tablets to file their taxes at no cost. 

• IRS Direct File: This program is currently in its pilot phase, as it’s the IRS’ latest way to file taxes for free. With Direct File, taxpayers will follow a step-by-step guide to learn more about their taxes, and free support from the IRS is available weekdays from 7 a.m. to 10 p.m. Currently, the pilot is only available in a dozen states, and only consumers with simple tax returns are eligible. The IRS plans to expand this program based on the information learned from this tax season. More information on availability can be found here. 

• Volunteer Income Tax Assistance (VITA): This program is for taxpayers with disabilities, limited English-speaking taxpayers, and those who make under $60,000 per year. Typically, consumers can access this program at popular community centers, like malls, libraries, schools, and more. 

• Tax Counseling for the Elderly (TCE): Seniors who utilize this service will meet with tax preparers who specialize in filing for older taxpayers. They’re trained to answer questions about pensions, retirement, and other related areas. 

• MilTax: Military veterans are eligible for free tax filing through MilTax. Through the Department of Defense, vets can file their federal tax returns and up to three state returns at no cost. 

• Free Fillable Forms: This free program is for taxpayers who make an adjusted gross income of $79,000 or higher. However, there is no formal assistance – taxpayers are responsible for choosing and accurately filling out the appropriate forms. This program is also only available for federal tax returns – not state returns, and taxpayers can’t make any changes to their returns once they’re submitted and processed. 

Okay, there’s no time to waste. You’ve put off doing your taxes and asking for an extension. But don’t worry, the process for asking for an extension until Oct. 16 is simple and easy.

If you are going to mail your request for an extension, download IRS form 4868 here and print it out.

On the left-hand side enter your full name, address, Social Security number and your spouse’s Social Security number.

On the right side, on line four estimate your total tax liability for 2022. If you have one job and expect a refund, it’s simple. Enter the total federal tax withholdings from you’re W-2.

If you had a side hustle that produced income, add the amount of estimated tax you paid during the year to the amount entered on line four. Enter the same number you put on line four to line five.

On line six, enter $0, since you believe your withholdings and estimated payments will cover your tax liability. Enter $0 on line seven. Check the appropriate boxes on lines eight and nine and you’re ready to mail the form. You can find the correct address for mailing it on page four of form 4868.

If you think you’ll owe additional taxes

While the extension allows you to delay filing your taxes it doesn’t allow you to delay paying your taxes. If you think you will owe taxes you should send a check for the amount of the additional tax. If you overpay, you’ll get a refund.

Line four, the amount of what you expect your tax will be, will be bigger than line five, the amount you’ve already paid. Subtract line five from four and the difference, entered on line six, is what you will send the IRS, along with form 4868.

You can also file for an extension electronically by using Free File at IRS.gov.

While taxpayers have less than a week to file their 2022 taxes, the Internal Revenue Service (IRS) is now asking taxpayers to think about whether they’ve claimed their refunds from 2019. 

According to the IRS, there are roughly $1.5 billion in unclaimed tax refunds from 2019, and time is running out for taxpayers to claim theirs. The deadline to claim the refunds is July 17. 

On top of the potential return, the IRS recommends that taxpayers file their 2019 taxes because they may also be eligible for the Earned Income Tax Credit. In 2019, the max credit was over $6,500. 

“The 2019 tax returns came due during the pandemic, and many people may have overlooked or forgotten about these refunds,” said Danny Werfel, IRS commissioner. “We want taxpayers to claim these refunds, but time is running out. People face a July 17 deadline to file their returns. We recommend taxpayers start soon to make sure they don’t miss out.” 

How to file

Though 2019 was several years ago, taxpayers still have time to file their taxes and claim their refunds. The IRS recommends starting sooner rather than later to avoid missing out on the money. The agency estimates that the midpoint for unclaimed returns from 2019 will reach nearly $900. 

For starters, taxpayers should have all of their tax documents from 2019 on hand and ready to file. These forms are also available by request from banks, employers, and any other sources of income. For those who can’t track down missing W2s, 1099s, or other tax forms necessary to file, you can request a wage and income transcript through the IRS’ website. 

Once those items are secured, taxpayers can follow the same process that they normally would when filing their taxes. 

Why is so much money left unclaimed? 

The IRS explained that because of the COVID-19 pandemic, taxes weren’t exactly top of mind for most Americans. Typically, if taxes aren’t filed within three years, any unclaimed refunds go back to the U.S. government. However, the COVID-19 pandemic extended that three-year deadline, which is now coming up in July. 

“With the pandemic taking place when the 2019 taxes were originally due, people faced extremely unusual situations,” Werfel said. “People may have simply forgotten about tax refunds with the deadline that year postponed all the way into July. We frequently see students, part-time workers, and others with little income overlook filing a tax return and never realize they may be owed a refund. We encourage people to review their records and start gathering records now, so they don’t run the risk of missing the July deadline.” 

The IRS also explained that to be eligible for your 2019 tax refund, you must also file taxes for 2020 and 2021. 

The Internal Revenue Service (IRS) opened the tax filing season back in January, and now the April 18 deadline to file is quickly approaching. 

With just a few days left, it’s crunch time for taxpayers to get all their ducks in a row to make sure their taxes are filed – or take the right steps to file an extension. Below are some tips and resources from the IRS for taxpayers to prepare for the upcoming deadline. 

Preparing for filing

For taxpayers who have already filed their taxes, or those who are still gathering all of their documents, there are a number of resources to keep on hand throughout tax season and beyond. 

• Saturday hours at Taxpayer Assistance Centers: Earlier this tax season, the IRS announced that Taxpayer Assistance Centers would expand to offer services to taxpayers on Saturdays. These special Saturday hours are available to taxpayers free of charge and with no appointment required. There are two remaining Saturdays available for those who may still have questions about filing their taxes: April 8 and May 13 from 9:00 am to 4:00 pm. Taxpayers can come with any questions about their IRS accounts or current filing documents. 

• Interactive Tax Assistant: For those who may not want to go to a Tax Assistance Center, this virtual service allows taxpayers to ask their tax questions to experts virtually. This service can help with everything from finding deductions, determining your filing status, claiming dependents, and more. 

• IRS Free File: This software from the IRS allows taxpayers who qualify to file their federal taxes (and some state taxes) for free. The guided tax prep software takes taxpayers through the paces of filing their taxes, including finding deductions, exemptions, and credits. 

• Online IRS Account: Having an active online account with the IRS can be helpful for consumers to keep track of all of their pertinent tax information – from this year and years past. This will include past payments, full tax return transcripts, and adjusted gross income history. 

• Find a Tax Professional: For taxpayers who may not know where to turn to get their taxes filed by an expert, the IRS website has tools available to help them find a trusted, reliable source. 

• Where’s My Refund: If you’ve filed your 2022 taxes already this year, this tool can help you track down your refund. Taxpayers should give the IRS around 24 hours to process their returns before tracking information is available. 

Do you need to file an extension?

Though the tax filing deadline is quickly approaching, any taxpayer can file an extension with the IRS. The Free File tool also allows taxpayers to electronically fill out the extension request form for free, bumping the deadline to file to October 15. 

Taxpayers in certain states – California, New York, Mississippi, and Arkansas – have exemptions to file later due to storms and other natural disasters. To see which areas specifically qualify for these extensions, taxpayers can visit the Tax Relief in Disaster Situations page. 

It’s also important for taxpayers to know that an extension to file doesn’t equate to an extension to pay taxes. To avoid paying interest or penalty fees, taxpayers should ensure that all payments are made on time. 

To also request extensions for tax payments, the IRS recommends that taxpayers complete Form 4868 or select “extension” as their payment method when going to make an online payment. Taxpayers can also create payment plans with the IRS to make their tax payments in increments over time.