Americans can start filing their income-tax returns with the Internal Revenue Service on Monday, Jan. 29, the federal tax collector announced Monday.
Monday, April 15, is the deadline to pay any taxes owed, and it’s also the deadline to either file a return or get an extension until Oct. 15. Taxpayers in Maine and Massachusetts have an April 17 deadline due to the observance of Patriot’s Day and Emancipation Day in those states.
By April 15, the IRS expects to have received 128.7 million income-tax returns.
This year will be another closely-watched tax-filing season.
Millions of Americans are seeking their largest possible tax refund — or their smallest possible tax bill — as they try to move past red-hot inflation.
The IRS issued 105.7 million refunds last year, paying an average of $3,167.
This tax season will include some new developments, including the IRS’s effort to launch its own “direct file” tax-filing platform, which would be a free alternative to paid tax-prep platforms such as Intuit’s
TurboTax and H&R Block
The pilot version of the IRS Direct File platform will be available in 12 states to start, and will serve 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 preparing for tax-filing season as lawmakers wrangle over how to avoid a partial government shutdown beginning Jan. 19.
One bargaining chip in the negotiations is a multibillion-dollar chunk of IRS funding for more audits of rich taxpayers and corporations. The $20 billion in question was part of $80 billion destined for an IRS overhaul in the Inflation Reduction Act, which 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 employees are working hard to make sure that new funding is used to help taxpayers by making the process of preparing and filing taxes easier,” he said.
One improvement the agency is making this year will give more information to people tracking their refund’s status, the IRS said. There will be more details about a refund’s progress and it will be explained in easy-to-understand language.
The fastest way people can get their refund is by filing their tax return electronically and arranging for direct deposit into a bank account.
Even though a deal to avert the partial shutdown emerged Sunday, observers emphasized there’s still a ways to go before the agreement is finalized and passed through Congress.
As of now, IRS funding runs through Feb. 2.
A Treasury Department spokeswoman previously told MarketWatch taxpayers will still be able to file their returns even if there is a lapse in funding.
What to know about the IRS Direct File tax-filing program
Because the IRS Direct File program is in a pilot phase, 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 handful of tax credits, including the earned income tax credit and the child tax credit. It can apply the standard deduction but not itemized deductions.
IRS officials initially considered an invitation-only approach to find Direct File users. They dropped the idea, an agency spokesperson said.
“We have adjusted our approach based on feedback from partner organizations and to provide additional time to rigorously test Direct File, enabling us to make an easy to use, secure, and free tax filing service available to eligible taxpayers as soon as possible,” the spokesperson said.
The IRS is expecting “at least several hundred thousand taxpayers across the country will decide to participate in the pilot,” the spokesperson noted.
The IRS Direct File program is up for its first test run, but there is already a separate IRS program that offer no charge to filers who meet certain requirements.
Known as the IRS Free File program, it’s an IRS partnership with certain tax software providers that provides free tax prep, but research shows few people use the program. The Free File program opens to eligible taxpayers on Jan. 12. Households need adjusted gross income of $79,000 or less in 2023 in order to qualify for the program.