Friday, April 5, 2024 | 2 a.m.
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Tax Day is right around the corner. That means some folks who haven’t yet filed yet are still weighing options to help them minimize the stress of navigating a complicated tax system. Many people will end up paying a company to help them file, like purchasing software to file online.
Americans annually pay an average of $150 to help them file their taxes while investing nine hours of their lives. This increases the frustration some feel about doing their civic duty to pay taxes, which contribute to the shared resources of our communities, like providing clean drinking water, repairing roads and educating children.
Luckily, this year eligible people in Nevada have a new, zero-cost option — a tool called Direct File — that will allow them to file their taxes online directly to the government using a question-based software from the IRS.
This first-of-its-kind free online tax filing software was made available March 12 to people with simple tax situations living in Nevada, Arizona, California, Florida, Massachusetts, New Hampshire, New York, Texas, Tennessee, South Dakota, Washington and Wyoming. You can check whether you’re eligible by going to directfile.irs.gov.
Return-free filing, where taxpayers’ returns are handled by the government, was embraced by President Ronald Reagan in the 1980s. Decades later, the first step toward that goal was made possible through the Inflation Reduction Act. And there are many reasons residents of the Silver State should cheer this new product from the IRS.
Not only is this software free, but the sensitive financial information filed with people’s taxes goes straight to the government, not through a corporate middleman. Tax prep companies shared private tax information with Meta (which owns Facebook) and Google. Filers still will have the option of a private tax preparer, but this is a great new choice for Nevadans.
The Direct File tool also was designed to be accessible. It’s mobile-friendly and has both English and Spanish versions. It’s meant to make it easy for people to claim credits like the Earned Income Tax Credit, which nearly 31% of eligible recipients in Nevada don’t currently claim. Eligible people in the state could collectively save $77 million this year by using Direct File, even though the scope of the pilot is intentionally narrow.
Unsurprisingly, Direct File is overwhelmingly popular. In key states polled, 90-95% of respondents were supportive. It has been cheered by 99 members of Congress, 134 leading experts on the U.S. tax system and 200 national, state and local organizations, including Indivisible Northern Nevada. A coalition of 16 attorneys general, including Nevada’s Aaron Ford, wrote a letter to Treasury Secretary Janet Yellen in support of Direct File.
U.S. Rep. Dina Titus, D-Nev., has been an enthusiastic supporter of online filing software from the IRS. She cosponsored the Tax Filing Simplification Act in the last Congress, signed a letter from the House to the Treasury Department calling for online tax filing, and has advocated for it onsocial media. In addition, Rep. Susie Lee, D-Nev., is helpfully spreading the word about Direct File on her website and on social media, as is Rep. Steven Horsford, D-Nev.
This program is a great investment. The IRS estimates a price tag of between $64 million and $249 million a year, depending on the ultimate scope of the program. Even at the higher end, that means the program costs only $10 for each return filed. That’s a great use of our tax dollars and is $140 less than the average person spends on paid tax prep.
For the Direct File pilot to succeed, it’s essential that taxpayers take advantage of the tool. The pilot program is the building block toward national free filing using IRS Direct File, and eventually a version of it that is pre-populated with information like wage data. Taxpayers in our peer nations enjoy simply checking over a document prepared by their government. The Direct File pilot is step in the right direction and proof we shouldn’t have to shell out our hard-earned money to a corporate middleman that we don’t actually need.
Eligible filers in Nevada now have a free choice in Direct File. From the W-2 wage earners that keep the Strip’s lights on and rooms clean to the rangers at the Sheldon National Wildlife Refuge and everywhere in between, and I hope they use it.
Susan Harley is the managing director of Public Citizen’s Congress Watch division.
