When do tax returns start being accepted by the IRS? Here's what you need to know about filing dates and the new free filing option from the IRS.

Tax season is officially underway! If you're preparing to file, you might be asking, "When does the IRS accept tax returns?" Starting January 29, the IRS began processing returns, so you can file right now. Just remember the filing deadline—April 15 for most, unless you're in Maine or Massachusetts, where it's April 17.

IRS Tax Return Acceptance for 2024 Is Underway

You've probably heard about a new initiative called “Direct File.” This pilot program lets eligible taxpayers file their 2023 federal tax returns online for free, directly with the IRS. Below is a rundown of what you need to know about Direct File, including eligibility and availability.

Understanding the New Free Filing Option from the IRS

With your tax documents in hand and knowing that the IRS is accepting returns as of January 29, you might be eager to find an affordable and straightforward way to file.

This year, some taxpayers can take advantage of Direct File, a no-cost online tax preparation pilot program from the IRS. It resembles popular services like TurboTax and H&R Block. This initiative stems from the Inflation Reduction Act of 2022, which mandated the IRS to create a free filing option that allows taxpayers to submit their returns electronically.

The IRS is rolling out Direct File in phases. For the current year, it's only available to individuals residing in these states:

  • Arizona
  • California
  • Florida
  • Massachusetts
  • Nevada
  • New Hampshire
  • New York
  • South Dakota
  • Tennessee
  • Texas
  • Washington state
  • Wyoming

Wondering when Direct File opens? It varies. The pilot has limited capacity, so even if you're in one of the listed states, you might need to wait. If you've received an invitation from the IRS, you're all set to go. If not, you can sign up for updates on the Direct File website to be notified when it becomes available for new participants.

Is Direct File Right for You?

The IRS states that Direct File caters to individuals with straightforward tax situations. If your taxes are more complicated, this option may not work for you. Certain individuals, including:

Eligibility also requires living in a participating state. For further eligibility details, click here.

What to Do If You're Eligible

If you qualify for Direct File, you can submit your 2023 federal tax return at no charge, available in both English and Spanish, on any device. The pilot includes step-by-step instructions for entering your tax data, along with access to real-time online support from IRS representatives if you need help.

Direct File returns will be processed like all electronically filed returns, so using this method won't speed up the process.

Requirements for Using Direct File

If you wish to join the Direct File pilot, you'll need:

  • A Social Security number or Individual Taxpayer Identification Number for you and any claimed dependents
  • An Adoption Taxpayer Identification Number if applicable for your dependents
  • Your current driver’s license, state ID, passport, or passport card

You'll also need to verify your identity and securely log in through an ID.me account. To create this account, confirm your identity with a state or federal ID (like your driver’s license or passport) and take a video of your face. These videos are used solely for matching your ID and are not stored. If you'd prefer not to take a video, a video call with an ID.me representative is available to confirm your identity.

Cost Savings with Direct File

Tax preparation can be both tedious and costly. In 2023, the average cost to file an individual return was $248, according to the National Association of Tax Professionals. The IRS estimates that basic tax filing takes around 9 hours.

One of the main benefits of Direct File is its cost—it's free. However, how much time it saves varies. “The new system is free and lets taxpayers file directly with the IRS,” notes Karla Dennis from Karla Dennis And Associates. “It should pull information from taxpayers’ IRS accounts and guide them through their taxes. However, its effectiveness might depend on individual circumstances.”

Could Direct File Revolutionize Tax Preparation?

The IRS aims to ensure that Direct File is user-friendly and to resolve any issues before potentially expanding the program. IRS Commissioner Danny Werfel recently stated, “If Direct File progresses past the pilot, it would provide another option for taxpayers alongside existing services like tax professionals or tax software.”

If Direct File becomes widely available, what happens to other electronic filing services? Tania Mercado from Intuit, which owns TurboTax, is critical of the initiative. “Direct File isn’t really free tax prep; it’s a way to use taxpayer dollars for something that’s already available at no cost,” she argues.

Mercado warns that filing directly with the IRS could lead to missed opportunities for maximizing refunds. “Doing your taxes without an advocate may result in overpaying the IRS and state revenue departments,” she adds.

Final Thoughts

Whether Direct File will succeed remains to be seen. In the meantime, it's crucial to file as soon as possible since the IRS is already accepting returns. You have various options available for filing, with some being free. Determine what works best for your tax situation.