New IRS program allows free tax filing online for Wisconsinites

By The Badger Project

Americans spend billions every year paying a service or a person to help file their taxes. A new IRS program, coming in 2025, will allow you to file online for free.

After cutting IRS funding for many years, Congress recently gave the tax collecting agency a restoration of $60 billion to do things like increase enforcement on the wealthiest people and corporations and provide better customer service.

It also paid for a new, online filing program, called Direct File. A trial in 2024 allowed taxpayers in 12 states to file their taxes online for free.

It is the latest step the agency has taken to try and simplify the often-daunting task of filing tax returns.

Reports indicate that the pilot program was enormously successful, said Ross Milton, a public affairs assistant professor at UW-Madison who researches tax policy. The IRS plans to offer Direct File to all taxpayers starting in 2025.

“I think that’s pretty exciting based on how much money Americans spend on preparing taxes,” Milton said.

That would be billions of dollars, according to a report from the investigative journalism organization Pro Publica.

But powerful entities oppose those efforts. That simplified, electronic filing is a direct threat to companies which many Americans use to help file their tax returns.

And that tax filing industry is fighting to keep its customer base intact.

In 2023, Intuit, the company that owns TurboTax, spent more than $3.8 million lobbying Congress as it made plans for the Direct File system, according to the political spending watchdog Open Secrets.

The tax prep industry has spent more than $93 million lobbying Congress since the 2003 launch of the separate, Free File Program, which gives lower-income taxpayers free access to tax prep software.

This article first appeared on The Badger Project and is republished here under a Creative Commons license.