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IRS rolls out free Direct File option to Arizona taxpayers

An Internal Revenue Service 1040 tax form and instructions from 2023.
Peter Morgan
An Internal Revenue Service 1040 tax form and instructions from 2023.

A free electronic system for filing returns directly to the IRS is now available for Arizona taxpayers.

The new system, called Direct File, is a free online tool. Taxpayers in the selected states who have very simple W-2s and claim a standard deduction may be eligible to use it this tax season to file their federal income taxes. The program will also offer a Spanish version Tuesday afternoon.

The Treasury Department estimates that one-third of all federal income tax returns filed could be prepared using Direct File and that 19 million taxpayers may be eligible to use the tool this tax season.

"Direct File will offer millions of Americans a free and simple way to file their taxes, with no expensive and unnecessary filing fees and no upselling, putting hundreds of dollars back in the pocket of working families each year, consistent with President Biden's pledge to lower costs," said National Economic Advisor Lael Brainard.

Arizona is one of 12 states involved in the pilot. Others include Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Massachusetts, California and New York.

Direct File can only be used to file federal income taxes, taxpayers from states that require filing state taxes will need to do so separately.

The Direct File pilot is part of the agency's effort to build out a new government service that could replace some taxpayers' use of commercial tax preparation software, such as TurboTax. It's meant to be simple and provides a step-by-step walkthrough of easy-to-answer questions.