12 states qualify for the IRS Direct File pilot program: Is yours one of them?

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The IRS is rolling out sweeping new changes to the tax filing system by starting the slow launch of its Direct File program. The program intends to help tax filers bypass costly tax preparation software like TurboTax and H&R Block and file directly with the IRS.

The program is set to roll out in stages. Just 12 states will be eligible to use the Direct File program this year. In its initial phase, only government employees will have access to Direct File. Over the next few months, other filers will gain access.

“We’re starting small as the filing season begins,” IRS commissioner Danny Werfel said. “The pilot is undergoing continuous testing with taxpayers so we can identify and resolve issues as we move beyond the start of filing season and into February and March timeframes.”

The 12 states include a handful without income tax: Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. A few additional states that do have income tax will be part of the program, including Arizona, Massachusetts, California and New York.

“Direct File is one step toward getting the IRS in line with 21st century tax administration,” Nina Olson, Executive Director of the Center for Taxpayer Rights explained.

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The program aims to specifically help low- and middle-income households but will be rolled out to all taxpayers eventually.

If you’re relying on your tax refund to help pay down high-interest debt, consider a low-interest personal loan instead. Use an online marketplace like Credible to make sure you’re getting the best rate and lender for your needs.

TAX SEASON HAS OFFICIALLY STARTED: HERE’S EVERYTHING YOU NEED TO KNOW BEFORE FILING

The House recently passed a tax bill that would temporarily expand the child tax credit. The $33 billion expansion to the credit would help more low-income families qualify for the credit and will potentially provide a larger credit.

The bill now moves onto the Senate, but it is a bipartisan bill that the Senate has largely supported.

“Chairman Smith deserves great credit for bringing this bipartisan bill through committee with a strong vote of confidence, and for marking up related bills under regular order earlier in this Congress, House Speaker Mike Johnson, R-LA, said in a statement. “This bottom-up process is a good example of how Congress is supposed to make law.”

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The IRS is also adjusting the standard deduction this year to account for inflation. The standard deduction for single taxpayers and married taxpayers filing separately has risen to $14,600 from $13,850.

For married couples filing jointly, this deduction is $29,200, up from $27,700. For heads of households, the deduction is $21,900 this year, up from $20,800.

Credible can show you several personal loan lenders that offer quick loans. Head to Credible to compare rates and lenders and find a timeline that works for you.

NUMBER OF ELECTRIC VEHICLES THAT QUALIFY FOR NEW ELECTRIC VEHICLE TAX CREDIT DROPS TO 13

Tax season brings more than just refunds. Scams are constantly popping up, with the latest being individuals posing as IRS agents.

The FTC is currently warning tax filers of fake emails, social media messages and text messages. Scammers often send messages telling you to check your tax refund status through a specific link or form. If you click these links or submit these forms, they might steal your identity or install malware on your device.

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“I do believe with the growing use of technology and social media, some people are falling for these scams because they believe that many organizations like the IRS are communicating via nontraditional ways,” Kemberley Washington, a New Orleans-based certified public accountant and former IRS agent, said.

The IRS will never contact you through text, social media or email. As for your tax refund, you can only view the status through the “Where’s My Refund” tools on the IRS’s website.

Get a jump start on your personal loan shopping today. Credible can help you view multiple lenders, rates, and terms in one spot.

IRS WAIVING $1 BILLION IN PENALTY TAXES, WILL KICK OFF 2024 TAX SEASON ON JAN. 29

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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