For many years, the Internal Revenue Service (IRS) has offered something called Direct File, which was created so that people could file their federal taxes easily, without needing paid tax software. But at the beginning of November, the IRS shut it down.
This change affects around 300,000 people across 25 states who used the platform in the 2024 tax year—and has left many wondering what went wrong and what to do next. So, let’s learn more about this situation, shall we?
Why Direct File existed
Direct File started during Biden’s administration as an attempt from the IRS to offer its free platform to file federal taxes. The idea was that people could:
- Answer guided questions
- Enter W-2 information
- Submit their federal tax return at no cost
This tool worked along with Free File, another IRS program that works with private tax software companies to offer free filing to people earning $84,000 or less. So, for two tax seasons, eligible taxpayers in 25 states had two different ways to file their federal taxes for free.
Removal of the Direct File
Even though Direct File seemed like a great idea, the IRS decided to remove it because, according to a report from the Treasury Department sent to Congress on November 5, the platform was very expensive and not very much used.
Basically, Direct File started as a controlled testing project costing $24.6 million, much lower than expected. But later, the IRS discovered additional costs that hadn’t been included, such as: legal support, technical support, and communications. Once all costs were added, each tax return ended up costing the IRS $225 to process. Originally, the IRS estimated the cost to be $10 to $15.50 per return.
What’s more, the government expected between 5 and 25 million taxpayers to use Direct File, but only about 140,803 people used it.
What happens now?
The Trump administration announced the money and resources used in Direct File will be shifted to other already existing free programs, especially:
- The IRS Free File program
- Partnerships with private tax software companies
- Improvements to free filing options
Free ways to file your taxes
Even without Direct File, several free options still exist to help you file federal—and sometimes state—tax returns. So, let’s have a look at them:
- IRS Free File (for incomes of $84,000 or less): This is the IRS’s main free filing program. It works with well-known software companies to offer free tax preparation.
- IRS Free File Fillable Forms: This is the digital version of paper tax forms. You fill them out online and submit them electronically. However, this option does not include: step-by-step guidance, error checks, automatic calculations.
- Volunteer Income Tax Assistance (VITA): VITA provides free, in-person tax help for: people earning $67,000 or less, people with disabilities, and individuals with limited English skills. IRS-trained volunteers prepare both federal and state returns. Some locations also offer self-prep options with a volunteer ready to assist if needed. To find a VITA location, you can visit irs.treasury.gov or call 800-906-9887.
To have a clear idea of all the free ways to file your taxes, here’s a pros and cons chart for you:
| Option | Pros | Cons |
| IRS Free File | Free for federal taxes, handles many tax situations, uses trusted companies | Some providers don’t include free state taxes, eligibility rules vary |
| Free Fillable Forms (IRS) | No income limit, can handle many tax situations | No guidance, no error checking, easy to make mistakes, takes longer |
| VITA (Volunteer Help) | Real human assistance, free for eligible people | Limited availability, appointments required, not always nearby |
So…
The end of Direct File might feel disappointing if you liked having a free, government-run way to file your taxes. The good news is that you still have several reliable—and free—ways to file your taxes, including Free File, Fillable Forms, and the VITA program.