In nearly every case, a tax return contains a bunch of things the IRS already knows: how much interest your bank paid you, how much your employer paid you, how many kids you have, etc etc. Nearly everyone who pays a tax-prep place or website to file their tax return is just sending data to the IRS that the IRS already has. This is insanely wasteful.
In most other “advanced” countries (and in plenty of poorer countries, too), the tax authority fills in your tax return for you and mails it to you at tax-time. If it looks good to you, you just sign the bottom and send it back.
In the US, we have a duopoly of two gigantic tax-prep outfits: H&R Block, and Intuit, owners of Turbotax. These companies make billions from low-income, working Americans every year, charging them to format a bunch of information the IRS already has, and then sending it to the IRS on their behalf. These companies lobbied like crazy for the right to tax you when you pay your taxes.
After outstanding work by Propublica, lawmakers and the IRS were finally pressured to create an IRS-based free filing service that would cut Intuit out of the loop….
By May, 2023 the IRS had announced its own, in-house free file program….
Now, no one is forcing you to use this program. Do you have a family accountant that your grandparents started using in the Eisenhower administration? Just keep going to them. Do you like using Turbotax? Keep using it!
Better use it quick, though. Elon Musk has just announced that he’s killing it. Yeah, I know, no one elected him. That doesn’t seem to matter to anyone, least of all Democrats on the Hill, who are still showing up for work every day and trying to engender a “spirit of comity” rather than screaming and throwing eggs…
Musk called IRS free file [Direct File] a “far left” program and announced that he had “deleted it.” By the way, the median Trump voter’s income is about $72k, meaning more than half of Trump voters qualified for free file.
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