Tech News

Review | Surprise! The federal government has created a website that doesn’t stink.

Government websites have a well-deserved reputation reputation to be terrible And drives us crazy.

So it was a pleasant surprise to try IRS Direct Filea new (and politically controversial) option for file a tax return online directly with the Internal Revenue Service. Direct File works like TurboTax, but it’s run by the government and allows you to file a federal tax return for free.

Most people are not eligible to file their taxes with Direct File. I thought I could, but got rejected halfway and used TurboTax instead.

Direct File wasn’t perfect. Still, I liked using the IRS website — and I definitely prefer it to TurboTax, which annoys me with constant problems for more money and my private data.

You might feel differently about this. I’m going to tell you about my experience with Direct File and why it’s important even if you don’t use the site.

We deserve effective online government services. Direct File is visible proof that government websites don’t have to stink.

How to File Your Taxes with IRS Direct File (If You Can)

The first thing to know about Direct File is that it is a trial project. And you probably can’t use it.

You can only file your tax return on the new IRS site if you live in one of 12 states, including Texas, New York and California; work for an employer rather than for yourself; and meet many other eligibility requirements. (Learn more here.)

Just going through the seven online screens of Direct File’s eligibility checklists and doing an online identity check almost made me quit.

But once I started filing my taxes, Direct File looked pleasantly similar to TurboTax, which I’ve used for years.

Direct File walks you through yes or no questions about your income and potential tax breaks. You can also chat online for help.

There are far fewer questions than in TurboTax, because Direct File only allows its use by people with simple tax returns.

There were things I didn’t like. Unlike TurboTax, which had a digital copy of my W-2 tax form and allowed me to pull digital records from my investment accounts, I had to enter Direct File details like my income and interest payments.

This took longer and left me with the possibility of entering the numbers incorrectly.

The biggest problem was that halfway through, Direct File told me that I couldn’t actually file my federal tax return on the site. Ugh.

I missed a detail in the eligibility checklist that you can’t use Direct File if you had more than $1,500 in interest income last year. I did it. I was also rejected because I contributed to a health savings account, a fund through my employer to help pay for medical expenses.

I went through the whole Direct File process anyway to see how it went. And again, I was pleasantly surprised that the website was easy to use, with clear questions and helpful explanations. And did I mention it’s free? (If you can use it.)

A warning: do not confuse Direct File with existing IRS options to complete your tax return online.

You can also create an account with the IRS Forms to fill out for free website. Unlike Direct File or TurboTax, you have to go through the tax form line by line yourself. (Learn more here about free or low-cost tax filing options.)

A colleague, Monica Rodman, found using free fillable forms confusing. Monica was so unsure of the results that they double-checked the work with TurboTax. The whole process took 12 hours!

Monica gave up and had a good experience using Free tax to USA – which charged nothing to file a federal return and $15 for a state return.

The Free File Alliance, which runs fillable forms and a program called Free IRS file, said about 463,000 households filed returns using fillable forms last year. NPR recently reported that more than 50,000 people have already tried Direct File. Tens of millions of Americans file their taxes with TurboTax every year.

The problem that IRS Direct File is trying to solve

Criticism of Direct File in Congress and industry say the government is spending a lot by replicating existing services like those from Intuit’s TurboTax, H&R Block and smaller tax preparers.

I can’t answer whether Direct File should exist or not. I can say as a technology writer and longtime TurboTax user that business tax software drives me crazy.

I like using TurboTax. But I hate that it pushes me over and over again to pay more for extra features I don’t want. TurboTax also repeatedly tried to get me to use Credit Karma, a personal finance site also owned by Intuit.

And TurboTax asks for permission to use private information like your income and debts to make more money by offering you financial services. (Here’s how to say no to that.)

Direct File didn’t work for me, but I liked that there were no nasty issues like TurboTax.

Intuit did not respond to my questions.

I know not everyone will trust a government tax website. But I like the choice between filing my tax return for free directly with the IRS or using a paid commercial website.

Hillary Hartley, CEO of American digital responsea non-profit organization that helps governments create technology services, said citizens and government agencies benefit from competent public websites like Direct File.

We expect the technology in our lives to work. “When government succeeds in delivering on that same promise, it then pays dividends by restoring trust in our institutions,” Hartley said.

Julie Zauzmer Weil contributed to this report.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button