IRS Expands Tax Program to Benefit Nevada Taxpayers

The Internal Revenue Service (IRS) is expanding its Direct File program, allowing more Nevada taxpayers to file taxes directly with the agency for free.

The program, which enables individuals to calculate and submit their tax returns without relying on commercial tax preparation software, will be available during the 2025 filing season. Initially launched as a pilot in 2024, the Direct File program was accessible to select taxpayers in Nevada.

The pilot program allowed taxpayers with straightforward W-2 income to calculate and file their returns directly. The new eligibility standards also authorize 1099 and various tax credits, such as the Child and Dependent Care Credit and the Retirement Savings Contributions Credit, to utilize the system.

While the expansion of the Direct File program is a positive development for many taxpayers, it has faced criticism from commercial tax preparation firms that profit from providing these services. Furthermore, a recent IRS inspector general report revealed that the agency has not adequately protected taxpayer data within its Free File Alliance, a separate initiative that offers free tax preparation services to low- and middle-income individuals.

Under the Inflation Reduction Act, the IRS explored the feasibility of a Direct File system as part of the funding, which President Joe Biden signed into law in 2022. The agency received $15 million in taxpayer funding and a nine-month timeline to report on how the program would function, paving the way for the expansion in 2025.