How to Use IRS Free File or Direct File
Tax season. It’s the two words that send shivers down most people’s spines. But what if I told you that you could completely eliminate one of the most frustrating parts of the process paying for the software?
IRS Free File and the more recent IRS Direct File (pilot program) are the two primary ways that the IRS provides free electronic filing. Although the names sound similar, they have very different goals, qualifications, and administrators. Knowing which one applies to you could save you cash and time.
1. IRS Free File: The Partnership Powerhouse
The IRS Free File Program is a public-private partnership between the IRS and several leading commercial tax software companies (like TaxSlayer, TaxAct, etc.). Think of it as the IRS securing a special, limited-time “free pass” for you to use premium software.
Who Qualifies?
This program is primarily income-based. For the 2024 filing season (for 2023 tax returns), the Adjusted Gross Income (AGI) limit was $79,000 or less for any filing status.
If you meet the AGI limit, you’ll be able to choose from a selection of guided tax preparation software. The key benefit is that these programs walk you through your return step-by-step, making them great for most people. Some even offer free state tax filing as part of the deal.
How to Use Free File: Don’t Get Fooled!
This is the most crucial step: You must start at the official IRS.gov website.
If you go directly to a partner company’s commercial site, you’ll likely be routed to their paid product. The IRS website contains a “Find Your Trusted Partner” lookup tool that helps you choose the correct software provider based on your specific qualifications (income, age, state residency). Once you click the link from the IRS site, you’ll be taken to a special version of the company’s software that is entirely free for federal filing.
2. IRS Direct File: The IRS-Run Option
IRS Direct File is the tax agency’s new, government-built, and government-run electronic filing service. It’s an alternative for taxpayers to file their federal return directly with the IRS itself, not through a third-party company.
Who Qualifies?
Direct File is currently a pilot program with strict limitations that vary by tax year. Eligibility is restricted based on two main criteria:
- State Residency: It’s only available to taxpayers in a limited number of participating states (which often change year-to-year).
- Tax Complexity: It is strictly for taxpayers with simple returns. This usually means W-2 income, Social Security, unemployment compensation, and certain credits like the Earned Income Tax Credit (EITC) and Child Tax Credit. If you have complex investments, business/gig economy income (Form 1099-NEC), or itemize your deductions, Direct File is likely not for you.
How to Use Direct File
If you live in a pilot state, you must visit the official IRS Direct File website. The system will first check your eligibility based on your tax situation. If you qualify, you will sign in securely (often requiring an ID.me account to verify identity) and then use the guided platform to enter your information and file your return directly with the IRS.
The Key Difference: Public vs. Private
| Feature | IRS Free File | IRS Direct File |
| Who Runs It? | IRS partners with private commercial tax software companies. | The IRS itself. |
| Eligibility | Primarily based on a specific AGI limit (e.g., $79,000 or less). | Restricted by state residency and tax complexity (simple returns only). |
| Interface | Guided software provided by major brand-name companies. | Guided software built and maintained by the IRS. |
| Access | Must start on the IRS.gov Free File landing page. | Start on the official IRS Direct File website. |
Before you spend a single dollar on tax preparation this year, check the IRS website. You might find that the best way to save money on your taxes is to simply stop paying to file them.