Biden Official Announces Tax Filing Change for 1.5 Million Americans
Story by Suzanne Blake
- July 30, 2024 • 3 min read
U.S. Secretary of the Treasury Janet Yellen testifies during a hearing before the House Committee on Financial Services at Rayburn House Office Building on July 9, 2024 on Capitol Hill in Washington, DC. Yellen announced a new tax filing option for 1.5 million Americans.
The Biden administration has announced a key change to the tax filing process for 1.5 million Americans.
For the first time, more than 1.5 million Pennsylvanians will be able to file directly for free online, Treasury Secretary Janet Yellen announced on social media platform X Tuesday.
The option will be available only to those with simple state and federal tax returns in January, but the tool might become available for those in other states and for different types of returns in the future.
"It should be easy to meet your tax obligations and claim the credits, deductions, and refunds for which you are eligible. Instead, @IRSNews has been underfunded, which means that taxpayers have not gotten the support they deserve," Yellen wrote on X.
"Thanks to the Biden-Harris Administration's Inflation Reduction Act, we're giving taxpayers better service in-person, over the phone, and online. We want it to be easy for taxpayers to get it right the first time and get their refunds as quickly as possible."
The direct file tool aims to save taxpayers time and money by allowing them a direct option for free taxes, instead of forcing taxpayers to pay for a third-party service. Those tax filing options often cost several hundreds of dollars, Yellen added.
The Internal Revenue Service originally tested out its direct file pilot program this year, and Yellen said the service successfully processed more than 5,000 returns daily. A total of 140,000 had used Direct File, which saved them $5.6 million collectively in federal filing fees.
The pilot launched the tool in 12 states: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
The response among users was also strong, as 90 percent of survey respondents said the service was "excellent or above average."
"This update is a major positive change for those in Pennsylvania filing simple tax returns," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "Now, state taxpayers will be able to file their returns online for free, marking a shift from past years. This process should make filing returns quicker, more efficient, and more cost-effective."
The pilot program was launched using money from the 2022 Inflation Reduction Act, which allocated $80 billion to the IRS.
Previously, the IRS Commissioner Daniel Werfel said the agency intended to "roll it out in increments that get larger and larger, consistent with how products like this are rolled out in the private sector."
According to the U.S. Treasury Department, Americans spend more than $11 billion on tax prep services each year. That's an average of $270 and 13 hours lost to the process before the Direct File tool was available.
"This is going to allow people ease of access to their government, showing them that there is no wrong door," Pennsylvania Governor Josh Shapiro said in a statement. "Saving them hundreds if not thousands of dollars on software or other services that maybe they really didn't need in the first place."
