The IRS is making tax season less stressful for millions of Americans by expanding its free tax filing options for 2025. If you’re earning $84,000 or less, you could qualify for free online tax preparation. Here’s what you need to know to get started.
The IRS Free File program has upped its income eligibility, now covering individuals and families with an Adjusted Gross Income (AGI) of up to $84,000. This means more Americans can benefit from the free, guided tax preparation services offered through IRS-approved providers.
How Does Free File Work?
The Free File program partners with eight private-sector tax software companies to provide simple, step-by-step guidance for filing your federal return. Some partners even offer free state tax filing. The software walks you through common income sources, credits, and deductions so you don’t miss anything. And good news for Spanish speakers: At least one partner offers their services entirely in Spanish.
To access Free File, head to the IRS website and choose from the available providers. Remember, you must start from the official IRS site to get the free option.
Direct File Expands to More States
For those living in specific states, the IRS is offering another option: Direct File. Starting January 27, 2025, taxpayers in 25 states can file their federal taxes directly through the IRS without using a third-party service. This option is free and available to those who lived and worked in one of the eligible states during the 2024 tax year.
Newly added states include California, Florida, Illinois, New York, and Texas, bringing the total to 25 participating states. However, keep in mind that Direct File covers federal returns only—you’ll be directed to free state tax options after completing your federal filing.
What Income and Deductions Are Covered?
Direct File supports many income sources, deductions, and credits, including:
- Wages (W-2), retirement income, Social Security benefits, unemployment benefits, and more.
- Credits like the Earned Income Tax Credit (EITC) and Child Tax Credit.
- Deductions such as student loan interest and contributions to Health Savings Accounts.
Even if you don’t qualify for guided tax preparation, the IRS still offers Free File Fillable Forms for those with an AGI above $84,000. These forms allow you to complete and file your taxes electronically, though they provide minimal guidance.
What Should You Do Next?
Start by gathering all your tax documents, including W-2s, 1099s, and information on any credits you plan to claim. Visit the IRS Free File or Direct File page on the IRS website to find out which option works best for you. Make sure you file early to avoid last-minute stress!
With these expanded free filing options, the IRS hopes to help millions of Americans avoid the hassle and expense of tax preparation services.
